Shopping for an electricity plan doesn't have to be difficult. However, for consumers living in states with dregulated electricity, the shopping process can feel overwhelming.
With so many electricity providers offering different plans, it can be hard to know which one is right for you.
The good thing is, you’re not alone.
Come with us as we discuss how to shop for the best electricity plan for you.
Before we dive in, let’s look at what you can expect from an electricity plan. The majority of people believe that an electricity plan is simply the rate or price per kWh. However, there is so much more to consider.
We like to think of an electricity plan as the contract between the electricity provider and customer, which provides electricity services to a residential property or business.
You’ll find the following items in a standard electricity plan:
Rate or Price Per kWh: This is referred to as the “energy supply rate” in most states. For example, in Texas, the rates electricity providers advertise are average prices for energy AND delivery.
Term Length: Your contract term length is the length of time the given price is valid and the period that you commit to the provider.
Plan Type: Rates may be fixed, variable, or indexed depending on the plan type.
Renewable Percentage: Is the plan a percentage green plan or a 100% renewable plan?
Cancellation Fee: This is the fee you will have to pay if you decide to cancel your service before your contract is up.
Additional Features: Some additional features you may find in your electricity plan include smart thermostats, online tools, rewards programs, no-deposit electricity, or prepaid electricity.
While many pieces form the larger puzzle of an electricity plan, most people consider the rate first and foremost.
Let’s take a look at some of the significant considerations you should make when looking for the right electricity plan.
At first glance, many electricity plans look the same. For this reason, many consumers fall into bad deals that look good at first. It’s essential to read the description and policy of each electricity plan carefully so you can get a better idea of whether or not it works with your budget.
When you shop with WattBuy, you can find the cheapest plan for your needs based on your usage data. WattBuy can also identify plans that are most likely to have low or no deposits (in Texas) and plans with fully renewable energy.
One of the most important things you’ll want to look at is the length of your contract. There are plans that lock you in for years or months. Some are even month-to-month.
Plans that are greater than 12 months are known as long-term plans. More often than not, these kinds of plans come with more significant termination fees. However, they also often offer the best value in terms of pricing.
Plans that are 12 months or less are known as short-term plans. 12-month contracts with annual renewals are the most popular types of short-term contracts.
With a month-to-month electricity plan, you will get the most flexibility. However, the rates can fluctuate each month, making it difficult to budget for.
When searching for electricity plans, you will find three main types:
These plans lock in the rate per kilowatt-hour (kWh) for the entire length of the contract. Your rate wont go up even if market prices rise, but your rate also wont decrease if market prices drop.
The rate you pay can vary based on the cost of electricity and can be changed at the discretion of your electricity provider. More often than not, you'll find variable rates for month-to-month contracts.
These contracts are also variable-rate plans. The difference is that these contracts are linked to a specific index, such as the current natural gas price. Indexed contracts can also include time-of-use plans, such as plans with free nights or weekends.
If reducing your carbon footprint is important to you, you might consider going green with fully renewable energy.
By selecting your own electricity plan, you can gain control over the amount of electricity that comes from clean, green sources, such as wind and solar.
When shopping for electricity plans, ask how much of the power comes from renewable sources. There are many companies that provide 100% green electricity.
In addition to being good for the environment, renewable electricity may also come with incentives. Some of the most popular incentives include bill credits, gift cards, veteran or military discounts, or charitable contributions.
Once you think you have found the right electricity plan for your needs, make sure to read through all of the included documents and check to see if there are any additional fees. When you reach a point where you are confident with the plan you’ve found for your household, the process of signing up is simple!
Depending on your state, you may have a few days to rescind your contract if you change your mind, though we recommend being confident about your choice before signing on the dotted line.
Of course, if you still need help finding the right plan, make sure to get in touch with us here at WattBuy. Our goal is to simplify the process of identifying the cheapest and most popular options for electricity plans so consumers can get the plans that work best for their needs.