If you notice your energy bills creeping up or figure the service just isn’t too great, there’s an easy solution to that; make a switch! Yes, consumers in some states can switch their electricity providers quickly and easily owing to the abundance of providers and increasing competition in the energy market. Let’s dig into some reasons you should consider switching electric providers.
In this article, we’ll go over:
- What Does Switching Providers Mean?
- Reasons to Switch Electric Providers
- When Should You Switch?
- FAQs
What Does Switching Electric Providers Mean?
Let’s start by exploring what exactly it means to switch electric providers. The electricity you receive at your house or business is provided by a company that many of us assume is our only supplier choice.
This single company could either be your local utility or a supplier.
- The utility is an entity that brings energy to your residential or commercial building. You don’t have a choice when it comes to utility. It’s typically the public utility company operating in your municipality. The utility company also owns and maintains the infrastructure, i.e., the wires and poles.
- The energy supplier offers several rate plans for electricity or natural gas and bills you monthly for the energy you consume. It offers attractive packages that can help consumers save up on their energy costs. Households and businesses have the choice to choose their energy provider in all the deregulated states of the U.S.
When you “switch energy,” you simply cancel your existing energy plan with your current provider and sign up with a new supplier. You have complete freedom to choose your new energy provider.
Switching electricity suppliers has many perks. You can take advantage of promotional incentives such as lower energy prices, different rate plans, and energy options.
Reasons to Switch Electricity Providers
Here are the top reasons why you should switch electric suppliers:
1. Savings
The most common reason for switching electric suppliers is the opportunity to save money. Rightly so, when you switch to a new plan with a cheaper electricity rate, it translates into a lower monthly electric bill.
Most electric companies offer big discounts to new customers for the first 12 months of service. But when this period ends you will automatically shift to the energy company’s standard rate, which typically is pretty expensive. The same goes for fixed, one-year or two-year deals. If you haven’t switched your electricity supplier in a while, you are likely paying the standard rate.
By switching to a new provider, you can save substantial money with their low introductory rates. Many companies allow you to compare electricity plans on their websites to gauge how much you will save. You simply enter your recent kWh usage and see which deal is best for you.
2. Better Customer Service
Providing a good rate is not everything. Energy providers sometimes fall short on their customer support. Such issues are common when you go for energy suppliers who offer exceptionally low rates.
You might need to contact your electric provider from time to time for queries or complaints. And it is possible that you end up being put on hold for half an hour or have a bad experience with the support staff. Or maybe you experience problems like improper direct debit amounts, inaccurate invoicing, and overall inadequate responses to problems.
Switching to a better electric provider could satisfy such concerns, you can enjoy smoother customer service and transparent billing. So a switch to a new provider with a better customer service ethic could help.
Also, make sure that you check how user-friendly their website is. Many sites have automated help that can solve your basic queries in a matter of seconds.
3. It’s Hassle-Free
Making a switch from one electric provider to another is pretty straightforward. You can use a comparison website where you fill in your current provider, account number, and other information, along with the energy consumption from your bill. Compare rates, understand how they bill, and make the switch using these online resources.
Such sites also have enrollment forms that make things simpler. They ask you how you currently pay your electric bills, your up-to-date meter reading, zip code, and your preferred method of payment with the new supplier.
This only takes a few minutes, and once you’ve chosen your new provider, the switch will take no more than 15 working days. You won’t have to do anything, as all the legwork is done by your new supplier. It’s the same meter and the same energy quality. You’ll just pay a different company for it now.
Also, you don’t lose supply or suffer electric service interruptions for even a moment. You’ll get your final bill from your old provider within six weeks of the switch.
4. Going Green
Many energy providers are now offering “green tariffs” that provide energy sourced only from renewables such as solar power or wind. Such measures greatly help the environment by reducing carbon emissions.
If you are environmentally conscious, this is an excellent reason to switch from one supplier to another. However, you need to know that the definition of “green” varies among different providers.
- Some providers promise to offset your energy usage by planting enough trees that can absorb the emissions.
- Some promise to give back your electricity usage in equivalent renewable energy to the National Grid.
- Some companies offer renewable energy plans where it’s actually just 15% of energy from renewables and the rest comes from non-renewable energy sources like coal or natural gas.
To make sure what you’re signing up for, check the green credentials of the providers on their website. Find the fuel mix disclosure that clearly indicates the sources of energy and the amount it supplies to the grid.
Also, opting for a green energy tariff will not only benefit the environment but will prove cost-effective for you. People are becoming more aware of their impact on the planet, which increases demand and competition, and in turn, you get to have cheaper green deals.
5. Better Energy Plans
Energy plans are different and slightly more complicated to understand than energy prices. When you’re comparing electricity rates, you simply have to pick the least expensive option. But when it comes to energy plans, you get three different options:
- Fixed-Rate Plans: This is the simplest type. You are charged a single price per kilowatt-hour of electricity you use. This goes on for the complete duration of your contract. It’s perfect if you wish to avoid fluctuations in your bill every month.
- Variable-Rate Plans: These plans charge a different rate per kilowatt-hour that varies according to the market conditions. You might pay a lower amount than a fixed-rate plan when times are good, or your rate might be higher when demand peaks and energy supply is restricted.
- Indexed-Rate Plans: Indexed rate plans tie your kilowatt-hour rate to a commodity market index. This is the most complex type and has a risk of potential price hikes, hence it’s only a good option for people with solid knowledge of how energy markets work.
6. It’s Free
Switching your electric provider won’t cost you a penny. There are no hidden costs, obligations, or catches.
Your old provider may charge an early termination fee if you make the swap before your contract expires. Confirm the cancellation charges, if any, and decide accordingly.
That said, you may still save money if you pay a cancellation fee to end a long-term contract.
7. Technological Edge
Smart businesses incorporate technology to help their customers save time and money. Switching to such energy companies that use the correct technology, such as smart metering, will save you cash and time.
Smart meters record your electricity usage precisely and relay that information to the provider, which is better and more accurate than manual readings. Technology helps to streamline processes and get reliable readings for a better experience.
What’s The Best Time to Switch Electric Providers?
Here are a few ways to know it might be time to switch suppliers:
Your Current Deal is Expiring
Energy plans usually last for 12 months. The best time to switch your electricity provider is when it’s the end of your discounted plan or, if you’re on a standard energy plan, when you find a cheaper tariff.
There’s normally a cancellation fee that you have to pay in case you’re leaving your contract earlier than the date it ends. It’s a good idea to start searching for other options a couple of months before your current deal expires.
It’s Been a Year Since You Switched
Electric providers may change their rates and plan any time of the year. So, if it has been a while since you changed your energy plans, you may want to comparison shop every so often just so you don’t end up paying more than you should.
This also applies to homeowners, businesses, or renters on an introductory rate. Suppliers offer incentives to their new customers for short-term or one-time deals, such as a lower initial rate or one month free. You should change the supplier before your introductory rate ends and the provider raises prices.
Before It Starts Getting Cold
Typically, electric suppliers tend to increase their prices in the winter months because energy demand spikes at this time of the year. Everyone has to put on their central heat to stay warm.
So, summer is the perfect time to switch your energy provider and find better deals to have a peaceful, cozy winter ahead.
Lifestyle Changes
If you have made certain changes in your life that could impact your electricity usage, then it might be time to rethink your energy plan too. This could mean a new work schedule, becoming a stay-at-home parent, or working from home. Or, maybe you’re watching more TV than before, or are you running the dishwasher or washing machine at different hours?
The time that you use electricity is also important because some rate plans offer free or discounted weekend or night electricity. Such plans can save you tons of money if you use most of your energy during the free or discounted hours. So you might want to look around for such plans if there’s a new lifestyle change.
Frequently Asked Questions
You can switch energy providers in a few easy steps. Here’s a quick checklist:
• Review your current plan’s exit fee and take stock of what you have to pay (in case you’re being charged a termination fee).
• Make sure you’ve paid all outstanding bills.
• Understand and determine your electricity usage pattern before comparing different companies.
• Compare different electric plans online, and pick a provider that offers the best mix of rates and services and also aligns with your usage habits.
• Select the plan, and lock in your switch online or via phone.
If you’re a tenant and pay a supplier directly for your energy, then yes, you can easily switch your provider.
The switch should take no more than 21 days. This also includes the statutory 14-day “cooling-off” period where you can change your mind if you need to.
Main Photo by: Cory Doctorow / Flickr / CC BY-SA 2.0
