How to Compare Energy Plans (The Stuff Retailers Don't Show You)
Shopping around for electricity can save you real money — but only if you know what to actually compare. Most people look at the wrong things. Here's how to compare energy plans properly, so you're not fooled by marketing spin.
Why the Advertised Discount Doesn't Tell the Whole Story
Energy retailers love to advertise big discounts. "30% off!" sounds great. But 30% off what, exactly?
In Australia, electricity retailers set their own base rates — the prices before any discount. The Australian Energy Regulator (AER) sets a reference price (sometimes called the default market offer) that acts as a benchmark. When a retailer says "30% off the reference price," they're discounting from that benchmark.
Here's the catch: a retailer can charge a very high base rate, then offer a big-looking discount. Another retailer might charge a lower base rate with a smaller discount. After the discount, the second retailer could actually be cheaper — even though their headline number looks less impressive.
Discounts also come with conditions. You might get the full discount only if you pay on time, sign up for paperless billing, or use a specific payment method. Miss one condition and the discount shrinks or disappears entirely. So a "30% discount" might really mean "25% off if you pay by direct debit and never miss a due date." That's a very different deal to what the ad implies.
The Three Numbers That Actually Matter
Once you strip away the marketing, three numbers determine what you'll actually pay.
Usage rate — This is how much you pay per unit of electricity you use. It's measured in cents per kilowatt-hour (c/kWh). A kilowatt-hour is the amount of energy a 1,000-watt appliance uses in one hour — think a large heater running for an hour. The lower your usage rate, the less you pay every time you turn something on.
Daily supply charge — This is a flat fee you pay every single day, just for being connected to the grid. It doesn't matter whether you use any electricity or not. A lower daily charge saves you money year-round, regardless of how much power you use.
Conditional discount terms — If a plan includes a discount, read exactly what conditions apply. Ask: what do I have to do to keep this discount? What happens if I miss a payment? Is the discount locked in, or can the retailer change it? When you know these three numbers for each plan, you can work out a realistic annual cost — and that's the only number that really matters.
What to Watch Out For
A cheap-looking plan isn't always cheap for long. Here are the traps worth knowing about.
Benefit periods that expire. Some plans offer great rates for a fixed period — say, 12 months — then quietly roll over to a higher rate. After the honeymoon ends, you could be paying well above market without realising it.
Rate rises mid-contract. Not all energy plans lock in your rate. If a plan allows the retailer to change the usage rate or supply charge without exit rights, your "great deal" can become ordinary at any time.
Exit fees. Some plans charge you a fee if you leave before a set period. If you find a better deal, an exit fee can wipe out any savings. Always check whether a plan has one before you sign up.
Bundled deals. Some retailers offer discounts when you bundle electricity with gas, or with internet services. These can be good value — but compare each component separately first. Bundling can hide a weak deal inside a flashy package.
Solar feed-in tariffs. If you have solar panels, the rate the retailer pays you to export power back to the grid matters. A plan with a lower usage rate but a poor feed-in tariff might cost you more overall.
How WattLite Helps
WattLite is a free Australian energy comparison tool that cuts through the marketing noise.
Instead of showing you headline discounts, WattLite calculates your estimated annual cost based on your actual usage profile. You enter your details — how much energy you use, where you live, and whether you have solar — and WattLite runs the numbers across available plans.
That means you see what you'd actually pay over a full year, not just the discount percentage printed in the ad. WattLite doesn't sell energy plans and doesn't take commissions from retailers.