With continuing spikes in wholesale electricity prices adding to Australia’s soaring cost of living, energy bills will squeeze household budgets more than ever this winter. Now new research has revealed that a staggering 75 per cent of households will change the way they use energy at home in a bid to save money.
The finding was derived from an independent survey of 1018 Australian adults commissioned by Australian financial information platform Money.com.au in the lead up to winter, to gauge if and how households will reduce their energy bills.
Wholesale electricity prices on the National Electricity market have soared by 141 per cent in the past year, and 67 per cent in just the March quarter. Experts have warned that retail electricity prices are expected to jump by up to 10 per cent on 1 July following a surge in wholesale prices in the past year.
Money.com.au found that half (51 per cent) of respondents said they plan to reduce their use of non-essential appliances this winter to lower their energy bill. This includes energy-saving tactics such as line-drying clothes as much as possible rather than using a dryer.
Nearly half (48 per cent) also plan to use appliances and power points only when necessary – such as turning off lights when they leave the room, turning off appliances at the wall when not in use and avoiding charging devices longer than necessary. Forty-two (42) per cent will limit their heating and rug up more inside the house.
Surprisingly, just 24 per cent of respondents said they will switch energy providers to find lower rates.
Queensland the least energy conscious state
When it comes to the most energy conscious state, Australia’s capital came in on top while Queensland ranked last. This could be attributed to greater awareness among ACT residents of the need to conserve energy, despite the cold climate.
ACT households are most likely to trade in the heater and electric blanket for an extra blanket and pair of warm socks. Half of ACT survey respondents said they would reduce their heating this winter to help reduce bills, compared with just one third of Queenslanders.
More ACT residents (58 per cent) would also reduce their use of non-essential appliances this winter, compared with just 45 per cent of Queenslanders and South Australians. Queenslanders were also least likely to reduce their use of appliances and power points (at 45 per cent of respondents), while a whopping 63 per cent of ACT residents would.
However, residents in Australia’s capital and in NSW were least likely to haggle with their energy provider. The highest proportion of residents willing to switch energy providers in search of a better deal are in South Australia (33 per cent), while just 21 per cent of ACT and NSW residents and 23 per cent of Victorians would do the same.
96 per cent of respondents want to continue working from home, despite higher energy costs
On top of the increasing energy wholesale rates, the COVID-19 pandemic has seen more people adopt a flexible working-from-home lifestyle, resulting in increased household energy usage and costs. Despite the increase, survey results show strong resistance from Aussies to return to the office, with 96 per cent unwilling to change the number of days they work at home as a way of cutting back on household energy costs. As fuel prices soar, the cost of commuting to an office often outweighs the increased household energy costs of working from home. Temporary Covid-19 tax deductions have also allowed people to claim added household expenses, fuelling people’s desire to work from home.
Financial adviser and spokesperson for Money.com.au Helen Baker says there are other improvements and changes Australians can make to their household this winter to prevent their electricity and gas bills from increasing.
Helen shares some of her top tips on how Aussies can reduce their electricity and gas bills.
1. Solar Power: Installing solar panels is one of the most effective long-term investments you can get on board with. Each State and territory offer different rebates and savings on solar panel installation, which can help save thousands long term on your electricity bill. “One of my clients was previously being charged around $900 per quarter for their electricity bill but are now only paying around $100 per quarter. They had to pay an upfront installation cost of around $3000 but the money was made back within around six cycles of bills and they will now continue to see significant long-term savings,” Helen says.
2. Gas: Switching your property over to a combination of gas and electricity could reduce your household energy bills significantly. While gas is often less powerful than electricity, the daily supply charges are generally lower. It may take longer to start seeing savings due to the upfront purchase and installation costs, however it can be a valuable investment in the long-term. There are plenty of comparison websites available online for customers to compare the various gas and electricity rates available.
3. Comparing energy provider rates: Don’t get complacent with your energy bill. Most energy contracts are 12 months. At around 10 months, start shopping around and looking at other providers for a better deal. You may even be able to use this as leverage to ask your existing provider to do a better deal. If they can’t do a better deal, consider switching providers.
4. Early bill contributions: Bill shock is one of the biggest burdens to Australian households. Many companies enable you to send across or pay off your energy bill throughout the year. Putting money towards your bill each week, fortnight or month, in line with your regular pay cycle, eases the financial pressure of a large energy bill each quarter.
5. Lightbulbs: Believe it or not, the type of globe in your light can have a huge impact on the cost of your energy bill. Choosing the light bulb that will cost you the least in the long run, as opposed to what is cheaper in the shop, is key to cutting costs. When buying light globes, customers should look at lifespan and efficiency. For example, halogen bulbs are generally cheaper to buy then LED bulbs, but a good quality LED lasts longer and uses far less energy.
The full survey results, with age and State breakdowns, can be found here: money.com.au/research/