Do I need to supply a full year worth of bills?

'Opportunistic switching' is the optimal strategy to maximise bill savings

By default, Bill Hero runs its analysis bill-by-bill rather than using aggregated bill data covering a full year.

Of course we understand that seasonal variation in energy consumption and solar production will occur, and it may seem counter-intuitive not to base the recommendation on a full year of data – this article explains why we've designed the system this way.

As more people install solar, and as the average size and generation capacity of those solar systems is growing, the average seasonal variation in energy exported to and imported from the grid is becoming more and more pronounced, and so it's becoming less and less realistic to find a single 'one size fits all' plan that will deliver a competitive result year round. 

The difference in price between the 'best' year-round single plan on an aggregated basis vs best plans on a per-bill basis can be very significant, so the potential savings available through the per-bill approach can be substantial.

Energy plans always include trade-offs between daily connection charges, consumption charges and feed-in tariff rates. For solar customers, the FiT rates that retailers offer are funded by the margin they make on energy. This means that the most generous FiT rates are usually associated with relatively uncompetitive prices for KwH consumption, meaning that the best summer-time plan when consumption is lower and exports are higher is less likely to yield competitive outcomes during winter when you'll be importing more and exporting less.

Adopting an aggregated 'full year' comparison strategy only means that you'll be finding the 'least worst' compromise plan.

The optimal strategy for minimising energy costs is not to try to find the single 'best' plan, but instead to continuously track the pricing available across the market, and to switch opportunistically whenever the potential value in dollars saved is greater than your own personal assessment of the effort required to switch.

Bill Hero keeps the effort expended as low as possible, by automatically running a personalised comparison for you on every single bill, so it takes no work at all for you to see what is available across the market, and understand what your potential savings are.

We designed our 'Bothered Threshold' feature to help you tailor the responses and advice the system generates for you – so a recommendation to switch will only be made when the identified savings exceed your own value placed on the effort required.

Whenever we analyse a bill and find annualised savings for you greater than your personal Bothered Threshold, we'll recommend that you switch. You can change your Bothered Threshold at any time, and even when the system finds savings for you greater than your Bothered Threshold, it's still your choice to proceed with a switch or not.

Our system focuses on checking the market on every single bill, and it will make a switching recommendation subject to your Bothered Threshold. Month by month and bill by bill, the seasonal variations will flow through, and the system will recommend a switch whenever it makes sense to, based on your Bothered Threshold preferences.

Predicting future consumption

Energy bills document historical consumption from the past billing period, so there's a lag in using that data to make a switch.

We've explored how we can predict future consumption to help subscribers move to the best plan for their anticipated consumption in the next billing period. There are two main ways to approach this: algorithmically projecting future billing period consumption, and using previous year bills for the equivalent period.

It's easy to apply season variation factors to energy consumption to algorithmically establish an estimated future consumption level. However, at the individual household level, we've found this approach is unreliable. Actual energy consumption is dependent on the unique characteristics of your home, and the appliances you use. Energy consumption is also very sensitive to weather events.

In theory, we could also request a full year worth of bills and base each analysis on the previous years' consumption for the upcoming period. We've found this to be unrealistic to manage at scale, since many households do not have easy access to old bills, and many retailers make it difficult to access old bills in their customer portals.

For these reasons, Bill Hero has adopted the policy to work with the factual consumption data documented in each bill, and we base our automated processes around this reliable, regular, factual data source.