Home Blog Comparison services Customers slugged when they switch electricity providers: Study


Official advice: Switch electricity providers!

Governments and the ACCC urge customers to switch electricity providers to get better deals, and they do switch! About a quarter of customers switch electricity every year. 

However, are customers switching electricity providers effectively? A recent study shows that they are not. It shows that switching provides little gain unless the switching is done properly.

Study of Switchers versus Remainers

The Victorian Energy Policy Centre (VEPC) analysed about 48,000 Victorian household electricity bills. They analysed customers who had switched in the previous 12 months and calculated the savings available. They also calculated the savings available for the customers who had not switched.

Savings available

They found that those who hadn’t switched could save 20% of their bill or $281 per year. By switching effectively, these customers should be able to save $281/yr on average.

On the other hand, customers who had switched were paying $236 /yr. more than they should. Customers switching only saved an additional $45 /yr. because most are not switching properly.

Even if you’ve switched in the last year you should be able to save $236 /yr. based on the results of this study.

Confusion and biased advice in switching electricity providers

Of the 5 possible reasons that VEPC nominate for ineffective switching they find that only 2 are credible: 1. Customers find discounts confusing, and 2. Customers get poor advice including from price comparison providers.

They reviewed comparison sites which are used by many customers. All sites reviewed were paid by the providers whose offers they considered. Many of the sites would not provide online comparisons and insisted on a telephone call. The conversations focused on the discount without discussion of effective prices. None of the price comparison sites were prepared to estimate the savings.

Get the Cheapest price

When you switch electricity providers, make sure you get the cheapest price. Don’t miss out on getting all the savings that are available, try Energy Umpire which compares every electricity provider and calculates your savings. It’s free to find out how much you could save.