When comparing electricity, gas, or solar offers, there are several factors that you need to understand briefly. Even if you don’t want to become an energy expert, then at the very least, look out for the following pieces of information on any given energy offer.
The Electricity Network
Every home is connected to a power grid through several transmission cables leading from the local substation through underground or overhead wiring. This wiring system can be thought of as an ‘energy highway’. It’s responsible for transporting energy across long distances and distributing it into homes and businesses.
Each homeowner pays to use this infrastructure when drawing electricity from the local substation via the distribution network. This is a tiny fraction of the overall supply cost, but it’s important to remember that every kWh you use from the grid has been transported from far away at great expense.
Every electricity company also has its set of power lines and substations, which they distribute energy through in a specific area under their ‘network’ brand name. The range of offers available from each retailer typically includes several plans with different prices depending on how much power you want them to buy for you from the grid and sell to your home or business.
The Energy Supply Charges
The electricity supply charges are shown as cents per kWh on your bill and contribute towards covering costs such as maintaining power lines, replacing old equipment, etc. Generally speaking, the lower the network fees, the better.
The Retail Fees (also called Retail Margins) are what you’ll see quoted as your bill. And, the lower the retail fees, the better. These cover a retailer’s operational costs and profit margin for supplying electricity to your home or business.
The Electricity Generation Unit
To use power from the grid at home, an ‘electricity generation unit’ is installed by cables that run into your home through walls, floors, or ceilings and then appliances that draw on this energy. These can include but are not limited to fridges, dishwashers, ovens, etc.
The initial purchase price of these units varies according to technology, efficiency, and size. For example, some older houses may still have ‘alternative energy’ systems such as solar panels or hot water cylinders connected to the grid via an electricity generation unit, which charges the battery for use later.
The Electricity Distribution Charges may also be listed on your bill and cover the cost of buying new units along with maintenance over time. These costs depend on various factors like technology type, current wattage, etc. Generally speaking, you want these to be as low as possible when finding the best energy offer for your household.
The Cost of Gas Heating & Cooling
Gas heating is relatively common in many households due to its lower initial installation cost and competitive running costs. The average Australian home uses natural gas to heat water, run appliances like ovens, cook food, etc.
Gas is delivered into your home through pipes that are connected to the existing gas network. This means each house has a dedicated meter that runs backward when you draw power from it (in fact, ‘gas heating’ should be thought of as simply another form of electricity use).
These are some common factors to check when looking for the best energy offer in your area.
