On your search for cheaper energy bills, you might have come across different types of rates. This article will teach you all you need to know to compare electricity rates easily while also getting significant savings on your energy bill. So, without further ado, let’s begin.
Check this when you compare electricity rates.
We’ll try to make it as simple as possible. When you compare electricity rates, one of the first things you’ll notice is fixed and variable rates. They are rates that refer to the kWh price you pay each month and how it is treated, and if it fluctuates or no. But what does this mean to you? Is simple:
1. Do you live in a Deregulated State?
According to Statista, the United States consumed around 88 exajoules of energy in 2020, based on global primary energy consumption by country. The US consumes twice as much power as India, which has four times the population of the US. In a country with such high energy consumption, you will see that we have the Power to Choose in around half of the States.
Before you compare electricity rates, make sure you’re living in a energy deregulated state. You will find in some states electricity deregulation, in others gas deregulation, or both. So what does this mean? In a nutshell, energy deregulation means that if you live in one of those states, you can choose your energy supplier, compare electricity rates, and finally make some informed decisions that will help you save money.
Ps. We have a whole article about the benefits of energy deregulation; make sure you check it out
2. Rate type: Is it a fixed or a variable rate?
We’ll try to make it as simple as possible. When you compare electricity rates, one of the first things you’ll notice is fixed and variable rates. They are rates that refer to the kWh price you pay each month and how it is treated, and if it fluctuates or no. There are advantages to both rates, but what does this mean to you? Is simple:
They are what you will typically find if you have never switch electricity providers. At this type of rate, the price you pay each month can fluctuate monthly based on the market situation. So, for example, when our HVAC’s are at their highest in winter or summer, the electricity demand is higher, and the price, per consequence, is also higher.
Their kWh rates are set – by contract – for a certain period; those rates remain the same come rain or shine. When you compare electricity rates, they’re a must because they help you save money and help you stick to a budget regardless of the external conditions. But on the other hand, they usually mean signing a long-term contract.
So, is it better to have fixed or variable energy rates? Because there are no one-size-fits-all electricity plans, the response will differ depending on the customer. The way your household consumes energy will determine whether you utilize fixed or variable rates. The most significant distinction between variable-rate and fixed-rate programs is the degree of certainty. Monthly bills can be budgeted more easily with fixed rates. A fixed-rate plan is likely a better alternative for you if you desire a more predictable budget.
With a variable-rate plan, predicting your energy costs might be tricky. But what if you’re willing to change your energy consumption in response to market conditions? In that scenario, a variable-rate plan could help you save money. On the other hand, many people and families may struggle to cope with such a lifestyle and unpredictability.
Ps. We have a whole blog about fixed vs. variable rates so feel free to check it out.
3. Contract terms: How long do you want to have that rate?
When it comes to contract terms, you will find that there are typically two types of contracts: the ones with a fixed period, where you lock the rates of your agreement with a supplier for a specific time, and the ones where there are no strings attached. In general, you will most likely get out there that the longer the contract term, the cheapest the rate.
If you compare electricity rates, remember, fixed prices can protect you from spikes and fluctuations in energy rates; however, when you compare electricity rates, make sure you check out any exit fees of your contract before changing your electricity supplier. Why? Most fixed rates come with these fees, and it will be pretty expensive if you decide to leave before your contract’s initial term.
Ps. We also have some cool facts to get lower electricity rates.
4. kWh price: The measuring unit for electricity.
Another critical factor to consider when you compare electricity rates is, of course, the rate. But what does this mean? Just like any other purchase, you should take a look at how much it can cost you. So, for example. Whenever you want to buy something, whether you’re at the grocery shop or a regular store, we tend to compare how much the specific something will cost us in different places.
When we talk about energy consumption, the measuring unit is kWh, which means you will pay per 1000 watts of energy used. So the energy consumption is the needed wattage for an appliance to run and the time when you have it running. It sounds complicated, but we swear it isn’t. It would take ten hours to use one kilowatt-hour of energy if you turned on a 100-watt bulb. If it still sounds complicated, check out this video.
If you want to get an idea of whether your current – or new – kWh price is too high, check out EPA’s website to see if your rate is above or below your state’s media
5. Get advantage of the electricity marketplaces like PowerChoiceNow.com
When you compare electricity rates, the easiest way is to go to a website that makes the comparison for you. Sure, you can DIY it, but it will take you way longer, and you will probably get the same results. Just remember, before you sign up with a retailer, consider the following:
- Read the Fact Sheet for your chosen price plan, which summarizes the essential contractual details such as terms, termination fees, and more.
- The type of energy supplier. Some folks like to decide if they get a green energy rate or a non-renewable one.
- Your supplier’s information, their lines of communication, and customer service.
- The date when your contract ends. It is crucial, and you can find unwanted surprises if you don’t bear this in mind.
- Rewards, or any bundled products or services’ terms and restrictions.
Having the power to choose your energy supplier and the ability to compare electricity rates and decide among them is excellent. What’s even better is that you don’t have to go through all this process by yourself. We encourage you to check out our website, enter your zip code, and some basic information about your consumption. You will find out if there’s a rate that may benefit you more than your current one. At PowerChoiceNow.com, finding a new energy supplier is straightforward.