Households should be no stranger to increasing energy costs. High energy bills have the potential to blow out family budgets and require difficult cost-cutting measures to make ends meet. These giant price increases rarely seem in line with wage increases, and there’s a good reason for that – they simply aren’t.
In this blog brought to you by Renew Energy, we explore the current state and future of energy prices in Australia, and how solar power factors into the equation. With this information distilled, we offer you some key takeaway points to help you better make smarter decisions related to energy in the future.
Fifteen years of alarming energy statistics
The price of energy has been dramatically climbing for well over 15 years, with no indication of slowing down. A 2013 Australian federal government report demonstrated that prices had risen by 72% for electricity and 54% for gas in 10 years prior to June 2013.
In a more recent 2018 report by the Australian Competition and Consumer Commission (ACCC), retail customers in the National Electricity Market are paying 44% more for electricity than just ten years ago.
What are our energy prices made up of?
Consumers obviously don’t pay for just the cost of generating the electricity itself. It is in fact four different components that make up a bill:
- The network component is the cost of transporting the electricity, and is the largest contributor to the overall cost of electricity
- The retail component involves servicing and billing customers
- The wholesale component is the cost of actually generating the electricity
- The government policy component includes the cost of governmental environmental schemes.
With each one of these being able to fluctuate, it becomes more evident how electricity price prediction can be so difficult.
Each component of our electricity prices has suffered price hikes in some way. In the next blog, Renew Energy exam in detail how these spikes have occurred, and what this means for the future of electricity prices in Australia.
Looking to circumnavigate the energy price surge?
With the prices of electricity set to continue grow, there has never been a better time to invest in solar power. The team at Renew Energy are happy to answer any questions you might have about electricity prices in relation to solar – make sure to get in touch today.