Whether it's inertia or misplaced loyalty, millions of electricity customers are paying more than they need to.

Households that haven't switched electricity plans in recent years are being penalised for their loyalty, an analysis by the Australian Competition and Consumer Commission (ACCC) has revealed.

Energy customers on offers more than three years old are, on average, paying $221 more than customers on new plans, the ACCC's latest National Electricity Market report shows.

The cost of loyalty differs from state to state though, with longer-term customers forking out as much as $408 more in South Australia and $303 in New South Wales.

"Loyalty penalties are alive and well in the retail electricity market, so the very best thing people can do to save money is to switch plans - either moving to a cheaper plan offered by their existing retailer or changing retailers," says ACCC commissioner, Anna Brakey.

Overall, the consumer watchdog found that more than a third of residential users (roughly 2.5 million customers) are paying a default market offer price for their electricity, or higher.

Encouragingly though, the share of households receiving the best offer available from their electricity retailer grew from 19.3% in the 2024 calendar year to 26.7% in the 2024/25 financial year.

And given that electricity the government's energy rebates have recently ended, Brakey suggests that switching to a cheaper offer could soften the blow for some customers.

"Many households could effectively replicate the value of the recently ended government rebates by changing plans," she says.

How to find a better electricity deal

So how can households make sense of their current electricity offer and assess other plans with the view to getting a better deal? Here are a few steps worth considering.

1. Check your current plan

One place to start is by seeing how your existing electricity plan compares to other plans from your provider.

As Brakey notes, retailers are actually obliged to regularly provide this information to their customers.

"Roughly every three months, retailers have to prominently disclose on the first page of electricity bills the potential savings for customers from changing to their cheapest plan.

"We would strongly encourage households to, at the very least, look at their electricity bill to see how much they could save."

Of course, anyone who doesn't have a copy of their latest energy bill handy can always get in contact with their retailer to ask outright.

2. Compare offers from other retailers

In the same way you would compare different lenders in search for a cheaper mortgage, it makes sense to compare multiple energy retailers when looking for a better-value electricity plan.

The good news is that, depending on your location, there's likely to be a variety of retailers big and small to compare.

"A silver lining to the dark cloud of higher electricity prices is that there is a wide array of different offers out there and the prices vary significantly, which indicates that competition is working," Brakey says.

When it comes to comparing plans, households can make use of the government's Energy Made Easy comparison tool or one of the many comparison websites.

3. Look at features beyond price

While cost may be the top priority for many, other features such as a plan's contract length, what the solar feed-in tariff is and whether it offers a single rate or a time-of-use tariff, may all be relevant.

It's also worth assessing any concessions (e.g. for seniors and low-income households) or discounts (e.g. for paying on time) that you may be eligible for.

Electricity bills: Frequently asked questions

1. What is a default offer?

The Default Market Offer (DMO) is a reference price set by the Australian Energy Regulator for electricity in New South Wales, South Australia and South East Queensland. It's designed to act as a safeguard for customers against excessive prices and as a baseline which they can use to compare their own plans to.

2. What are peak and off-peak periods?

Some plans charge different amounts for electricity consumption at different point during the day. For instance, electricity use during peak periods (e.g. 4-8pm) is more expensive than during shoulder or off-peak periods.

3. What are single rate and time-of-use tariffs?

Electricity plans with a single rate tariff charge the same rate for usage throughout the day, whereas plans with time-of-use tariffs have different rates for peak, off-peak and shoulder periods during the day.

4. What is a solar feed-in tariff?

A solar feed-in tariff is the rate of payment or amount of credit a customer will receive for any unused energy produced by their solar panels which goes back to the grid.

5. What are smart meters?

Smart meters are digital devices that measure household electricity usage in real-time and can send data to electricity providers.

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