The Australian energy market can be confusing – not just due to the variety of retailers competing in the electricity space, but also thanks to the types of plans available.
Two terms you may have seen when comparing plans are ‘standing offer’ and ‘market offer’. In this article, Canstar Blue explains the difference between standing offers and market offers, and how switching from one to another can help cut your energy bills.
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What is an electricity standing offer?
A standard offer is one which is given to customers by default if they don’t engage with the energy market by selecting a new electricity plan. After regulatory changes were introduced in 2019, these offers are officially known as ‘default offers’. Both standing and default offers act as a ‘safety net’ offer and price cap that all energy retailers must legally provide to customers who don’t choose a market offer.
Standing or default offers feature rates that are set by Australia’s energy regulators, so they’re designed to prevent customers from paying unfair prices for electricity. In New South Wales, south-east Queensland and South Australia, the offer is called the Default Market Offer (DMO) and is set by the Australian Energy Regulator. In Victoria, it’s called the Victorian Default Offer (VDO) and is determined by the Essential Services Commission.
The DMO and VDO are set once every 12 months, with each annual offer beginning July 1 in each state. Offer prices will differ across distribution networks, but every energy retailer on each network will offer a default or standing offer plan at the same price. So for example, if you’re on the Ausgrid network in NSW, you’ll pay the same for a standing offer plan from any provider servicing your area, but this may be different than the price you’d pay on the Essential Energy network.
You may be on a default or standing offer if:
- You have never signed up for an electricity contract
- You were previously on an electricity contract that has now expired, but you haven’t moved to a new plan
- You’ve moved to a new address and have stayed with the retailer that was already servicing the property
- You’ve specifically asked for a default offer
Generally, if you’ve been with the same electricity retailer for more than 12 months and haven’t signed a new contract in that time, you may be on a default offer.
The DMO and VDO also serve as a reference price for consumers to easily compare the average annual costs of all electricity plans available in their area.
What is an electricity market offer?
Market offers are energy plans with rates, terms and conditions that are set by the energy retailers themselves. These tend to be more competitive than default offers, and may include discounts and special offers at sign-up.
All energy retailers sell their own market offers, so prices will vary between providers. The downside to market offers is that, unless you’re on a fixed rate plan, prices may change at any time; unlike default offers, rates aren’t locked in for 12 months.
While some market offers may be more expensive than standing or default offers, they’re generally a cheaper option for customers who are happy to shop around.
Compare market energy offers
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Standing offers vs market offers: What’s the difference?
If you’re not on a market offer energy plan, then you’re most likely paying the maximum a retailer can charge you for electricity. Some of the benefits of market offers include discounts, bill credits, competitive rates and other sign-up incentives, none of which are available on a default offer.
This is why households that are currently on a default offer could potentially save hundreds of dollars a year by switching contract types – and you won’t necessarily need to switch energy retailers to do so. But if you’re prepared to do some research, you may be able to save even more by switching from your current default offer to a competing retailer’s market offer.
According to the Australian Energy Regulator (AER), around 10% of households in the market are still on a standard contract. Canstar Blue breaks down each state below, comparing the annual cost of default offers to the cheapest market offers available at time of publication.
Related: How to reduce your power bills
How much can you save in each state?
These tables should be used as a guide only. The DMO and VDO will change on July 1, 2024, so check back after this date for updated savings estimates.
New South Wales
Here are some of the cheapest published deals on our database for NSW. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. See here for further information on the Reference Price, which in this comparison assumes general energy usage of 3911kWh/year, meaning the Reference Price is $1,827/year for a residential customer on a single rate tariff. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Pricing below is subject to change.
| Electricity Retailer | Annual Default Market Offer | Annual Cheapest Market Offer | Annual Savings | |
|---|---|---|---|---|
| EnergyAustralia | $1,827 | $1,299 (Flexi Plan) | $528 | |
| OVO Energy | $1,827 | $1,301 (The One Plan) | $526 | |
| Kogan Energy | $1,827 | $1,326 (Kogan Energy for Current First Members) | $501 | |
| Dodo | $1,827 | $1,339 (Market Offer) | $488 | |
| Powershop | $1,827 | $1,425 (Power House) | $402 | |
| Average | $1,827 | $1,338 | $489 | |
| Basic Plan Information Documents | ||||
*Price assumes general energy usage of 3911kWh/year for a residential customer on a single rate tariff. Estimated price includes any conditional discounts that may be available. Pricing based on Ausgrid network in Sydney, but prices differ between distribution zones. June 2024.
Victoria
Here are the cheapest published deals on our database for VIC. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Plans are listed in order of lowest price first. This comparison assumes general energy usage of 4000kWh/year, meaning the VDO is $1,571/year for a residential customer on a single rate tariff. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Pricing below is subject to change.
| Electricity Retailer | Annual Victorian Default Offer | Annual Cheapest Market Offer | Annual Savings | |
|---|---|---|---|---|
| CovaU | $1,571 | $1,030 (Super Saver) | $541 | |
| Tango | $1,571 | $1,038 (Value Select) | $533 | |
| Lumo Energy | $1,571 | $1,055 (Value) | $516 | |
| EnergyAustralia | $1,571 | $1,062 (Flexi Plan) | $509 | |
| Engie | $1,571 | $1,100 (Engie Blue Perks) | $471 | |
| Average | $1,571 | $1,057 | $514 | |
| Energy Fact Sheets | ||||
~Price assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Estimated price includes any conditional discounts that may be available. Pricing based on Citipower network in Melbourne, but prices will differ between distribution areas. June 2024.
Queensland
Here are the cheapest published deals on our database for SEQ. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Plans are listed in order of lowest price first. This comparison assumes general energy usage of 4613kWh/year, meaning the Reference Price is $1,969/year for a residential customer on a single rate tariff. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Pricing below is subject to change.
| Electricity Retailer | Annual Default Market Offer | Annual Cheapest Market Offer | Annual Savings | |
|---|---|---|---|---|
| OVO Energy | $1,969 | $1,422 (The One Plan) | $547 | |
| Engie | $1,969 | $1,576 (Engie Perks) | $393 | |
| Dodo | $1,969 | $1,605 (Market Offer) | $364 | |
| CovaU | $1,969 | $1,619 (Freedom) | $350 | |
| Ampol Energy | $1,969 | $1,625 (Powering On) | $344 | |
| Average | $1,969 | $1,569 | $399 | |
| Basic Plan Information Documents | ||||
*Price assumes general energy usage of 4613kWh/year for a residential customer on a single rate tariff. Estimated price includes any conditional discounts that may be available. Pricing based on the Energex network in Brisbane. but prices will differ between distributions areas. June 2024.
South Australia
Here are the cheapest published deals on our database for SA. These costs are based on the SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Plans are listed in order of lowest price first. This comparison assumes general energy usage of 4011kWh/year, meaning the Reference Price is $2,279/year for a residential customer on a single rate tariff. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Pricing below is subject to change.
| Electricity Retailer | Annual Default Market Offer | Annual Cheapest Market Offer | Annual Savings | |
|---|---|---|---|---|
| Pacific Blue | $2,279 | $1,743 (Blue First) | $536 | |
| Powershop | $2,279 | $1,858 (Switch Saver) | $421 | |
| Amber | $2,279 | $1,882 (Amber Plan – Variable Wholesale Prices – estimate only) | $397 | |
| OVO Energy | $2,279 | $1,900 (The Free 3 Plan – Free energy between 11am and 2pm everyday) | $379 | |
| Kogan Energy | $2,279 | $1,982 (Kogan Energy For Current First Members) | $297 | |
| Average | $2,279 | $1,873 | $406 | |
| Basic Plan Information Documents | ||||
*Price assumes general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Estimated price includes any conditional discounts that may be available. Pricing based on SA Power network in Adelaide, but prices differ between distribution areas. June 2024.
How can I find the cheapest energy offer?
While market offers tend to be cheaper, not all market offers are created equal. When shopping around for a market contract, there are a few key things to keep an eye out for, such as rates, discounts and benefit periods.
Most retailers will only supply advertised discounts for a ‘benefit period’ of one to two years. After this period expires, customers will need to renew their plan or otherwise be forced to pay much higher rates, usually at the default price respective to their state and distribution network.
One thing to be aware of is that some energy retailers hide higher-than-average usage and supply rates behind seemingly generous discounts. In some cases, market offers may even have higher rates than the retailer’s default offer prices.
Make sure you check the usage and supply rates for any offer you’re considering, in addition to discounts and incentives. You can compare a range of market offers available in your area using Canstar Blue’s free electricity comparison tool.
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