You might have noticed that power companies love deals. Us included! But have you stopped to think whether a good deal now is enough of a reason to choose one company over another? Many Kiwis don’t, and we think it’s important that you know what these benefits are so you can make an informed decision about whether they actually help your household save on power.
On this page, you'll learn things like:
- What a sign up credit is.
- Why bundle deals make sense, and when they don’t.
- When to go for a free gift, and when to pass.
Why do power companies offer deals and benefits?
For the same reason that other types of companies do – it’s a competitive market and consumers have plenty of selection. Offering promotions can grab the attention of Kiwis who may be in the market to switch power companies. As we’ve covered in this Comparing Power section, it can be hard to immediately know the difference between one power company and the next without some research. A benefit like a discount or freebie can bring potential customers some immediate value.
Powershop runs promotional deals frequently too – there’s nothing wrong with doing it. But we encourage anyone considering us or the competition to make a choice based on factors that will be of use to you long term. Let’s dive into some common deals and things you should think about before taking these up!
Understanding 'sign up' credit
A sign up credit is a value amount applied to your first bill or bills from a new energy retailer to ‘sweeten the deal’. For example you may join during a promotional window that offers ‘$100 off your first bill’. Others may offer a first month totally free up to a set amount – same thing. These sign up credits can be great for households wanting a break from their monthly bill. However, if the retailer requires you to stay for a set amount of time (ie a fixed term contract), then you should run your numbers on their daily and kWh rates and your average usage level (refer to an old power bill of the same month in the year). It could be that the $ credit you ‘saved’ is recouped later in charges that would otherwise be lower with a different retailer.
You should also check the terms and conditions of a sign up bonus to ensure the credit applies to energy usage at any time of day. It probably will be, but check just in case.
On the positive side, a sign up credit is really common within the industry (we do it!), and in many cases it does save you, even when extrapolating your costs out over the year. So this isn’t us saying don’t go for promos – rather just stop and think first!
Bundles utilities - are you getting the best deal?
Some providers don’t just offer electricity supply to your home, but other things too – gas, broadband internet, phone and mobile. Some Kiwis like this because stacking up utilities with one provider can decrease the admin of paying different companies’ bills. Rather, users can pay one amount for everything, which some like for ease of budgeting.
But on further investigation – are you getting the best deal? Are you enjoying the most affordable or most reliable internet or phone connections as well as power? Outside of a combined bill, there are few practical reasons why you need a combined utilities provider. It’s very common for ‘bundlers’ to offer a cheap broadband deal to then make this money back on expensive electricity rates. This can make comparing quite difficult.
You might prefer to still do comparison shopping for each of these utilities individually to find the best possible combination. A bit of extra research time now, and some automatic payments set up will have you enjoying the low admin while still getting the best deals from available providers.
We all love free stuff! Even though we know deep down, it’s unlikely a free lunch actually exists. Sometimes power companies give away gifts, appliances and gadgets to consumers as a perk of signing up with them. Getting a brand new TV or fridge is a big deal, especially to those who are in the market for one of these appliances. Much like the sign up credit though, you’ll want to work out if you’re better off financially over the 12 or 24 month contract term (these gifts will usually require a fixed commitment and higher rates) with your best estimate of usage and the retailer’s rates. Otherwise a free lunch can end up leaving a sour taste!
You might also choose a power company because of its own commitment to renewable energy and organisational sustainability. Some retailers will offer you discounts on eco-products simply by being a customer (think cleaning, electric bikes etc).
For many Kiwis, this is a great reason to choose one power company over another – the more New Zealand can do to stay clean and green, the better!
'Early payment' benefits
It’s quite common for energy providers to offer a ‘prompt’ or ‘early’ payment discount on bills you pay quickly after receiving them. It might be tempting, especially if you’re the type of person who does get to their bills as soon as they arrive. But ultimately, the faster you pay benefits the power company much more than it does you!
Thankfully, not all retailers work to this early payment model, and the New Zealand government would prefer these disappear entirely as they favour consumers who have the means to pay quickly. At Powershop, we don’t do prompt payment discounts – we think Kiwis deserve some control over when they pay.
Pre-purchasing power is a benefit for consumers who want to stock up power at a discounted rate for use in the future. Powershop’s The Shop in a part of our customer’s online account area where they can buy units of power ahead of time. This can bring savings, but will require you to be in a position to buy power before you use it. Luckily, we offer packs in both small and large sizes to suit different budgets. Head over to The Shop information page for more details
Free usage hour
This is another benefit out in the market, where consumers can get an hour’s worth of power usage free every day. With some planning of power use, this may bring consumers some savings. However you should know that these models are based on off peak power usage - which are typically during working hours and at night. Unfortunately this means if your household all works during the day and gets early bedtimes, it can be hard working this free hour into your routine. But there are consumers who are at home during these periods and can make use of the shower, oven, washing machine and other power hungry appliances.
Loyalty & referral benefits
Hey what about those customers that have stuck with a retailer for years!? It can’t just be the new customer that gets all the goodies! Make sure you find out about each retailer’s referral benefits (if they offer them), as you could get some big savings in the form of account credit, simply by referring your friends to the same company.
You should also find out about any loyalty discounts you get simply by being a faithful customer! For example, Powershop’s Simple Saver pack offers bigger discounts for every year you stay with us (up to 5 years).
Quite a common situation in our industry is for retailers to work hard to keep you as a customer only when you tell them you’re looking to leave. We reckon the best way to keep customers is to treat them right – the whole time.
What power deal made sense to you?
Tell us about a deal that made you choose a Kiwi power company. Did you reap the benefits and enjoy good service long term? Or have you picked a company off a promotion alone, then regretted it later? Let us know and we’ll add your (anonymous) experience to this page – and don’t worry, we won’t name the company or you!