Prepaid energy plans explained

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Australians are no strangers to energy plan bill shock, but what if there was a way to avoid the surprise sky-high bills by paying for electricity in advance? Prepaid electricity isn’t common in Australia, but still exists as an option for customers in selected states. Canstar Blue explains how prepaid energy plans work, which energy providers offer them, and how prepaid electricity meters work.

What are prepaid energy plans?

Prepaid energy plans allow households to pay for their electricity use upfront. Rather than receiving a bill for your energy use at the end of each month or quarter, you’ll pay for your power ahead of time. The idea of prepaid energy is to remove the bill shock that comes at the end of a billing cycle, and make it easier for households to budget their energy costs.

Prepaid plans work by allowing customers to estimate and pay for how much energy they’re likely to use. This may be based on a customer’s past usage, or on the average across households of a similar size.

Depending on the provider or prepaid product, any unused electricity may roll over to the next billing period. However, if a customer goes over their prepaid allowance, they may need to pay for this excess usage later – and possibly at a higher rate.

What energy providers have prepaid plans?

There is currently only one mainstream electricity provider offering a form of prepaid energy in New South Wales, Victoria, South East Queensland and South Australia. Powershop offers prepaid plans in addition to what might be described as ‘traditional’ contracts.

Powershop

Powershop is arguably the go-to for prepaid energy, having started the trend with its Powerpacks in 2016. Since then, the retailer has changed its billing model to a more traditional approach. However, its optional, pay-as-you-go Powerpacks are still available, and customers can add these to their accounts through the Powershop app at any time.

Powerpacks allow customers to pre-pay for both electricity and gas. There are multiple Powerpack types available, including:

• Top Up Pack: Standard electricity or gas credits, where the value you pay equals the value of the credit. You can pay as much as you like off your bill, as often as you like.
• Future Powerpack: These offer extra credit for future energy usage when available: for example, buy a $30 Future Powerpack in June to receive $35 of credit in July.
• GreenPower Powerpack: Used to purchase 100% GreenPower accredited certified renewable energy only.
• Special offer/reward Powerpacks: Available periodically, these are limited time Powerpacks with extra credit or offers.

Depending on the Powerpack you choose, you may have access to credit for your current or a future energy billing period. To see what Powerpacks are available on your plan, log into the Powershop app or your account through the Powershop website.

Powershop prices

Prepaid electricity meters

Some regions in Australia, including the Northern Territory, have access to prepaid electricity meters. Providers such as Jacana Energy allow customers to pre-purchase electricity which is then activated through the use of an applicable swipe card. The swipe cards receive top-ups that can be done online on the Jacana Energy website or in store at a participating shop (the full retailer list can be found here). If you move to a new property that has a prepaid meter, you will need to contact Jacana Energy to enquire about your swipe card.

Further information can be found by visiting your electricity retailer’s website.

Are there any alternatives to prepaid electricity plans in Australia?

If you’re looking for a way to make electricity bills more manageable, you may want to consider energy bill smoothing. This allows customers to make smaller, regular payments throughout their billing cycle, rather than paying one lump sum each quarter. Customers will typically pay an estimated bill cost based on prior usage, or on the average energy used by similar-sized households.

Bill smoothing can help take the guesswork out of paying for electricity, especially for customers on a budget. It’s offered by most of the big energy retailers, including Origin, AGL and EnergyAustralia, and could be a good option for customers wanting to better manage their bills – although you’ll still need to compare plans to find the best deal.

Retired prepaid electricity deals

ReAmped Energy

ReAmped Energy was best known for its attempts to be the cheapest power option in each state it operated in. However, in March 2024 ReAmped surrendered its electricity retailer authorisation and no longer operates.

Until that time, ReAmped Energy adjusted its prices in competition with other retailers before venturing into the world of prepaid energy, offering its best rates for the commitment of paying two weeks in advance for electricity. On the ReAmped Advance plan, customers in New South Wales, Queensland and South Australia could pay an amount estimated by the electricity retailer in line with other households of the same demographic in their area.

Elysian Energy

Until mid 2021, Elysian Energy offered four pre-paid, fixed-rate plans in Victoria, NSW, QLD and SA. Depending on how many people lived in your household and how much energy you used, Elysian suggested a plan that it believes suited your needs. If you didn’t use all of the electricity within it, it would roll over until the next month, and if you needed more, you’d be charged a reasonable rate for the excess power used.

The four plans available from Elysian were called: The Minimalist, A New Chapter, The Good Life and The House, which included 200kWh, 400kWh, 800kWh and 1200kWh of electricity for the month consecutively. There was less wiggle room in choosing what plan you were on, and Elysian would only downsize your plan when you used 25% less energy than the plan you were on, and upsized when you used 10% more than the next size plan.

AGL

In 2019, ‘big three’ energy giant AGL launched a prepaid electricity plan to Victorian customers with smart meters. The basis of this plan was that customers were rewarded with bill credits that increased with how much power they purchased ahead of time. Rather than purchasing a certain amount of energy you think suited your needs, AGL allowed the customer to pay a set price upfront, whether that be $50, $80, $100, $130 or $240, to which variable standard rates applied. To say thanks for paying in advance, you could expect to receive a bonus credit amount of between $10 and $80, again depending on the size of your plan.

AGL encouraged customers to use the AGL Energy App, where you could track how much energy you were using. But if you weren’t interested in tracking, you could also receive SMS and email alerts when close to your credit limit. If you happened to miss this deadline, the good news was that you wouldn’t be cut off from your electricity supply, rather you’d pay the standard rates without the bill credit discount. This plan was available for 12 months and had no exit fees.

Amaysim Energy

Before the dissolution of the Amaysim Energy brand, it had subscription-based power plans in Victoria, first in April 2019. It joined the rank of retailers claiming to ‘simplify’ the energy industry and remove bill shock. Customers who went with Amaysim Energy chose between three power packs which differed in size based on the amount of people in their household (i.e. how much power they were subsequently likely to use).

Unlike Powershop, this amount wasn’t tailored to usage, but since customers would pay month-to-month, it was assumed they would be able to get a good idea of how much they really needed if the recommendations set by the provider were too modest/generous. With the Amaysim Energy app, customers could also monitor energy usage and ‘top-up’ their plan in the event the prepaid allowance didn’t meet their needs. There were no lock-in contracts, and households could buy energy on a month-to-month basis.

Are prepaid energy plans the best way to save on electricity?

While it’s fair to say that eliminating bill shock is in the best interests of Australian customers, whether or not prepaid electricity plans are the best avenue to achieve this goal remains subjective.

If you’re on a strict budget and are willing to monitor your energy to make sure you don’t go over what’s included in your plan amount, a prepaid energy plan could be a great option for you. That way, you’ll pay a price upfront, use the amount of energy specified in your agreement, and rinse and repeat. But keep in mind that – unlike a prepaid phone plan – you won’t be cut off for going over the amount you were designated. Rather, you may pay a higher rate for the excess power you use.

So, if you’re not the type to pay attention to your energy usage, you could end up paying a lot more than you first intended, which means you may find a straight-shooting low rate plan could work out to be the better option for you. Pick from a range of electricity plans available in your area by with the Canstar Blue comparison tool below.

Original reporting by Monika Gudova
Image Source: CaptaiN JoE ProductionS/Shutterstock