Guaranteed Energy Discounts Explained

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There’s nothing quite like the comfort of a guarantee, whether it comes in the form of an engagement ring, or just an order confirmation email from the pizza place down the road.

So, when it comes to ‘guaranteed’ or ‘unconditional’ discounts on your energy bills, where big savings could potentially be had, there’s nothing better, right? Find out the answer to this and everything else you’ve been wondering about unconditional energy discounts below.

What is a guaranteed energy discount?

It’s all in the name – an unconditional energy discount is simply a discount on your electricity or gas bill that isn’t conditional on any other factors. What this means is that you’ll receive a discount on your power bill regardless of how or when you pay.

This form of energy discount grew in popularity after the implementation of the Reference Price in July 2019, with some tier one retailers using this discount to provide customers with more value on their electricity. More often than not, however, your unconditional discount will apply for a benefit period of one or two years, so it’s best to think of it as an introductory offer rather than a permanent solution to high power bills.

Are ‘unconditional’ and ‘guaranteed’ discounts the same?

The short answer is yes. Consumers might see one or the other referenced on their bill, but they essentially mean the same. Recent energy regulation changes have swayed toward favouring the word ‘unconditional’ in marketing energy plans, but some retailers are still using the term ‘guaranteed’. Remember that if you have any confusion as to what the words on your power contract mean, it’s best to contact your retailer for clarification.

What’s the point of a guaranteed energy discount?

While conditional discounts (such as pay on time discounts) seem to make sense as energy companies benefit from consumer tardiness or inattention (i.e. you fail to pay on time, you end up paying more), what might not add up is why an energy provider would offer an unconditional discount in the first place.

As mentioned before, energy discounts work by way of being available for a short period of time, (typically just a year or two) meaning any offer that seems too good to be true might actually be. If it were the case that unconditional energy discounts were ongoing, it would make sense for energy providers to simply lower their base pricing and deliver the same savings, but since they often come with benefit periods, it’s best to consider them as welcome offers, not a lower overall rate.

Guaranteed vs. Pay On Time Discounts

Although you’re likely to see pay on time discounts at the end of the fishing rod more than you will find unconditional discounts, switching to a plan with a pay on time discount won’t always be the best way to save money.

A pay on time discount will only be applied to your energy bill if you do exactly what the title suggests – pay on time. If for example you’re on a plan offering a 25% pay on time discount, but miss the bill due date, you’ll have to pay the full amount. Alternatively, if you’re on a plan with a 15% unconditional discount, you’ll receive the discount even if you pay a few days late. In that cycle, having an unconditional discount works out more beneficial than a pay on time discount.

If you are, however, the type to stay on top of your bills, a pay on time discount could help you save hundreds on your power bill in the year.

What other energy discounts are there?

You’ll be happy to know that there are other types of energy discounts available for those looking to save on their energy. Here are two other discounts you are likely to come across when comparing energy deals:

• Direct debit discount: One easy way to see savings on your power bill is through direct debiting. What this means is that at the end of your billing period, however much you have due will be taken straight out of your bank account and payed to your energy provider. As a reward for this convenience, you could receive a discount on your bill.
• Email billing discount: Gone are the days of paper billing, and if you’re tech savvy in the slightest, you could benefit by simply having your energy bill sent directly to your email inbox. This discount is often modest and applied to a benefit period.

Do I have a guaranteed/unconditional or conditional energy discount?

Energy discounts are confusing, and if you’re scratching your head wondering if your discount is unconditional or conditional, rest easy knowing there’s an easy way to check.

All of the details about how you’re charged for your energy should be listed on your last or current power bill. There’s no stock standard electricity bill, so where you’ll find this information will differ from provider to provider.

Which providers offer guaranteed energy discounts?

Unconditional energy discounts aren’t as frequently seen as their pay on time counterparts. However, there are still lots of providers offering the discount on select plans. Here are the providers offering unconditional energy discounts within New South Wales, Victoria, south-east Queensland, South Australia and the Australian Capital Territory:

• EnergyAustralia
• Simply Energy
• 1st Energy

In a deregulated energy market, providers have the power to change discount amounts and terms as frequently as they want to, meaning the list above is also subject to change.

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Will a guaranteed discount deliver me the best savings?

In recent times, energy discounts and their ultimate value have become a hot topic. While they can be a great way to save on your energy bills, lack of transparency in the energy market has caused some major providers to remove their discounts all together, opting instead to reduce their rates to deliver the best power savings.

After the regulation change, it was mainly Australia’s big three electricity providers, Origin, AGL and EnergyAustralia, that opted for unconditional discounts on some of their flagship products, rather than making big rate cuts. Whilst this may deliver savings within the benefit period, it’s important to remember that most unconditional discounts will only be applied for a year or two, at which point it’s important to shop around.

At the end of the day, a great energy deal will ideally have a low base rate and solid discounts, so keeping an eye out for that will deliver you the best savings.

Is a guaranteed energy discount right for me?

Whether an unconditional energy discount is right for you will ultimately come down to your personal habits. If you’re the forgetful type and are likely to miss a bill or cancel your direct debiting, a conditional discount might not be right for you. A discount that is set in stone will likely be a better option than a conditional discount in this situation, so weigh up the pros and cons and decide what is right for you.

Once you’ve made a decision, all that’s left to do is start comparing. Hit the button below to get started.

Original Author: Jared Mullane