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Why Do Electricity Costs Vary?


Your electric bill is one of those monthly expenses that you may feel like you can never get a grip on. There are some months where you feel as though you are doing everything in your power to limit your use of power, but your electric plan is still sending over a substantial invoice. There are reasons why those energy costs may be in flux, and ways you can help curb the issue to make sure your utility company isn’t hanging you out to dry.

Renewable Energy Sources


Green energy has become a trend that several homeowners have found themselves flocking to in recent years. Green, or renewable, energy, is produced from natural resources that are not being depleted through use. Renewable energy has been considered a wave of the future, as it does not negatively impact climate change, nor does it contribute to carbon emissions.

When you compare electricity costs, there are various renewable energy sources to keep in mind. Perhaps most notably is solar power, generated from sunlight and captured through the use of solar panels on one’s property to convert into electricity. These solar systems can power much of a person’s home from their hot water system and phone charger to their air conditioner and even their automobile.

However, reducing carbon footprints has become a focus in this push for a greener future. Companies find themselves becoming carbon neutral, bringing greenhouse gas emissions down and then purchasing carbon offsets equivalent to the remaining emissions. This allows for companies, and even some homeowners, to contribute to social and environmental outcomes. For organizations, this can even provide employment opportunities and support maintenance for local wildlife.

Evolving Electric Providers


The push for green energy solutions has led to some increases in electricity prices, as governments work to minimize the use of fossil fuels. However, some countries are trying to curb dropping these higher electric rates on customers to support maintaining and improving infrastructure.

For example, in Australia, there have been proposals have been brought forth to make sure customers get the lowest price, and are not just footing the bill for a long-term solution. This has included further privatization of government-owned electric suppliers, as well as retail price deregulation and adjustments to environmental policies.

Some homeowners have found that switching their energy supplier is in their best interest, evaluating how much their cost per kilowatt per hour may be beneficial for their energy plan. This includes looking into any fixed costs from a supplier, as well as the length of a contract and potential exit fees.

Misunderstanding Contract Terms


Just like signing on board for any contract, it is important to understand the terms and conditions of your electric plan. A typical energy bill is broken down into three major components:

  • Wholesale costs
  • Network charges for reliable delivery
  • Retail margins for meter readings

A utility bill can also include components based on your ZIP code, with the cost of transporting energy and wholesale costs being impacted based on some jurisdictions. Electric service providers compete for customers on price, incorporating the expense of maintaining and upgrading electric supply networks as set by regulators. The wholesale cost of electricity and natural gas prices are set by competitive markets, but much of the increase in prices has been attributed to maintaining networks and increasing electric supply capacity.

Be sure to evaluate the terms and conditions of your electric plan to make sure that there is a maintenance of rates, and an understanding of the potential for opt-outs if you look to join a different supplier. On your own end, do what you can to limit the use of electricity within your home, from unplugging appliances to limiting the hours you keep the lights on. It seems minimal but can have an impact in certain capacities.

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