Understanding electricity and gas plans

The cost of electricity and gas will be different for everyone; it’s typically based on your home’s energy use, the number of people living there, when you use that power and what tariffs you pay for the electricity and gas you consume.

However, a survey conducted by Compare the Market found that the average electricity bill among respondents was $411.80 per quarter in 2021.* Assuming every quarter cost the same, that would represent a yearly electricity bill of $1,647.20.

The average electricity costs for some states are listed below.

There are several ways you may be able to pay your energy bills, depending on what options your retailer has available. These could include:

• Direct debit
• BPAY
• Online via credit card
• Centrepay
• Cheque or money order
• Account transfer
• In-person at a post office.

Not all energy retailers will have every option available, so it’s worth checking with your retailer or your contract’s basic plan information for the available payment methods. Your energy bills will also include details on how to pay.

There are a variety of concessions and rebates for energy costs that you may be eligible for, depending on your personal circumstances.

Energy concessions across Australia’s states and territories are available to the following types of eligible customers:

• Pensioner Concession Cardholders
• Health Care Cardholders
• Veteran’s Affairs Gold Cardholders
• Commonwealth Senior’s Cardholders
• Some Centrelink payment recipients.

These concessions will differ between states and territories. Learn more about energy concessions across Australia.

Your energy distributor is responsible for maintaining the poles, wires and pipes that connect your home with energy sources. There are multiple distributors in each state and territory, operating across different areas. You can find out who your distributor is by going to your energy retailer’s website and using your postcode or by looking on your bill under the ‘faults and emergencies’ section.

A smart meter is a digital energy meter that measures and displays how much electricity your home is using. Your retailer can remotely access the smart meter to read it, so they don’t need to send anyone to your premises.

One of the biggest benefits of smart meters is that they provide more detailed information about your energy usage so you can take advantage of controlled load tariffs and time-of-use tariffs.

Depending on the connection and type of meter you have at your home, and the contracts available for your address, you may be able to take advantage of some of the following tariffs:

• Controlled load tariffs: A controlled load tariff is one that applies to a specific appliance kept on an individual circuit, separate from the other appliances in your home. It’s commonly used for things that consume lots of power, such as slab heating or pool pumps. This can help you save on your electricity bills – especially if you’re able to use a controlled load during off-peak times.
• Time-of-use tariffs: Time-of-use tariffs are where you will be charged a different rate depending on the time of day or week. The day is broken up into peak and off-peak periods. A peak period is when most people are home and using electricity – typically in the afternoon and evening after work/school. Off-peak refers to periods of the day where fewer people are using electricity and generally applies to late nights, in the morning or on weekends.
• Seasonal tariffs: Seasonal tariffs are more common to gas plans but some electricity plans could charge different tariffs depending on the season. Seasonal tariffs charges a different rate depending on whether it’s used in summer or winter – and in some cases autumn and spring. For example, winter seasonal gas tariffs are generally more expensive as there’s a greater demand for gas heating. Seasonal tariffs are less common in warm states like QLD and more prevalent in the southern regions of Australia, like SA, VIC and parts of NSW, where they experience much colder winters.
• Block tariffs: A block tariff charges a different rate for certain amounts of electricity and gas, which are broken up into ‘blocks’. For example, the first 10kWhs of electricity or 25MJ of gas you use in a day is a ‘block’ that’s charged at 27 cents per kWh or 4 cents per MJ. The next block will generally be charged at a higher rate, so the more energy you use the more expensive each unit will be. However, there are instances were blocks decrease in price the more you use. Block tariffs help encourage households to use less electricity or gas each day to avoid incurring a more expensive tariff. It’s important to keep in mind that some electricity and gas plans may have multiple blocks per day, each one at a different size and charged a different rate.

The Default Market Offer (DMO) is a set price for electricity enforced by the Australian Energy Regulator (AER). It essentially provides a maximum annual price that retailers may charge for Default (also referred to as ‘Standing’) plans and applies to NSW, ACT, SA and parts of south-east QLD.

It also provides a baseline price that all retailers must compare against when advertising the price of their market plans (e.g. 25% off the DMO for your area), so it’s easier to compare which electricity plan has the biggest discount.

VIC has a similar price cap known as the Victorian Default Offer (VDO), which you can learn about here.

There are two categories of solar power: thermal solar or photovoltaic (PV) solar. Thermal solar works by using the light of the sun to heat a liquid and power a turbine via steam. This method is typically used in large-scale solar farms and not in households or small businesses.

PV solar is more common and uses sunlight to create electricity through the conductive materials in solar panels.

Both types of solar power provide a clean energy source free from harmful emissions but depend greatly on sunlight and positioning the solar panels correctly.

Having solar power means you can take advantage of feed-in tariffs, where the excess power you generate at home or your business can be fed back into the energy grid, and you get paid a small amount per kWh to do so.

The Australian Government’s GreenPower program makes it possible for customers around the country to support clean energy generation simply through their electricity plans.

The GreenPower program means that accredited electricity retailers can sell GreenPower electricity plans. You don’t necessarily receive all your power made from renewables, but the retailer invests and supplies a certain amount of clean power into the energy grid to offset the emissions from your energy usage. This can be anywhere between 10 and 100% of your usage, depending on the specific plan you’re on. This means your electricity may not be completely clean, but it will be at least 10% carbon neutral.

When searching for a new electricity plan with us, we’ll display which plans available through our service are a part of the GreenPower program.

You can get out of a lock-in energy contract before it ends, but you will have to pay exit fees for breaking the contract early. However, many energy retailers do offer no lock-in contracts as well, which makes it easier to shop around for new electricity and gas plans.