What are the Different Types of Energy Plans?
Are you wondering what the different types of energy plans are? Then you’re in the right place. We’ve taken the time to explain all the different electricity plans currently available in the Australian market.
If you’re looking to get the absolute most out of your energy plan, then it’s important to understand exactly what types of plans are available, and how they differ from one another. This level of understanding will make comparing plans and providers to find a more affordable option much simpler.
Types of Energy Plans
In general, there are two main types of energy plan that consumers can choose from. These are:
- Market Offer: Market offer contracts will often provide incentives and benefits for a certain period of time, including bill credits, discounts and other rewards programs. However, this benefit period will generally only last for a year or two, after which energy prices may change.
- Standard Contract: Standard contracts, also known as Default Market Offers, are government-regulated energy plans. These contracts are popular amongst customers who don’t regularly change their energy plans. These plans are generally less competitive than market offers and do not offer benefit periods.
Additionally, consumers can choose between fixed rate energy plans and variable rate energy plans:
- Fixed Rate: This type of plan ensures that the rate charged will not change for a set period of time – generally a year or two. These contracts do not include market offers and so do not provide benefits or incentives.
- Variable Rate: These plans are more widely available and are offered by almost all electricity retailers. A variable rate plan means that power companies are able to change the rate that they charge you at any time – although they must give you notice. Typically, however, rates only change every 12 months.
Types of Tariffs
Tariffs dictate the way in which you are charged for energy. The main types of tariffs are:
- Single Rate Tariffs: You pay the same rate for energy, no matter what time of day it is.
- Time of Use Tariffs: The rate you pay varies according to the time of day; peak periods have higher rates and off-peak periods have lower rates.
- Controlled Load Tariffs: High-energy use appliances are metred separately and can usually only be used during off-peak periods.
What Energy Plan is Best for Me?
It’s almost impossible to know which plan, rate or tariff will be best for you—there are just so many variables to consider. The most suitable energy plan will depend on factors such as the size of your household, the types of appliances you run and what time of day you use the most power.
It’s also important to keep in mind that all power suppliers will offer all types of plans, rates and tariffs. Plus, tariffs can differ depending on where you are located within Australia.
That’s why we recommend that you compare energy plans first, before locking in a provider.