Why is electricity so expensive in SA?

Posted by Puneet S on January 18th, 2021

Why is electricity so expensive in SA?

Living in SA and feeling powerless looking at your power bills? You’re not alone! SA has the honour of being Australia’s most expensive state for electricity; it’s also high in the running for most expensive power worldwide, according to the ABC. If this explains a lot, keep reading, we’ll tell you why! We’ll give you tips on cutting your electricity costs by hundreds of dollars, with local info for the SA market.

Meet Econnex 

Hi! We’d like to introduce ourselves. We’re Econnex, an electricity price comparison service. Our tech-savvy bargain-hunting team brings together our love of helping Aussies get a fair go, with our interest in energy.  

First things first: just looking for the best deal on your power in SA? You can click through to our Electricity Quotes SA feature to get free, no-obligation quotes on your power bill. We work with major providers to offer you the best deals; we’ve done the hard yards, so you don’t have to scour the internet. If you find a deal you like, we’ll even get the transfer started for you; less fuss, more $$$. Win-win!

Why are power prices in SA so high? 

Prices have been skyrocketing around the country for more than a decade. That’s largely been because of an increase in network costs (poles and wires), as well as an uncompetitive energy market. The ACCC wrote a damning report back in 2018; that spotlight has now led the Government to take a “big stick” approach to excessive power costs. 

But in SA’s case, there’s another powerful factor. The costs of generating power in SA accounts for about half of the increases in price in the last decade. There are a lot of private companies involved; again, ABC has some great info breaking these dynamics down here. Summarily, the state's last operating coal power plant at Port Augusta has been closed, leading to more reliance on gas. That’s led to a boost in renewables: in fact, SA is leading the world in generating power from renewables. You’ve reached almost 50% reliance on renewables now. (Yay!) Renewable power is cheaper, but the transition itself is impacting SA retail prices for grid electricity.  

According to the ABC: 

“At times of high renewable output and low demand, authorities are now intervening in the market and ordering more expensive gas generators to switch on. That’s because if the power mix quickly shifts, there there's a risk of the grid collapsing and a statewide blackout.” 

Pretty serious stuff. There’s also the fact that 70% of SA’s power generation capacity is owned by three companies. So there’s not much competitive pressure. There’s also limited access to “hedging contracts”, which are used in other states to keep power prices stable. The ACCC is aware of at least one electricity retailer which was put off entering SA because of that limitation. In other words, SA is not seen as a profitable market for electricity retailers to enter; there are significant barriers to entry. The higher market share of the big three power generators becomes a catch-22 that prevents competition. 

Power in SA: a powerful snapshot 

Research by Canstar Blue on the average electricity bills in Australia leads to some rather eye-opening facts. The average SA household power bill is ,759 per year; that’s almost 30% higher than in QLD and a whopping 47% higher than in the ACT. Conversely, South Australia has far-and-away the fastest payback period on solar PV system installation. SA residents have comparatively high costs of grid power and whole lotta sunshine. So you can pay your system back in as little as two years. (Always look on the bright side!)

So, what to do about my power bill? 

Well, there’s a very compelling case for joining the push for renewables in SA. As well as boosting the state’s already-amazing renewables performance, you’ll be saving a pretty penny - and the planet too! The average annual solar bill in SA is ,232 so there’s a difference of about 0; not half shabby. 95% of survey respondents found their solar panel investment to be a good financial decision; there are not many investments out there with payback rates like that, so why not? 

For an even quicker win, there’s something Econnex can help with: getting the best, most affordable electricity quotes in SA. Remember the Government’s “big stick” approach to the national electricity market? It’s already starting to trickle down to retail customers. But it takes time for policy to translate into the change Australia needs. 

As a consumer, you’ve got access to more than a dozen electricity retailers, competing with each other for your dollar. Their offers vary greatly in price; assuming medium usage (13 kWh/day), you’re looking at anywhere between ,600 and ,000. With conditional discounts, this can be reduced even further, saving you hundreds. 

What are these conditional discounts, you may ask? Well, if you signed up a year or two ago (or more!), you’re probably not getting them. They’re introductory offers to get you to sign up; after a certain period, you’re generally swapped onto Default Market Offers. And that’s not good. It’s like paying the rack rate at a hotel and finding out you could’ve got 50% off on Groupon. 

So ideally, you should get electricity quotes every 1-2 years to make sure you’re getting a sweet deal. That alone can save you hundreds; combine it with affordable solar, and you’re no longer dreading your power bills. But it sounds like serious effort trawling through a ton of websites to find out what’s on offer, right? Well, that’s where we come in. Econnex offers an end-to-end energy comparison service, delivering electricity quotes SA in just a few minutes. (Feel free to click that link to find out more!) 

Econnex: empowerment through power. 

Here at Econnex, we’ve devised a powerful price comparison system that delivers electricity quotes in SA at a glance. Unlike some other price comparison websites, we don’t confuse and annoy you with a “star system”. For one thing, we already know you’re a star (holla!) but also because dollar figures make more sense. (Stars are great to have in Mario Party, but sadly, Mario Party won’t pay the bills.) 

You can also see the main info about your electricity contract offer at a glance. That makes it easier to understand the fine print. What’s a great deal for someone else might not be for you; it depends on when and how you’re using power. We’ll talk about that more in the next section. And if you’re dazed and confused by the jargon, good news! We’ve got plenty of info on the Econnex website to help break things down for you. 

To make things even easier for you, we’ll process the connection request for you if you decide to switch providers. And we do this all at no charge to you!

So, now you know who Econnex is and what we can do for you! Without further ado, here’s more helpful info on finding the right electricity quote for your home in SA. (Don’t live in SA but still made it this far? All good; check out our handy guides to energy comparison in VIC, QLD, NSW, and ACT. We’re here to help all Aussies take back their “power” with fair power prices!)

Getting an electricity quote in SA 

So, we get that it feels like all power is the same. It runs your aircon in summer, your heater in winter. You wouldn’t have a fridge or lights without it. But there sure is a lot of difference between electricity plans. So it’s important to read the fine print, maximise your savings and minimise your bill shock. Here are a few things to look out for when you’re getting electricity quotes in SA. 

• Standard or market offer? Living in SA and haven’t switched your power plan for years? You may be on a standard contract. These have basic conditions set by government regulators. They’re more expensive than “market contracts” offered by electricity retailers. Market offers vary plenty. For example, minimum contract length, discounts, benefit periods, late penalty rates, etc. Stick to the conditions, and you can save a fair bit. But use a ton of power at peak time, and you can get stung. Lastly, if your contract is fixed-term, you may end up on the Default Market Offer. That’s expensive and easily preventable; you can fix this by signing up for a new plan including discounts.
• Time of Use (TOU) or fixed-rate tariff? If your plan is a fixed rate, you’ve got just the one stock-standard per-kWh electricity tariff round-the-clock. TOU plans are variable depending on when you use power. You can save heaps by limiting your power consumption during peak times. But if you’re WFH during weekdays, for example, it can cost more to be on a TOU plan. On the other hand, night owls can save a lot of money this way.
• Supply and usage charges. Your supply charge is the base per-day price you pay for grid connection. This doesn’t vary, whether you use no power or a ton. Usage charges are how much you pay per kilowatt-hour (kWh) of power you use; these will be fixed or TOU.

Some retailers will offer you a cheaper supply charge but cost more per-kWh for what you use, or vice-versa. Usually, cheaper usage charges are going to be the better choice.

• Discounts and late payment penalties. These can add up over time!
• Solar feed-in tariffs. Exporting power back to the grid maximises your solar savings. The credits you receive are called solar feed-in tariffs (solar FiTs). We’ve compiled a list of the best solar feed-in tariffs available in SA, varying from 3c~16c per kWh exported. A word to the wise: cheapest isn’t always best. Overall, it will depend on a few factors: are you getting a higher FiT but fewer discounts? What sort of price will your grid electricity be? What are you trading-off for a higher FiT, and is it worth it? Check your fine print carefully.

Why bother with electricity comparison? 

As a nation, Australians like to argue about energy. It’s a very polarising topic! But one thing we can agree on: South Australians are paying too much for power. But getting your plan right can save you hundreds of dollars. Thanks to our electricity quotes SA service (handy link for your convenience!) it’s pretty easy to do, too. We’ve saved Aussies tons of money on their power bills with a better way to get electricity quotes in SA. 

Nearly 40% of households haven’t compared prices and switched to a cheaper plan. Are you one of them? 

So, wondering whether you can find a cheaper, better electricity plan? The answer is “probably yes”! 

Soaring solar in SA 

SA is leading the nation (and the world) in renewables. About one in three houses have solar panels on their rooftops. Australia-wide, we’re sitting at about 21%. Compare that to a paltry 6% of rooftops in the US, and it’s quite an achievement.  

Here’s another fun fact. In October, for one hour between noon and 1 pm, solar power provided 100 percent of South Australia’s energy needs. That’s a first here in Australia and for any major jurisdiction worldwide. (Pat yourselves on the back, SA! At Econnex, we love a sunburnt country, and we’re proud of you.)

SA electricity quotes at your fingertips 

It’s never been easier for SA residents to find the best electricity quotes in SA, thanks to Econnex. We deliver a faster, simpler, better, and free service; finding you better deals, so you don’t pay more than you have to. 

Want to know more about electricity quotes in SA? And useful info about electricity in general? Visit our blog for insights like making your home energy-efficient and save energy costs on home entertainment systems; or head straight to Econnex’s Electricity Quotes SA feature to get started on getting a fairer go.