Powershop, recently featured in an article in the Age, is an online electricity retailer that allows its customers to be active players in the retail electricity market in a way that was previously impossible. By allowing its customers to make simple decisions through a mobile app or their computer, Powershop makes it easy and intuitive for them to save money on their power bills. The company claims that its platform – which uses sophisticated algorithms to expand customers’ choices in terms of which generation projects they want to support, what levels of discount and certainty they want to achieve, and how they want to manage their cash flow – is the first of its kind anywhere in the world.
Some background – Australia’s skyrocketing power prices
Most Australian homes have at best only a rough idea of what their electricity bill will be before it arrives in the mail. Over the past few years, this has lead to nasty surprises, otherwise known as ‘bill shock’, for many Australian households – quarterly bills that had been in the range of $100 were suddenly almost $300. People started to think about electricity in a way that they had rarely done before: it was now something to be used carefully.
Although the current government sailed into office laying the blame firmly on the now defunct Carbon Tax and the embattled Renewable Energy Target and other ‘green schemes’, the fact is that none of these were the true culprit. At this point it is quite clear that a huge overinvestment in the country’s electricity infrastructure is largely responsible for the pain that households have been feeling quarterly for the past few years. Although there have been calls for electricity market reform, and even some suggestions about alternative approaches to electricity pricing, it’s unlikely that retail power prices are going to come down anytime soon.
Add to this the fact that major retailers (who control more than 75% of the market) have been charging customers up to 40% more than the best offer in the market, and it is no wonder that many people have already taken matters into their own hands: They’ve replaced their old appliances with newer, energy-efficient ones. They’ve installed solar panels on their roofs. They’ve been smarter about not leaving things on when not in use. They’ve shopped around for retailers who promise lower electricity rates. In short, they’ve responded to the new, high electricity prices in every way imaginable. And the impact has been tremendous: electricity demand has actually fallen across the nation, despite official predictions that it would continue to rise.
How Powershop aims to help
It is in this muddle that Powershop entered the fray. The company, saves its customers money by crafting personalised offerings which deliver them competitive electricity rates from multiple generators for their location, consumption habits and meter setup. Powershop currently services consumers in New Zealand and Victoria, but is planning on expanding into New South Wales (where a pilot project is already underway) early this year. Other states are to follow.
Powershop operates differently than a standard electricity retailer. First of all, customers who sign up with Powershop aren’t locked into a single rate plan as they might be with other retailers. Instead, they can mix and match from a number of low-cost monthly electricity packages called ‘Power Packs’. These can be purchased now to be used right away or in the future. On top of the everyday low rates, the company also offers bargain deals to its customers (‘Special Packs’) on a regular basis. These are occasional discount offers that Powershop will notify their customers about via their website, mobile app and Facebook. In order to lock in a discounted rate for the period of the offer, the customer need only click or tap to opt in. ‘Future Packs’, meanwhile enable consumers to purchase electricity for future months – an ideal option for those who want to have certainty about what they will be paying for electricity several months from now.
On top of the everyday low rates, On top of the company also emails bargain deals to its customers (‘Special Packs’) on a monthly basis. These are occasional discount offers that Powershop will notify their customers about via email. In order to lock in a discounted rate for the remainder of the month, the customer need only click or tap to opt in. ‘Future Packs’, meanwhile enable consumers to purchase electricity for future months – an ideal option for those who want to have certainty about what they will be paying for electricity several months from now.
Powershop and renewables
Powershop is part of Meridian Energy, the largest 100% renewable energy generator in Australasia. They operate two wind farms in Australia, one in South Australia, and another in Victoria.
Powershop customers also have access to accredited Greenpower ‘Green Packs’, allowing them to support the Australian renewable energy industry (at a slight premium). They may get some assurance in knowing that the company is one of the electricity industry’s staunchest supporters of the Renewable Energy Target – even as its main competitors have pushed for a weakening of the scheme. Powershop has also taken the step of making all of its customer’s electricity usage carbon neutral at no extra cost (more details here).
In the spirit of supporting renewables, Powershop is also a proudly solar-friendly utility. Unlike some other electricity retailers, the company does not slug its solar customers with any extra fees, and all of its special offers and discounts are available to its solar customers as well. Additionally, the company’s solar feed-in tariff rates are above the state minimum in Victoria, and will be similarly competitive in NSW once their services become available there.
Interactive online platform
But it may be Powershop’s online platform that distinguishes it most from the competition, allowing it to offer something that no other company or website has yet tried: an automated, algorithmic approach to billing that gives consumers unprecedented levels of choice, in terms of the generation projects that they support, the levels of discount and certainty they want to achieve, and how they want to manage their cash flow. Weekly emails and 24-7 access to their usage data via Powershop’s website make it simple for customers to track their week-to-week and day-to-day electricity usage – and take steps to reduce their consumption if they see the opportunity.
How Powershop can help solar homes get the most out of their electricity
With its innovative pricing and platform, Powershop is endeavouring to bring a new level of transparency and intuitiveness to Australia’s fraught retail electricity market. Its efforts – in particular its informative online portal – also promise to make it easier than ever for solar homes and businesses to get the most out of their systems. As we have pointed out before, because of low solar feed-in tariff rates, these days having a solar system in Australia these days only makes sense if you can ‘self-consume’ most of the power that your panels produce during daylight hours.
Understanding your daily electricity usage in detail – something that is not always easy with a standard Australian electricity retailer – is the first step towards taking control of your power bills, especially if you have a solar system. In this way, Powershop’s web portal alone could help save solar households money just by making it easier for them to keep track of how they use electricity – and change their behaviour accordingly.
Learn more about Powershop
To learn more about the company and what they offer, visit their website: Powershop.com.au
© 2015 Solar Choice Pty Ltd