The cost of living is rising, and for many of us it can seem as if we are helpless to do anything about. In reality, there are many steps that can be taken to protect yourself from utility spikes.
Utility costs are typically an automatic spending process, and we sometimes forget that the services and products available to consumers are constantly changing. What may have been a good deal when you signed up may now be outdated, or perhaps you’re paying for a service you no longer use to its full capacity (think internet or mobile call plans).
Develop an action plan
Changing habits can be a challenge, so it’s important to have a solid plan in place. Some factors to consider include your current usage habits, wastage figures and an outline of peak and off-peak rates (where applicable).
Business owners or motivated home owners may even consider energy audits to ensure every aspect has been considered.
Compare and save
While it may be beneficial to change to a provider offering lower rates, it’s not always necessary – many will be willing to negotiate on various factors if you take the time to speak with them:
• Direct price matching of competitor prices.
• Reduction of regular admin costs by setting up direct debit payments.
• Further discounts for contract renewals.
• Consider switching from electricity to gas, where available.
Monitor usage figures
Any sudden jumps may be due to unseen factors. If concealed water leaks are present, a simple test can help. Check your meter, wait a few hours and check it again. Has it increased without you using any water? If so, you may have a problem that has nothing to do with your provider.
Peak and off-peak tariffs
Most electricity providers offer customers substantially discounted rates during specific times of the day, in either year-round or seasonal options. By using energy-hungry appliances during off-peak times, customers can save money. The specific off-peak times will vary from company to company, although they tend to be late night through early morning (e.g. 11pm to 6am) each day. The type of meter you have in your home or business will help you understand how utility spikes are affecting you.
• Single rate: Charge one rate, do not provide off-peak electricity.
• Interval or time of use: Charge electricity at peak, off-peak and shoulder rates.
• Two rate: Two rates charged for all electricity used, recorded on two separate registers (peak and off-peak).
• Controlled load or off-peak meters: All electricity charged at one rate, except for a specified appliance, such as a hot water system, which is supplied electricity during off-peak times and charged at off-peak rate.
To find out which meter you are currently using, simply contact your service provider.
Alternative energy sources
Solar power is fast becoming a popular choice for home and business owners trying to offset electricity price rises. While suitability must first be evaluated, installation of solar panels gives customers three ways in which they can save money on electricity costs:
• Gross feed system: Where the customer is paid for every kW produced.
• Net feed system: Where the customer is paid to export excess electricity produced.
• Electricity offsetting system: Where power is generated for use during the sunny periods of the day.
Australia does not have a nationalised solar tariff program currently, only state-run schemes. The models available to customers will vary from state to state.
We may not be able to control the increasing cost of living, but with a little homework and negotiation we can minimise the impact. Good intentions will only get you so far – having a clear plan in place is the smartest thing you can do to combat utility spikes.