Having High Electricity bills? Here's 10 Ways to Save on Energy

Australians have been hit with several years' worth of hefty energy bill increases, which have made power prices a leading concern in household budgets.
Last modified: 29th May 2024
William Jolly  |  

Amid an already sky-high cost of living, The Australian Energy Regulator (AER) released its Default Market Offer (DMO) in March. This DMO determines the standard price of an electricity plan in South Australia, New South Wales, and South-East Queensland.

While some standard electricity prices are set to go down slightly in 2024/25 for residential households, they’re still way up over the past couple of years after substantial increases in 2023/24:

State

2023/24

2024/25

New South Wales

21 - 22%

-1.9% - 3%

Queensland

19.5%

+2.9%

South Australia

21 - 22%

-2.5%

Source: Australian Energy Regulator (AER).

“We know that economic conditions have put pressure on many Australians and the increases in electricity prices over the last two years has made energy less affordable for many households. In light of this, the AER has, in this decision, placed increased weight on protecting consumers. ” AER Chair Clare Savage said.

Meanwhile, in Victoria, the Essential Services Commission (ESC) released its own decision in March 2024, stating that the typical electricity bill for residential customers would decrease by around 6.4% ($112 per year).

While that is undoubtedly a good thing, the typical household electricity bill went up by around $426 the previous year, about 30%!

However, it’s essential to know that these default offers are typical household bills, but they don’t have to be yours. Even during this current energy crisis, you still have the power to make plenty of savings.

To help you cut down your costs and avoid getting stung with a significant increase this year, here are the top 10 ways you can save money on your electricity bills.

  1. Check your air-con use.
  2. Lower your air-con’s temperature.
  3. Upgrade old appliances if you can.
  4. Beware of ‘standby’ power use.
  5. Wash your clothes in cold water and avoid the dryer.
  6. Install energy-efficient lights.
  7. Improve your home’s insulation.
  8. Limit your water usage.
  9. Use your solar system more efficiently (if you have solar).
  10. Compare and switch energy plans frequently.

Where are the most significant energy savings found?

Before we get started on the ten tips, knowing exactly what in your house is using the most energy is helpful. This could help you prioritise your energy savings if you can’t do each of the tips recommended below:

According to Sustainability Victoria, the breakdown of running costs in the typical Australian home is as follows:

  • Heating: 38%
  • Water heating: 15%
  • Refrigeration: 11%
  • Home entertainment: 7%
  • Lighting: 6%
  • Cooking: 5%
  • Cooling: 4%
  • Dishwashers: 2%
  • Washing machines and dryers: 2%
Energy at home infographic
Source: Sustainability Victoria, 2021.

Average Australian electricity bill by state

According to Canstar Blue, the following table contains the average quarterly electricity bill in each Australian state/territory as of January 2024.

Average Australian gas bill by state

Based on the data below from Finder, New South Wales pays the most for gas, with WA residents again winning out in the cheap energy stakes.

Energy savings tip #1: Check your air-con use.

Did you know that running the air conditioner can make up as much as half of the typical household’s energy bills during summer in Australia? While the cost of your air conditioner will depend on the make and model, how old it is, its condition, and your usage patterns, Choice found that the air conditioner alone costs between $286 and $586 per year to run. And that was before electricity prices spiked in 2022!

Given the high temperatures we regularly see in Australia, this article isn’t going to tell you not to use your aircon at all. But reducing how much you use it can make a noticeable difference to your energy bills.

The following tips can help ensure you get the most out of the aircon you do use:

  • Keep all windows and doors closed when using it;
  • Keep all windows and doors open if you’re not using it;
  • Minimise the area you need to cool by shutting the door to your room and turning it to a low setting. If you have ducted aircon, shut off some of the other cooling zones if you’re not using them;
  • Try using fans instead if you can, as they use considerably less power;
  • Always turn your aircon off if you aren’t in the room or aren’t home;
  • Use a timer or ‘sleep mode’ at night so it isn’t constantly running;
  • Clean air filters regularly and have your air conditioner serviced in line with the manufacturer’s instructions.

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Energy savings tip #2: Lower or raise your air-con’s temperature.

Another air conditioner tip that deserves its own section is to set it to the optimal temperature. According to Energy.gov.au, every degree higher can save between 5-10% on energy use.

Even though you might disagree, the ideal energy efficiency temperature should be between 25 and 27°C. If that’s too high, 22-24°C is also acceptable.

Energy savings tip #3: Upgrade old appliances if you can.

Household appliances, including refrigeration and cooking, use around 33% of all energy in the average Australian home (the fridge alone uses 11%!). Newer appliances are generally much more energy-efficient than older ones. For example, a fridge from 1992 will use almost three times as much energy as a new one, while a dishwasher from just ten years ago is 25% less efficient.

Energy Consumers Australia also says that every extra star rating will save:

  • 30% on dishwashers,
  • 25% on washing machines and clothes dryers, and 
  • 20% on TVs.

These old appliances are an energy bill killer because even though they might appear to be working fine, they’re actually gobbling up power without you realising it. So while upgrading these old appliances that served you well over the years can be expensive, you can quickly recover the initial outlay in the form of smaller energy bills.

Most states and territories have specific programs to assist people in upgrading their old appliances, and vulnerable Australians can use the No Interest Loan Scheme (NILS).

Need funds to upgrade some ancient appliances? Check out our White Goods Loans to see if they can help!

Energy savings tip #4: Beware of ‘standby’ power.

Besides fridges and freezers, which you need to keep on, consider turning off your appliances at the wall. Many appliances continue to use energy, called' standby' mode, even when you’ve hit the off button or you’re not using them.

According to Choice, switching your appliances off at the wall can use up to 10% less energy. Flick the switch on your TVs, computers, electronics, washing machines and anything else you’re not immediately using and turn them back on when you are.

Energy savings tip #5: Wash your clothes in cold water and avoid the dryer.

Australia is the sunniest continent on Earth. So it doesn’t make much sense to put your clothes in the dryer on a sunny day when you could hang them up. Unless you live in a tiny apartment with no room, letting your clothes dry in natural sunlight can save you roughly 44 cents for each load of washing. That’s about $100 per year!

Another easy way to use less energy when washing your clothes is to use a cold water wash. As 80–90% of the energy a washing machine uses goes toward heating the water, using cold water (which has a negligible effect on how clean your clothes are) is a no-brainer.

‘Hot’ tip: Your washing machine should have an energy rating of at least 3.5 stars. The water star rating should be at least 4.

Energy savings tip #6: Install energy-efficient lights.

If your home still uses old halogen or incandescent lightbulbs, you could be draining money on lighting alone. LED bulbs reportedly last about five to ten times longer and use as much as 75% less energy.

According to Energy.gov.au, the payback period for replacing old lightbulbs with LEDs (the time it takes to recoup the cost through savings) is less than one year. Even more impressive is that replacing ten halogen lightbulbs with LEDs could save more than $650 in 10 years.

While using as much natural light as possible is ideal, replacing your lightbulbs with more efficient ones is one the most effective ways to save on electricity relative to the cost and effort needed.

Energy savings tip #7: Improve your home’s insulation.

Proper insulation - how well your home retains heat - is one of the cornerstones of an energy-efficient home. A well-insulated home means less heat passes through the materials and reduces the need to cool or heat them artificially.

According to Sustainability Victoria, a fully insulated home, compared to a non-insulated one, can reduce the cost of heating and cooling by around 40% to 50%! Ceiling insulation alone can lower your heating and cooling bills by 20%!

Even though it sounds like a lot, improving your home’s insulation is a relatively simple and inexpensive job for any tradie.

A home improvement loan with Jacaranda could provide fixed repayments to cover the cost of improving your home’s insulation.

Energy savings tip #8: Limit your water usage.

Looking at that breakdown of running costs in the home, you can see that ‘water heating’ is the second biggest energy consumer behind heating, accounting for 15% of the typical household’s energy use. According to Canstar Blue research, the average quarterly water bill for households as of January 2024 is $217:

State

Average Quarterly Water Bill

 

Victoria

$208

New South Wales

$216

Western Australia

$233

South Australia

$200

Queensland

$235

Northern Territory

$180

Tasmania

$200

Source: Canstar Blue

Your water could be heated by either an electric, gas, solar or heat pump system, so the amount you can save by cutting down on your water use will vary. However, doing the following will likely lead to significant savings on your water bill:

  • Upgrade to water-efficient appliances: By using more water-efficient products, Australians could save an average of $175 per household annually.
  • Take shorter showers: Cutting your shower time down from the standard eight minutes to four or five minutes could save 20%.
  • Get a more efficient showerhead: Flow rates for showers are on the water rating label in litres per minute (L/min). Every 1L/min difference will save a family of 4 at least $35 annually. A 5-star shower at 6L/min will save $315 yearly on water bills.
  • Fill up your dishwasher: Use less hot water by running it only when it's full rather than many smaller loads. If you don’t have a dishwasher, don’t leave the water running when washing your dishes by hand.
  • Check your taps and toilets for leaks. According to Energy Australia, a hot tap leaking at one drip per second wastes 6,288 litres of water yearly!
  • Build efficient washing machine and dryer habits: See the section above!

Energy savings tip #9: Use your solar system more efficiently (if you have solar).

As we discuss in our article on the pros and cons of solar panels, the approximate cost of a good quality solar system installation can be anywhere between $2,500 to $13,000. However, depending on several factors, the average payback period for a solar system in Australia is typically around 4-5 years. 

So, while solar power can be a large initial outlay, they can pay for themselves within a few years through lower energy bills. 

If you already have solar, there are ways to maximise the benefits:

  • Face the solar panels to the north and remove any obstructions;
  • Find an electricity plan that offers a good solar feed-in tariff
  • Use timers to run your appliances during the day when solar electricity is generated

Thinking of going green with a solar panel?

Energy savings tip #10: Compare and switch energy plans frequently.

Following the nine steps above can be a great way to save hundreds of dollars on your energy bills and build good habits. But there’s one simple step you can take to save even more: reviewing your energy plan to see if it’s the right one for you.

By actively comparing and switching electricity and gas plans to a better one, you could save between $120 and $404 annually. But, according to Compare the Market, 79.45% of Australians said they haven’t switched energy plans in the last 12 months.

“It’s quite alarming that as many as eight in 10 Australians admit to not switching gas or electricity retailers—especially because it means they could be paying more than they need to for their energy,” Compare the Market’s Head of Energy Meredith O’Brien said.

“Many people may not realise that they could roll onto a more expensive plan after the benefit period expires, which is usually 12 months. So, while your existing plan may have been competitive at one point, it’s highly likely that any perks or discounts you once enjoyed have expired.

“Unless you compare or switch to a different plan, the reality is you could be missing out on cheaper deals. Most Australians wouldn’t choose to pay more for an identical item at the supermarket, so it doesn’t make sense that so many do it when it comes to the exact electricity or gas supply.”

This is especially important to do if you’re on one of the default offers mentioned at the beginning of this article. If you can’t afford a 20-30% rise in the cost of simply turning the lights on in your house, it’s time to switch to a provider who’ll give you a better deal.

The Australian Government has an energy comparison tool called Energy Made Easy, which can help you find a more affordable plan.

Written by - William Jolly

Content Manager
William is the Content Manager at Jacaranda Finance. He has worked as both a journalist and a media advisor at some of Australia's biggest financial comparison sites such as Canstar, Compare the Market and Savings.com.au, and is passionate about helping Australians find the right money solution for them.

You can get in touch with William via williamj@jacarandafinance.com.au.
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