How do you find cheap electricity rates for your home? Do you know which plans are the most cost effective? Are incentives worth it? These are all questions to consider when looking for a new electricity plan for your home. We have several tips to help you find the best possible electricity rates in your area.

            Variable vs Fixed Rate

Variable rate plans might have a cheaper electricity rate than a fixed rate plan when you initially look at it. However, variable rate plans will change their rate every month, while a fixed rate plan will lock in your rate for the duration of your contract. The contract length for a fixed rate plan can last between three months and three years, depending on the plans offered by a retail energy provider (REP). During this time, your rate won’t change as a result of market demand changes. This means you’ll continue to pay the same cheap electricity rate for that period of time.

The benefit that variable rate plans have is that since there is no contract, you can change your plan or provider at any time. Knowing this, REPs try to keep variable rate plans as low as possible, but market conditions will cause them to fluctuate every billing cycle. Fixed rate plans are more helpful for budgeting household expenses, however. If you’re really strict about budgeting, and stay on top of energy use, a prepaid plan is another possible option. The electricity is paid for upfront, but will shut off if you exceed the amount you paid for without adding more credit to your account.

Incentives

Some plans will offer an incentive to get you to sign up. These incentives include credits on your bill, gift certificates to local places, and smart thermostats. One thing to keep in mind is that these incentives are usually built into the cost of the plan, so what may seem like a cheap electricity rate with a free device or gift is actually getting you to pay more than the item is worth. Compare plans with incentives to plans without and use previous bills to determine how much you would be paying each month with the new rates. If you find that the new rates have you pay more than the gift is worth, it isn’t worth taking the incentive.

EFL

Check the EFL for any plan advertising cheap electricity rates. Sometimes these rates are just the rate for the average level of use, which is between 1000 and 1500 kilowatts of electricity. Anything above or below this range could be considerably more expensive than the advertised rate. Checking the EFL for any plan is essential, as it will tell you about any other applicable charges, fees, and penalties. It will also tell you your contract length, energy content, and other important data.