How To Save Money on Your Electricity Bills & Avoid Other Hidden Fees

Singapore electricity tariffs are expected to decrease by about 0.3% for Q2 of 2024 due to lower energy costs. This will reflect a reduction of 0.10 cents per kWh before GST, based on information from Singapore’s national grid operator SP Group.

While the tariffs are decreasing, it’s a good idea to keep in mind that it is not fixed and will fluctuate from time to time. The table below, for instance, shows the average monthly electricity bills for households in Singapore starting from 1 April 2024.

Source: SP Group

How can you save more on your utility bills? Are there any schemes or rebates you can claim from the government to offset your utility costs? Read on to find the answers.

Related: 4 Financial Platforms to Help You Manage Your Money From Home

Why Are Your Electricity Bills Still Relatively High?

Reasons such as higher energy costs due to higher global gas and oil prices that are further exacerbated by worldwide conflicts, high and sustained inflation, and global economies recovering from a post-pandemic slump are cited as the main drivers for the recent increases in Singapore’s electricity tariffs.

Singapore’s electricity tariffs can be attributed to several key factors: higher energy costs driven by escalating global gas and oil prices, further intensified by worldwide conflicts, sustained high inflation, and the global economic recovery from the post-pandemic slump.

Global oil prices have skyrocketed due to the moratorium on the EU and US purchases of Russian oil. Unfortunately, 95% of Singapore’s electricity is generated using natural gas—a derivative of crude oil itself—and will continue to be the dominant fuel source in the near future, according to Singapore’s Energy Market Authority.

What can you do on your end to limit the impact of increasing electricity prices?

Open Electricity Market (OEM) Retailers

OEM retailers offer highly competitive electricity plans in a bid to gain higher customer retention and greater market share. Here are some of the best fixed price electricity plans we have identified for you. For more information on the best OEM retailers and plans, check out our curated list of the best electricity retailers in Singapore.

Best Fixed Price Electricity Plans in Singapore

Fixed-price electricity plans in Singapore are a great option for those that want to lock in their electricity rate and avoid the uncertainty of rate changes. For this reason, the average six-month plan tends to be the cheapest option as it is the shortest guarantee of fixed pricing. For a 12-month plan, Sembcorp’s “12M Sunshine Plan” charges 33.88 cents per kWh for 12 months. For longer-term plans, Geneco’s “Get It Fixed 24” is a 24-month plan, at 29.42 cents/kWh.

By choosing these retailers, consumers can save if the rates are better compared to SP Group’s rate, as it can be fixed for a longer period of time.

Credit Cards

Credit cards are a great way to earn cashback from your monthly utility bills. Check out our roundup of the best cashback credit cards.

Potential Hidden Costs

Understanding how to save on your utility bills is important, but learning how to avoid hidden costs is equally as important. Here are some potential hidden costs that you could already be incurring:

1. Administrative Fees

Some retailers charge an administrative fee for processing your application and for using their services. Make sure you read the fact sheet and are aware of what you’re paying.

2. Auto-Renewal Clauses

Check if your contract is an auto-renew or non-auto-renewal electricity plan. To avoid renewing your contract with a lousy rate, make sure you are aware of when your contract expires and cancel your plan before it is too late.

3. Transmission Loss Factor

When electricity is delivered to your home, a percentage of electricity is lost along the way. Some electric retailers could factor in the loss, causing you to pay for more power than what your meter records.

Currently, most retailers absorb the transmission loss factor (TLF) to stay competitive, but this can change anytime. Double-check with your electricity retailer’s website or fact sheet before signing the contract.

4. Carbon Tax

For power-generating companies (direct emitters of greenhouse gases), the carbon tax is $5 for every tonne of emissions until 2023. From 2024 onwards, the carbon tax rate will increase exponentially up to $25 per tonne, $45 per tonne (2026 and 2027), and $50-$80 per tonne by 2030.

Some power plants (and the retailers they work with) may pass this cost to consumers. For a typical four- to five-room HDB flat, the carbon tax should be around $0.60 to $0.80 monthly.

5. Early Termination Charges

Different retailers have different pricing mechanics for penalty fees. Some charge a fixed fine, others a variable amount. Make sure to check with your retailer on the early termination charges to know what you are in for.

Summary

Reducing your electricity consumption directly is the most straightforward method to lower your electricity bill. However, if you are unable to do so, there are many other ways to cut down on your electricity bill – including finding a cheaper electricity retailer and earning a higher cashback on your utility bills with credit cards. Alternatively, pursuing other means of energy such as solar power could be another viable call of action; although harder to implement for the common people.

Check out our roundup of the best credit cards to pay your utility bills!

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