Reduce your energy bills

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About this guide

This guide is about the choices available for you to lower your energy bills. Every household situation is different and the changes for each household will be different.

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

There are 3 main steps to start saving.

1. Get informed

Get a better understanding of your energy bills and the key home and lifestyle factors that affect them.

2. Get organised

Manage your energy use and identify 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 consider solar PV and battery storage for your home.

Understand your energy bill

Understanding your energy bill including all the fine print will help you to assess your energy use patterns so you can begin to make changes and savings around the home.

Costs that make up your bill

There are many costs involved in providing electricity and gas to your home. These costs and their relative contribution to the total amount payable are not provided in detail on most energy bills.

Retail

Retail costs include administrative services, such as account and billing management, and customer support.

Wholesale

Wholesale costs are payments to the wholesalers (energy generators).

Network

Network costs are payments to the electricity and gas distributors who build and maintain infrastructure (poles wires and gas pipes) that bring energy to your home. Network costs make up about half of total electricity costs.

What is on your energy bill

Electricity retailers generally bill you in 2 ways — via fixed charges and variable charges.

The fixed charge is a flat daily fee for your electricity connection. It will be separately identified on your bill and is often called the ‘daily supply’ or ‘service to property’ charge.

The variable charge is the amount you pay for each unit of electricity and gas you use. It may be referred to as the ‘consumption’ or ‘usage’ charge. Some bills might show more than one variable charge. For example, a time-of-use plan might have different charges for different time periods usually called peak, shoulder and off-peak.

Energy Made Easy has more information about what’s on your energy bill as well as:

sample electricity and gas bills
what to do if you think your bill is wrong
what to do if you have trouble paying your bill.

Remember that retailers set out their bills differently and may provide slightly different information. Contact your retailer or check out their website if you need further help understanding your bill.

Key factors affecting your energy bill

A range of factors determine the amount of energy used in individual households, including:

your local climate
the size of your home and whether it's a townhouse, apartment or freestanding
the design of your home including its orientation and use of passive heating and cooling
features and appliances including the size, number and energy efficiency of major appliances
habits and personal preferences.

Take advantage of local conditions to make your home function as efficiently as possible. Look at our tips for heating and cooling to get some ideas.

The most effective time to consider energy and water efficiency is while planning changes to your home or building a new one.

Manage your energy use

These steps will help you manage your energy use and prioritise actions that might reduce costs:

Do some simple comparisons

Comparing your energy use to the same period in the previous year gives a picture of your energy consumption in different seasons. If your use is higher in winter or summer, look into the reasons why and options for reducing it.

Consider the times of day when you use the most energy

The times of day when you use the most energy 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/cooling and appliances?

Move away from peak times

Some contracts will reward energy use outside the peak times (usually 10pm til 7am). Running your washing machine late at night is one example of changes you can make.

Take action at home

Consider these options to reduce your energy costs in winter:

Use thicker bedding so you don't need to leave heating on overnight.
Only heat the rooms you are using.
Open your curtains when the sun is shining and close them before it gets dark.
If your ceiling fan has a reversing switch, use it to circulate warm air throughout the room.
Block draughts and cracks with window and door seals.
Avoid using the shower to get warm (aim for a 4-minute shower).
Turn off appliances not in use (such as TVs, computers and consoles) at the power point.

Consider these options to reduce your energy costs in summer:

Opt for fans instead of turning on the air conditioner.
Reduce heat from direct sunlight by using shade on windows (especially north and west facing).
When temperatures drop outside, open windows or doors on opposite sides of the room.
Block draughts and cracks with window and door seals.
Use the dishwasher or washing machine when its cooler and avoid using the oven in the hottest part of the day.
If you own a pool, invest in a more energy-efficient dual, multi or variable-speed pump and run it during off-peak hours.
If you use gas or electric heating for your pool, consider switching to solar or a heat pump and remember to use a pool cover.

To read more about actions you can take at home, check out our seasonal advice.

Identify energy hot spots around the home

The major sources of energy use around a typical home are spread across:

heating and cooling
hot water
pools and spas
refrigeration and other 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 entertainment systems, computers 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.
Look for low-cost, simple and high-impact changes and start there.
Ensure correct installation, placement and maintenance of equipment.
Think about personal preferences or habits that could be affecting your energy use and include these as part of your planning.
If you have an electric storage hot water system, consider replacing it with a solar hot water system or a heat pump water heater.
When replacing or upgrading household items, consider the most energy-efficient option you can afford by checking out the Energy Rating website.
Check out our Rebates sorter for incentives and assistance to upgrade your appliances.

Make the switch: compare electricity and gas market offers in your area

You should shop around to see if you are getting the best deal for your energy needs.

The best energy contract is one that matches your overall use and time-of-use pattern. If you choose a contract that does not suit your household or lifestyle, you could end up paying more.

If you choose an energy contract where you’re rewarded for moving energy away from peak times, you may be able to maximise savings.

In most areas except Tasmania, the Northern Territory, Western Australia, and areas outside south east Queensland, you have a choice of electricity retailers. Even in areas with only one electricity retailer there will be a number of energy contracts to choose from.

Energy Made Easy provides online calculators for you compare electricity and gas contracts available from energy retailers and find the best option for your household. Estimate your potential annual energy costs under each contract. Refer to your previous electricity and gas bills. If you don't have these, ask your current energy retailer and they can provide them

The calculators are intended as a guide only. It's important to consider the recommendations against your household circumstances and any exceptions that might apply.

Be aware that some non-government comparison services receive a commission for transferring customers to an electricity or gas retailer with whom they have an agreement.

Manage your bills

You can ask your retailer for a more frequent billing cycle and make fortnightly payments instead of one large payment every quarter.

Many retailers offer discounts for on-time payments so check if this option is available. Conversely, you may be penalised for late payments.

If you have a dispute, there are services to assist you. Read more about your rights as an energy customer.

Avoid the peak

Under some contracts, energy can cost you less if you use it outside the peak times (usually 10pm til 7am). To take advantage of reduced tariffs or costs you need access to off-peak hot water or time-of-use-pricing.

Off-peak hot water

Hot water makes up 25% of household energy use on average. Switching a larger electric storage hot water system to an off-peak storage system can reduce your energy bills.

With an off-peak storage hot water system, water is heated during the cheaper time of day and stored for use when you need it. It's only available with some electric hot water systems and providers, so check with your energy retailer if this is an option.

Time-of-use pricing

Time-of-use pricing arrangements (also known as demand-based tariffs) mean the cost of your energy varies depending on what time of day you use it. Depending on where you live, there are a number of tariffs available to help you save.

Time-of-use tariffs are often divided into 2 or 3 periods — peak, shoulder and off-peak. The exact time periods these cover are determined by individual energy retailers, so you will need to check specific times when you sign up.

Before making the decision to move to a different billing arrangement, 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’ll need a smart meter installed. Smart meters measure your energy use in half-hour intervals and can be linked to a monitor that clearly displays your energy-use patterns. This can help you switch your energy use to cheaper times of the day. Contact your energy retailer to see if you can access a smart meter.

Choose energy-efficient appliances

The price tag doesn't tell the whole story when weighing up the cost of your new television, refrigerator or washing machine. You will also pay for the energy to run your appliance.

You can make big savings over time by looking at running costs as a ‘second price tag’. Avoid upgrading to bigger products or those with more features you may never use, as these can lock you in to higher energy costs for years to come.

Compare the Energy Rating Label found on appliances and choose products with a higher number of stars. You can use the Energy Rating Calculator or go to the Energy Rating website and compare the efficiency of appliances.

Gas heaters are not covered by an Energy Rating Label in the Australian Government’s E3 Program. Certain gas heaters carry an energy rating label as part of a product certification process by state and territory gas technical and safety regulators.

For products without energy ratings, you can find out how much energy they use and compare with products of similar size and capacity. Look for manufacturers that include energy-saving features in their products. Also check to see if the product has the blue ENERGY STAR® mark.

Use appliances 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 if it can be avoided as they will need to work harder to stay cool.

Proper use and maintenance is also important. For example, let heated food cool before placing it in the fridge and repair seals on your fridge door so cold air doesn't leak out. Read the instructions for appliances before installation to ensure you position and use them correctly from the start.

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 not in use. This includes turning off computers, screens and other office and home entertainment products such as printers and speakers (with the exception of appliances which need to stay on like refrigerators and medical equipment).

Consider solar PV and batteries

A solar PV and battery system offers the potential of off-grid energy self-sufficiency. It’s also a major step in the transition away from fossil fuels.

Solar PV is an investment that, once paid for, will save its owner money by generating free electricity during daylight hours. Storing solar power maximises the benefits of your solar PV system.

To get a good idea of the potential benefit, use your electricity bills to estimate the amount of energy consumed annually by a household of your size in your area.

The cost of a home solar PV system starts at around $3500 for a basic installation with a payback period of 3 to 5 years. Adding batteries extends the payback period.

Check out our Rebates and assistance sorter to find help in your state or territory.

Feed-in tariffs

A solar feed-in tariff is the rate you are paid by your energy retailer for excess electricity you export to the grid. Feed-in tariffs differ among retailers as well as states and territories, and are subject to change.

The price you pay for electricity includes the wholesale price plus the costs of long-distance transmission, local distribution, metering, environmental schemes, retailing and GST. The price the retailer pays you for excess electricity, however, is just the wholesale price. Look for a combination of lower usage and supply charges mixed with a reasonable feed-in tariff.

If you are not satisfied with your feed-in tariff, you can also maximise savings by shifting your energy use to daytime where possible. This will reduce the need to purchase power from the grid. Heating and cooling, pool pumps, washing machines and dryers are all candidates to be moved to the middle of the day to soak up your excess solar.

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

1. Climate control

Heating and cooling is often the single biggest source of energy use in the home.

In winter, set your heating thermostats between 18°C and 20°C.
In summer, set your cooling thermostats between 25°C and 27°C.
Close internal doors and only heat or cool the rooms you are using.

Remember, every extra degree increases your heating and cooling energy use between 5% and 10%.

2. Hot water

Hot water is usually the next biggest energy guzzler.

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.

3. Window watch

Up to 40% 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, especially while your heater is on.
In summer, close curtains during the hottest part of the day and open curtains and windows at night to let warm air out and cool breezes in.

4. Use appliances wisely

Appliances could be responsible for as much as 30% of your energy bill.

Turn off additional fridges and freezers when not needed and think about getting rid of them.
Use lids on pots while cooking and 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.