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A new analysis from St Vincent de Paul Society and Alviss Consulting has revealed what we all probably know: Electricity prices across the country are continuing to rise.
These increases are leading many people to consider what other options are available to them from switching providers to investing in small-scale renewable energy systems. Solar PV panels can be used to generate energy and solar hot water systems to reduce water heating costs.
Why are energy bills so expensive?
Gavin Dufty, the manager of policy and research at the St Vincent de Paul Society in Victoria says people aren’t really aware of what makes up their bills and therefore what measures they can take to lower these across the board.
“So for example, the cheapest network costs we found are in the city of Melbourne, which are only paying about 24 per cent of their bill in network prices, whereas 58 per cent of people’s bills in country NSW is due to poles and wires,” he told ABC news on October 1.
Network costs are partially to blame for rising energy prices. The Australian Energy Regulator oversees these costs, which means consumers are limited in how they can reduce their costs from this perspective.
The wholesale cost of electricity varies from state to state and can be anywhere from 13 to 22 per cent, the report indicated. It said that the wholesale price continues to increase.
“For electricity, a typical breakdown of the final price is around one half for the network component and 40 per cent for the wholesale component, with the retail component and margin comprising the remainder,” the report said.
Your electricity retailer will pay the network charge and pass it on to you, the consumer.
Another factor that plays a huge impact on rising electricity prices is the cost of poles and wires. Typically this is more in states with a larger geographical spread as they require more poles to cover a wider area of land and reach more people.
The remainder of your bill will be the retailing component, which is the cost to get the physical bill to you and pay staff to take care of the retail business.
There is less competitive pressure in Victoria, Mr Dufty said, which has resulted in higher retailer costs.
How can bills be made clearer for consumers?
The report suggests that the process for standardising costs and charges should be made clearer, so that consumers can more easily compare retailers to get a better deal.
“A number of companies call the same thing different things as well – some are a supply charge, some are an availability charge, some are a service charge and some are a fixed charge – and in doing that we think that is just creating customer confusion,” Mr Dufty said.
What can you do to lower your bills?
As well as taking all measures to lower the amount of electricity used in your home by switching off appliances when not in use, you could also consider doing an electricity comparison to ensure you are with the cheapest provider.
Another method to consider is installing solar PV panels to generate electricity for your home. These can be complemented perfectly by solar hot water systems, which can provide between 50 – 100 per cent of your hot water requirements, meaning your bills may be lower as a result. Some people are able to use these technologies together in order to become self-sufficient, meaning they can go off the grid entirely.
For more information about solar hot water systems, don’t hesitate to get in touch with the team at Apricus.