Canstar Blue looks at average fixed and variable electricity rates in New South Wales, Victoria, South East Queensland and South Australia. This article explores whether fixed rate energy plans or variable rate energy plans are better for electricity costs by comparing them on average to see how they might impact your budget.
On this page, you’ll find:
- What is a fixed rate electricity plan?
- What is a variable rate electricity plan?
- Fixed vs variable rate electricity – New South Wales
- Fixed vs variable rate electricity – Victoria
- Fixed vs variable electricity – South East Queensland
- Fixed vs variable rate electricity – South Australia
- Is a fixed rate or variable rate better for electricity costs?
What is a fixed rate electricity plan?
A fixed electricity rate plan is an agreement where your electricity provider will not change energy usage or supply rates for a set period of time, usually one or two years. By guaranteeing today’s rates on electricity for one or two years, customers are protected from any electricity price changes and may find it easier to budget ahead.
Unlike most market offers, fixed rate contracts generally don’t include conditional discounts for paying bills on time, or via direct debit (although there are exceptions). Though there are over 30 electricity retailers in Australia, only a handful offer fixed rate electricity deals, and some may not be available in all areas.
Fixed rate electricity plans are not to be confused with fixed cost energy plans, whereby customers pay the same amount every billing period.
What is a variable rate electricity plan?
Variable rate plans are the standard type of energy deal and are offered by almost all retailers. On a variable rate plan, the electricity company is free to change the usage and supply rates it charges you at any time, provided it gives you notice.
Prices are typically changed every six or 12 months – in January or July depending on where you live. However, many electricity retailers also change their prices outside of these times. Getting the best deal with variable rates will usually require ongoing homework, as providers may frequently tweak plans and rates to stay competitive.
The challenge for consumers is to decide whether there is better long-term value in fixing electricity prices, or staying with variable rates in the hope they don’t increase too much.
Compare electricity plans
Below you’ll find some of the cheapest electricity deals available on Canstar Blue’s database. These plans may be a mixture of both fixed and variable rates. Always read the plan’s energy price fact sheet before signing up.
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.
Fixed vs variable electricity plans in Australia
When the wholesale electricity market is difficult to predict, energy retailers have a habit of removing their fixed rate products.
At the time of writing, EnergyAustralia and GloBird Energy offer fixed rate plans in some areas. Amber also offers fixed rates on its standing offer plans in some states, however these are generally much less competitive than its market offer pricing.
Depending on your location, fixed rate plans could work out cheaper than variable rate deals from the same provider, or even other electricity retailers in the area. To give you an idea of how fixed and variable rate electricity plans can differ, Canstar Blue has compared products from EnergyAustralia in each state below. There may be cheaper fixed or variable rate deals available in your area.
Fixed vs variable rates – New South Wales
EnergyAustralia offers fixed rate plans to New South Wales customers. Canstar Blue has calculated the average fixed rate cost compared to the average variable rate prices from EnergyAustralia (based on the cheapest fixed and variable rate deals available at publication).
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $1,702 | $1,702.3 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 3900kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Ausgrid network in Sydney for a residential customer on a single rate tariff, but prices will differ between distribution areas. November 2024.
Fixed vs variable rates – Victoria
When it comes to Victoria, we’ve compared EnergyAustralia’s fixed rate and variable rate plans to work which contract type is cheapest. Again, Canstar Blue calculated the averages from EnergyAustralia’s cheapest fixed and variable rate plans.
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $1,340 | $1,413.25 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Citipower network in Melbourne for a residential customer on a single rate tariff, but prices will differ between distribution areas. November 2024.
Fixed vs variable rates – South East Queensland
EnergyAustralia currently offers fixed rate energy plans in South East Queensland. Canstar Blue has calculated the average fixed and variable rate prices from EnergyAustralia, based on the cheapest plans from the retailer in our database.
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $2,005 | $2,032.3 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 4600kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Energex network in Brisbane for a residential customer on a single rate tariff, but prices will differ between distribution areas. November 2024.
Fixed vs variable rates – South Australia
South Australians pay more for electricity than anyone else in the country, so does a fixed rate energy plan offer any escape? EnergyAustralia currently offers fixed rates in South Australia. Below is how EnergyAustralia’s fixed rate price compares to its variable rates (using its cheapest fixed and variable rate plans).
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $2,208 | $2,178 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on SA Power network in Adelaide for a residential customer on a single rate tariff, but prices will differ between distribution areas. November 2024.
Is a fixed rate or variable rate better for electricity costs?
Fixed rate energy deals are most beneficial for consumers who want a little more certainty over what they can expect to pay for electricity. And if you’ve found a fixed rate product that’s cheaper than many variable options, locking in a competitive price seems like a smart move.
However, there is no guaranteed right or wrong answer, as it’s impossible to predict whether fixed or variable rates will work out cheaper long-term. At the end of the day, the decision between fixed or variable rates could depend on what type of energy customer you are:
- You may want to choose a fixed rate plan if you don’t like the idea of regularly switching electricity providers and prefer a ‘set and forget’ approach to energy. Fixed rate contracts are likely to work out cheaper than sticking with a variable rate deal where the conditional discount has expired. Again, just be mindful that rates are usually only fixed for a benefit period of 12 or 24 months, so be sure to check in from time to time.
- You may want to choose a variable rate plan if you are happy to frequently change energy providers to find the best deal on electricity. Chasing the cheapest variable rates may prove the cheapest bet.
Make sure you understand your electricity usage and have considered your energy needs prior to looking for better deals, as understanding the specifics will help you avoid paying for more than you need.
Original reporting by Kelseigh Wrigley
Image Source: Urbans/Shutterstock
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