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Reduce your energy bills

About this guide

Power prices are in the news, prompting some households to take a fresh look at energy consumption. The good news is there's plenty you can do to lower your bills by changing how and when you use energy, and by shopping around for an energy contract which suits your needs.

This guide is about the choices available to you. Every household situation is different and the changes for each household will be different. So the best place to start is by understanding how much energy you use each day (and when), as well as which energy saving actions will have the biggest impact in your home.

Things to consider include:

  • the size and features of your home
  • the energy efficiency of your appliances
  • your lifestyle and the times of day you use most power at home
  • the way you manage and use the equipment around your home
  • your choice of energy retailer and energy contract.

About your electricity bill

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Your electricity bill is made up of a number of costs. Electricity retailers generally bill you in two ways—with fixed charges and variable charges. The variable part of your bill you are able to influence directly (for example by changing how and when you use power) and by which energy contract you choose.

The fixed charge is a flat daily fee that your retailer charges you to cover costs associated with having an active electricity connection.

Costs shared by all network users also affect your bill. They include network costs—the poles and wires that get electricity to your home—which make up about half of total electricity costs.

Network costs have been driving up electricity prices in recent times, largely due to the need to maintain and upgrade existing aging infrastructure and also to ensure the network can meet demand at peak times (when everyone is using electricity).

Recent market reforms are working to reduce network costs. By reducing consumption at peak times households can also contribute to a reduction in future network costs, by helping avoid the need for further network upgrades. For those requiring more detail, there's additional information to help you understand your bill and manage your usage (PDF 125KB).

You can continue to make energy savings in your household by following some of the ideas in this guide and reducing your use.

How to start saving!

This guide has been designed to give you the big picture as well as some of the nitty-gritty facts on energy consumption so you can make better choices starting today.

Follow our three steps to start saving:

  1. Get informed. Find out how much you can save, what's behind energy price increases as well as the key home and lifestyle factors affecting your bills.
  2. Get organised. Manage your energy use by understanding your energy bill and identifying energy hot spots around the home so you know where to start.
  3. Get moving. Compare electricity and gas retailers in your area, and decide whether time-of-use pricing, off-peak hot water, and smart meters are for you. Select energy-efficient appliances and follow our checklist of no-cost energy saving actions you can take now.

How much can you save?

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By using energy wisely and adopting energy-saving measures, you can save money and cut down on energy wastage at home while meeting your needs for convenience and comfort.

Whether it's washing clothes in cold water, adjusting your thermostat or turning off power at the wall—it all adds up. An average family of four could be saving hundreds of dollars a year by making just a few changes.

The following simple actions could save a household of four about $875 over the course of a year.

  • Getting rid of the second fridge, if you’ve got one, could save around $172 a year.
  • Switching off the game console after use could save up to $193 a year.
  • Using the clothesline once a week instead of using the dryer could save around $79 a year.
  • Installing a water-efficient showerhead could save you up to $430 a year on energy and water.

These amounts are a guide only. Exact savings will vary depending on the age of your appliances, the size of your home, the climatic zone you live in, and the energy prices you pay, including the type of energy contract you choose.

If you need to upgrade a major appliance, buying an energy-efficient one is often a worthwhile investment over the life of your product. By replacing your electric storage hot water system with a solar hot water system or a heat pump water heater, you could make significant savings on your energy bill. The amount you save depends on your individual circumstances.

What difference can I make?

Household emissions table showing sources of household emissions. In order from highest to lowest they are: transport, appliances, water heating, space heating, waste, lighting, standby power, space cooling & cooking

Every household that takes action large or small is not only helping their hip pocket, but also contributing to Australia's efforts to tackle climate change.

Households produce 21 per cent of Australia's carbon emissions. That means the average Australian household creates around 14 tonnes of greenhouse gases a year, including private transport use and the decay of household waste in landfill.

What's powering the price rises?

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Electricity prices have risen significantly over the past eight years largely due to increases in network costs. The 'network' is the transmission and distribution system of poles and wires that carries electricity to your home. The repair and replacement of ageing poles and wires, increased peak demand (periods placing the highest demand on the energy network—such as hot summer days), population growth, and rising standards for power reliability have all contributed to network cost increases.

Over the long term developments in electricity delivery will give us a more reliable, modern and efficient power industry and help to build a secure energy future for Australia. The Australian Government has produced a series of fact sheets to help you understand electricity costs (PDF 185KB) and what's causing the changes (PDF 225KB) in more detail.

While a range of factors will continue to affect electricity prices, you can influence how much you pay by reducing your energy consumption and choosing the best contract for your circumstances.

Reducing your energy use will help to counter rising electricity costs. The impact on your bill will depend on the changes you make coupled with the impact of any price changes. Regardless of whether your bill reduces overall, it will be less than if you had done nothing (and far less than if you had increased your energy use).

Changing gas prices

Retail gas prices are increasing. Households need to carefully compare electricity and gas prices in relation to their particular circumstances to make informed decisions about reducing their energy bills.

The decision on whether the use of gas or electric appliances will reduce energy costs will depend on a number of factors including:

  • where you live and the energy supply options available
  • how much gas you use
  • your gas tariffs (some gas tariffs are tiered and decrease in price when households use more gas)
  • the number of gas appliances you have (heating, hot water, cooking)
  • how old your existing appliances are and the upfront costs of replacing one or more appliances
  • how much alternative electric products cost to purchase and run
  • connection fees and charges.

As with electricity, households should shop around to see if a better energy deal is available in their area (see Making the switch). Particularly if you have been on the same contract for some time, there may be a number of different offers that may better suit your circumstances and help to reduce your energy costs.

Key factors impacting your household's energy bills

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A range of factors determine the amount of energy used in individual households. Some reflect changing personal preferences—such as the increase in home entertainment and technology products—while others relate to the climate and the type of housing where you live.

The main factors affecting your energy use include:

  • the local climate where you live
  • the total size of your home—and whether it's a townhouse, apartment or freestanding home
  • the design of your home—orientation and whether passive heating and cooling opportunities are used
  • features and appliances—the size, number and energy efficiency of your major appliances
  • habits and personal preferences—the behaviour of the people in your house including how much heating, cooling, cooking, showering, washing and clothes drying is done.

Some features in your present home (such as size and orientation) you are stuck with, but you can still take advantage of local conditions and make your home function as efficiently as possible – look at our tips for heating and cooling to get some smart ideas.

If you're planning changes to your home, or building a new one this is the most effective time to consider energy (and water) efficiency.

Manage your energy use

If you don't know where and when your household is using energy, it's difficult to make decisions or prioritise actions that might reduce your costs. The best way to manage your energy use is to measure it. Your energy bill is your best friend when it comes to this as it contains the information you need to monitor how much gas or electricity you are currently using.

  • Get to know your energy bill. Understanding your energy bill including all the fine print will help you to assess your energy use patterns and levels so you can begin to make changes and savings—around the home.
  • Do some simple comparisons. For example, by comparing your use from the same period in the previous year, you can get a picture of your energy consumption in different seasons. If your use is higher in winter or summer, you might want to look at the reasons and some options for reducing it.
  • Consider the times of day when your household uses the most energy. This will be an important guide in selecting the right energy contract. Are you home during the day or does your family arrive home together and turn on heating or cooling, cook dinner, watch TV, go online and do homework?
  • Change when you consume energy away from peak times. For example by running your washing machine late at night you may be able to choose a contract that rewards this change.
  • Take action at home. If you know your bills are always high in winter you could look at a mix of options to reduce your energy costs. This might include using thicker bedding so you don't need to leave heating on overnight, heating only the rooms you are using, stopping up draughts and cracks with simple window and door tape, and investing in a more energy-efficient heater if your current model is guzzling too much energy. If your bills are consistently high in summer and you are a pool owner there are steps you can take to reduce your pool pump running times and pool-related energy use.

Identifying energy hot spots around the home

To reduce your electricity and gas bills it helps to know about the major sources of household energy consumption and where your household fits in.

The major sources of energy use around the typical Australian home are spread across heating water, heating and cooling and refrigeration and other electrical appliances. Standby power, lighting and cooking make up most of the rest of your household energy bill. Growing sources of energy use around the home include air conditioning, entertainment systems, computers, pools and spas, and outdoor lighting.

To make the biggest impact on your energy use and costs:

  • Target the biggest sources of energy use around your home first—such as hot water and heating and cooling.
  • Identify ways you can carry out household functions more efficiently. This includes correct installation and placement of equipment, and keeping it well maintained.
  • Look for the no and low cost changes, easy and high impact changes you can make easily and start there.
  • When replacing or upgrading household items, consider the most energy efficient option you can afford. This will reduce the power needed to run the product over its lifespan.
  • Think about which personal preferences or habits could be affecting your energy use—and include these as part of your planning. Remembering to close doors, switch off lights, or pull on a jumper before turning up the thermostat are some examples.

Making the switch—compare electricity and gas market offers in your area

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One way to reduce your electricity and gas costs is to shop around to see if you are getting the best deal for your particular energy needs. In most areas except Tasmania, the Northern Territory, Western Australia, and areas outside South East Queensland, you have a choice of which electricity retailer to go with. It's important to note that even in areas where there's only one electricity retailer there will still be a number of energy contracts to choose from. So no matter where you live it’s important to make sure you are on the contract that is most suitable for your particular needs.

EnergyMadeEasy.gov.au lists a range of calculators or estimators to help with finding the best option for your household. These tools allow you to compare electricity and gas contracts available from licensed energy retailers. They can help you estimate your annual energy costs under each contract. You'll need access to your previous electricity and/or gas consumption information. If you don't have previous bills available—your current energy retailer can provide you with this information.

Keep in mind that the calculators are intended as a guide only. It's important to consider the recommendations against your particular household circumstances and any exceptions that might apply. Be aware that some of the non-government comparison services receive a commission for transferring customers to an electricity or gas retailer with whom they have an agreement.

You can follow our checklist for comparing offers and use the comparison tool for your state or territory to help you make your decision. Visit EnergyMadeEasy.gov.au for more information and to find out the average electricity usage for a household of your size in your area.

If you choose an energy contract where you’re rewarded for moving some of your energy away from peak times you may be able to maximise savings. It’s important to be aware, however, that if you choose a contract that does not suit your household or lifestyle, you could end up paying more.

Keep in mind, switching providers can help to lower your contract costs but it won't lower your energy use.

Managing your bills

You can ask your energy retailer to set up regular payments towards your bill, so it’s easier to budget, especially if you're on a fixed income. Or you can ask for a more frequent billing cycle and pay monthly instead of every three months. While this won’t reduce your bill it can make it easier to manage your energy budget and avoid surprises when your bill arrives. Many retailers offer discounts for on-time payments so make sure you check if this option is available.

If you have a dispute regarding a bill there are a number of services available to assist you. These include Energy and Water Ombudsman services (see Resources and assistance section) each state and territory. The first step, however, is always to try to resolve the issue with your retail energy provider. This fact sheet helps to explain your rights as an energy customer in more detail.

Avoiding the peak: stop your bills climbing

Under some contracts, energy can cost you less if you use it outside the peak times—usually after 10pm through till 7am. For some households this can be an effective way to reduce energy bills. To take advantage of reduced tariffs or costs you need to have access to off-peak hot water or time-of-use-pricing.

Off-peak hot water

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Hot water makes up 25 per cent of household energy use in the average home, so switching an existing larger electric storage hot water system to an off-peak tariff can save you money on your energy bill. With an off-peak storage hot water system your water is heated during the cheaper, off-peak period of the day and stored for use when you need it. It's only available with some electric hot water systems and through some providers so you'll need to check with your energy retailer to see if your household can access this option. It's important to note that using off-peak hot water doesn't reduce your hot water use so it doesn't help to reduce greenhouse gas emissions.

If you're considering upgrading your hot water system our hot water information can help you choose the most effective system to save you energy and money.

Time-of-use pricing

There is increasing choice in how you buy energy, and how this is calculated. Over time your bill is likely to change from focusing on how much energy you use across a billing period, to how much demand your household places on the network during peak times of the day. It's in your interest to be on the contract that gives you the lowest bill. This will be the one that best matches your overall use and time-of-use pattern. You should check your bills every so often to confirm that you are still on the best offer for you.

Depending on where you live, there are a number of tariffs available that can help you save if you can reduce your energy use at peak times. Time-of-use pricing arrangements (also known as demand-based tariffs) mean that the cost of your energy varies depending on what time of day you use it. Time-of-use tariffs are often divided into two or three periods—peak, shoulder and off-peak. The exact time periods these cover are determined by individual energy retailers, so you'll need to check the specific times when you sign up.

Before making a decision to move to a different billing arrangement, you need to look carefully at your household's timetables and energy use to see whether time-of-use pricing will work for you. To access time-of-use pricing you will also need to have an interval or 'smart' meter installed.

These new electronic meters measure your energy use in half hour intervals. With traditional meters you can’t tell how much energy you are using until your bill arrives, but smart meters can be linked to a range of monitors and displays that make your energy use patterns more visible. This information can help to inform your household’s habits and help you use energy at cheaper times of the day. Contact your energy retailer to see if you can access this option.

Choose and use energy-efficient appliances

An energy rrating label showing 7 stars out of 10

The price tag doesn't tell the whole story when weighing up the cost of your new television, refrigerator or washing machine. If you take into account that all the appliances you have at home take up around 30 per cent of your total energy bills, looking at running costs like a "second price tag" and choosing products accordingly will save you a considerable amount of energy and money over time.

  • Many appliances that have a less expensive purchase price may end up costing you far more in energy costs over the lifetime of the product. Choose appliances and technologies that suit your needs and that use the lowest number of watts or megajoules. Avoid the lure of upgrading to bigger products or those with more features you may never use and which can lock you in to costs for years to come.
  • Compare the Energy Rating Label found on appliances including including televisions, computer monitors, dishwashers, washing machines, refrigerators, freezers and clothes dryers and go for the product with the highest number of stars. To make this easy there’s an Energy Rating App for all types of phones, or go to the Energy Rating website and compare the efficiency of appliances. There is also a Voluntary Labeling Program for pool pumps—the more stars, the less energy the product will use.
  • Gas appliances are not regulated for energy efficiency in Australia. Labels that appear on some appliances (space heaters, ducted heating and water heaters) are part of an industry-led voluntary Gas Energy Rating Label not monitored by government.
  • For those products without energy ratings, you can find out how much energy they use and compare this with a product of a similar size or capacity and which manufacturers include energy saving features in their products. You could also check to see if the product has the blue ENERGY STAR® mark.
  • For appliances and technology you already have at home, you may want to identify which ones are the biggest energy users by using a simple calculation to estimate the running costs and then consider how you save money by using them more efficiently.
  • Install your appliance so it runs efficiently and at optimum levels. For example, fridges should not be placed next to ovens or warm spots as they'll need to work harder to stay cool. Proper use and maintenance is also important, for example, allowing heated food to cool before placing it in the fridge and repairing seals on your fridge door so cold air doesn't leak out. Read the instructions for individual appliances before you install them to ensure you position and use them correctly from the start—saving you time and energy.
  • Use thermostat controls to minimise energy use and still achieve home comfort. Spend some time reading the manual so you know how to turn on these features if they're not the default setting.
  • Operate the appliance for the shortest amount of time possible and turn it off at the wall when you're not using it. This includes turning off computers, screens and other office and home entertainment products such as printers and speakers (with the exception of appliances like refrigerators and some medical equipment which needs to stay on all the time).

Checklist: Start Saving!

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5 ways to reduce your energy bill now that won't cost a thing

  1. Hot water—potentially the single biggest source of energy use in your home.

    Wash clothes in cold water and only wash full loads. Run the dishwasher only when it's full and scrape plates first then cold water rinse if they need it. Fit a low-flow showerhead (it'll pay for itself in no time) and take shorter showers.

  2. Climate control—heating and cooling are usually the next biggest energy guzzlers.

    In winter, set your heating thermostats between 18 to 20 degrees Celsius. In summer, set your cooling thermostats between 25 to 27 degrees Celsius. Every extra degree increases your heating and cooling energy use by between 5 and 10 per cent. Close internal doors and only heat or cool the rooms you are using.

  3. Window watch—up to 40 per cent of the heat in your home could be leaking out your windows.

    In winter, open curtains to let the sun in and close curtains before it gets dark to keep the heat in – especially while your heater is on. In summer, close curtains during the hottest part of the day. At night you can open curtains and windows to let warm air out and cool breezes in.

  4. Use appliances wisely—they could be responsible for as much as 33 per cent of your energy bill.

    Turn off additional fridges and freezers when not needed and think about getting rid of these. Use lids on pots while cooking, fill the kettle and pots with only as much water as you need. Reduce pool filter running time to the safe minimum set out in the manual. Dry clothes on the line not in a dryer—it's free!

  5. Turn it off at the wall—standby power can account for more than 10 per cent of your household electricity use.

    Any items with a little light on or clock are using power, and your mobile phone charger is drawing power even when your phone is not plugged in. Turn off appliances at the wall when you're not using them—it's a very easy way to save energy. Consider smart power boards and take control of your technology.