If you’re concerned that your electric bills are too expensive, rest assured that you’re not alone. For the average Adelaide resident, the cost of electricity is approximately $1,759 per annum, which is much higher than it could — and should — be.

Let’s take a look at what’s contributing to that higher electricity bill and what you can do to get better prices for your power.

Electricity Usage

There are two different types of power rates when you buy electricity: 

• Supply rates – a fixed, daily charge to be connected to the energy supply 

• Usage rates – a variable charge that goes up or down depending on your electricity usage. It is set by your electricity retailer. Usage rates make up the main portion of your bill.

Most Australians depend on electricity for everyday things like cooking, cleaning, cooling and heating, and everything in between — so the more electricity you use for these tasks, the higher your bill will be. Other factors that affect your usage rate are: 

• The size of your home and what it's made out of

• The number of people in your household 

• What appliances you use

Homeowners in Adelaide pay some of the highest usage rates in Australia, so let’s break down the electricity costs to see where your money is really going.

Electricity Costs

Four main components weave together to create your electricity bill. 

1. Wholesale. Approximately 34% of your electric bill is dedicated to wholesale costs, or the cost of generating your electricity. This varies depending on the source of the electricity, whether it's renewable (wind or solar) or non-renewable (gas).

2. Network. These costs cover the physical elements of electricity, including the poles and wires used for transportation.

3. Retail. Your retailer must pay distribution companies to transport electricity, which means that you often absorb these costs as well. Retail costs also cover things like databases, marketing, and maintenance of retail companies.

4. Environmental Policy. The smallest chunk of your bill, environmental policy costs help support solar power and other sustainable power schemes.

Tips for Reducing Your Power Bills

Want to save on your next electricity bill? Here are a few tips.

• Consume less energy. Less energy means lower costs. Some of the ways you can lower your energy consumption are investing in energy-efficient appliances, turning down your thermostat, insulating your home, turning off lights and appliances when not in use, and using cold water to wash clothes and dishes.

• Choose renewable power. Renewable energy sources aren’t just better for the environment; they’re better for your wallet as well. When possible, choose suppliers that use renewable sources, or invest in some (such as solar power) for yourself.

• Shop around for a better deal. Energy prices fluctuate, and there’s nothing wrong with shopping around to find the best one. Just be sure to avoid lock-in contracts, which will make it difficult to negotiate better prices or switch providers if you need to.

Your Daily Power Struggle

If you’re eager to find better electricity prices, one of the best things you can do is to be better informed about what drives electricity prices and usage in Adelaide. Knowing what’s behind your power bill (and implementing one or more of these electricity-saving steps) can help you keep your lights on and your costs down.