Energy bill discounts are not always as cheap as they appear.
Energy bill discounts are not always as cheap as they appear.

Why energy discounts could be misleading

BIG PERCENTAGE discounts offered to energy customers who pay their bills on time mean nothing if the price is too high in the first place; and research has revealed Australians are struggling to pay their bills regardless.

RELATED: How to save on energy costs

A survey of 1000 Australian adults, commissioned by Comparethemarket.com.au, revealed 57 per cent did not feel that pay-in-time discounts helped pay their bills.

For 44 per cent of these, the discounted balance was still too expensive, while 38 per cent found the pay-on-time deadline too tight.

Consumers should not pay attention to the percentage of the discount, because 45 per cent off on one plan might still not make it cheaper than a good value plan with no discount, warned Abigail Koch, consumer advocate at Comparethemarket.com.au.

"Energy companies typically market plans or products on discounts, not on price," Ms Koch said.

"It is tempting for customers, but it means little when you don't understand what price it is based on."

Ms Koch said energy retailers offered discounts to recruit and retain customers, but those customers often failed to notice when the discount period ended.

"The majority of discounts are for 12 month contracts … once they're up, you go on a standard contract," she said. "Energy companies now have to inform customers when their discount period is coming to a close, which is great, but a lot of them let you know by email. If you don't check your emails often, you might miss that information.

"Eye catching discounts are designed for customer acquisition, because that retailer knows once people sign up they are likely to stay loyal and when the discount period ends, they become a really lucrative customer."

Don’t let your energy bills get away from you.
Don’t let your energy bills get away from you.

Canstar Blue data shows a number of non-discounted energy plans across different states that are cheaper than some offering up to 40 per cent off.

Canstar Blue editor Simon Downes said the best way to work out which plans are actually the cheapest is to compare energy price fact sheets "to determine exactly how much retailers are charging for energy supply and usage".

Mr Downes said working out a competitive usage and supply rate in your area is the key, which can still be complex and challenging.

"Like them or not, comparison websites do cut through the confusion and offer a guide as to which retailers are genuinely the cheapest in your area," he said. "But consumers should still do their own price fact checking … if you have a huge discount plan, it may well work out a good deal, but only if you stick to the conditions."

BITCOIN: Should you buy it now?

Pay-on-time discounts are not the only option for those looking for a better price.

"Direct debit discounts are often a safer bet," Mr Downes said. "If you're struggling to pay your bill on time, some retailers simply allow you to delay your direct debit date by a week or two and you won't lose the discount."



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