The energy market is traversing through tremendous volatility right now. Increased prices and reduced supply due to geopolitical factors have led governments to step in with subsidies and other measures to keep energy costs in control for households and businesses.
Yet there are risks associated with these subsidies. Governments are already in debt, which may put them at risk if the economy falters or if oil prices fall again. If you’re a consumer, you may also be exposed to this risk because you rely on government subsidies and would not be able to afford your energy bills without them.
As a consumer, if you rely on energy and gas discounts, you are quite likely to choose the wrong plan for yourself.
Three reasons why huge discounts do more harm than good
Getting huge discounts on energy plans may seem like a deal you should not miss. But there is more to it than what meets the eye.
You may be disappointed if you choose an energy plan just because of the high discount rate.
Let’s look at three reasons why discounts on electricity and gas plans can be misleading.
1. Discounts are initial offers.
When you sign up for a new service, you’re often offered a discount if you agree to stay with them for a certain period, but if the price goes up after that period ends, the discount holds no validity. It might even be more expensive!
Sometimes electricity and gas retailers reduce or eliminate their discounts after they sense they’ve gained enough new customers and no longer offer incentives to attract more customers.
2. Sometimes discounts are conditional.
Consumers need to read the terms and conditions of electricity and gas plans. Discounts are conditional depending on the criteria of paying the bill on time, receiving paper bills, or paying by direct debit. You could be charged higher energy prices if you forget to pay the bill. Make sure you know all the terms and conditions before signing up for a new plan.
3. Taking advantage of consumer psychology
Comprehending which one is right for you is difficult with so many plans available in the market. It’s not hard to see why the electricity and gas market is so confusing.
Consumers are too busy to switch. Electricity and gas retailers know that people are busy, and that’s why many of them offer plans with significant discounts. The majority of consumers find a comparison of alternative gas plans confusing and time-consuming task.
Many consumers remain in the same plan even after their prices have risen significantly and the initial discounts have been substantially reduced or removed.
The most important thing to remember when comparing energy plans is that you’re not comparing apple to apple. Your current electricity and gas bills are based on a combination of factors, including the utility’s rates, your usage history, and the type of rates you pay.
When comparing the cost of an alternative plan, it’s essential to consider all these factors to get an accurate picture of how much money you’ll be actually saving.
If you’re looking for competitive prices, manageable online bills, customer support, and a simple sign-up process, look no further than Select and Switch. The gas plan comparison tool included with the Select & Switch can help you choose and compare energy plans in your area.