The competitive retail market has copped more than its fair share of criticism over the last decade, some of it justified and some of it exaggerated. Some have criticised how ‘complicated’ the market is, that electricity pricing is confusing, or that you need a PhD, an excel spreadsheet, and a long weekend to find a cheaper electricity deal. Even then, some feel a cheaper deal often doesn’t apply to their circumstances.
But that’s not the case, and telling people as much impacts their confidence in the market. This also makes it more likely for people to avoid engaging with the market and hamper their ability to get a better energy deal.
For the most part, engaging with the retail market these days is remarkably easy, and for people with a smart meter on the eastern seaboard of Australia, choosing a new electricity retail offer can be a simple choice to get right. As the Australian Energy Council launches its new ‘It’s Easy To Switch’ campaign, it’s a perfect opportunity to revisit the evolution of energy market switching and offer comparison – and just how far the sector has come.
The evolution of switching
In the early 2010s, customers signed up to a new retailer and waited up to 90 days for the transfer to occur on their next scheduled meter read date. Sometimes, if a retailer wanted to increase their customer numbers quickly, it might request the network to take an out of cycle read (a special read) to avoid the need to wait until the next scheduled read, but generally, the switch would take at least a month or two.
Today, all customers, even those without a smart meter, can transfer within two business days. For smart meter customers, this transfer happens on an actual read that the retailer can access from just one day prior, while other customers will either transfer on the last actual read date, an estimated read, or a special read. But whatever the method, when a customer switches today, they see the benefits just a couple of days later.
So what about finding a deal to switch to? Again, the system has improved dramatically.
In 2010, a proactive customer could engage a commercial comparison service to do the work for them, but it wouldn’t compare all offers just the ones on their books. Or a customer could ring around to ask the retailers for their best offer themselves. More commonly, customers were approached by retailers and offered a cheaper deal.
By 2015, both the Australian Energy Regulator and the Victorian Government operated functional (albeit clunky) price comparison websites – Victorian Energy Compare and Energy Made Easy. Victorian Energy Compare started to accept smart meter data to enable customers to do an accurate comparison of offers, but the file needed to be in a specific format, and customers had to have a moderate level of technical literacy to be able to work out how to use it. Hardly an optimal experience for what is really a boring bit of life admin for most.
In the last few years both independent comparators have improved markedly and reached a level of functionality where the AEC is confident to recommend customers utilise those sites to seek out a new retail offer.
Today, both Victorian Energy Compare and Energy Made Easy allow customers to instantly upload their meter data. Information is pulled directly from AEMO’s systems; this means, a customer only requires their national meter identifier - or NMI - and a few clicks.
I recently switched retailers and the whole process - from identifying the cheapest deal for my specific usage profile, clicking through to the new retailer’s website, to signing up - took no longer than 15 minutes. Hardly a significant time impost given I was now saving a couple of hundred dollars a year.
So why do people continue to tell you that the retail market is confusing, and switching is too hard for the benefits you gain?
It suits some commentators to discredit the retail industry and encourage customer wariness. This is unfortunate and occurs due to a lack of awareness amongst consumers about the many positive developments that have occurred in the retail energy industry in recent years. People remember 2015 when comparison was tricky, and seem to be less inclined to see if things have improved.
That lack of awareness is why the AEC is launching It’s Easy To Switch. Central to this engagement is a short, easy to understand animation walking customers through the switching process with Victorian Energy Compare and Energy Made Easy.
There is no better time to engage in the retail market and pick a cheaper deal. And it doesn’t matter if you are an industry expert, or a complete novice. If you haven’t checked your offer in a couple of years, the time is now. If you know somebody who isn’t digitally literate, offer to spend a few minutes to help them out.
Take a look at these videos – you might be surprised just how easy it is to find a cheaper deal for your circumstances. Share them far and wide!
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