Switching to prepaid electricity? Prepaid vs Post Paid Electricity

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Considering switching to prepaid electricity? You could end up paying more.

Over the last couple of years, South African electricity users have been migrating away from conventional (or postpaid) electricity usage in favour of prepaid electricity. Municipalities, councils ,and body corporates especially prefer this approach to better manage billing and non-paying users. Getting consumers to pay for their electricity in advance means less unpaid bills.

The question that everyone is asking is; is prepaid electricity better than postpaid electricity? There is no right or wrong answer. There are pros and cons to prepaid electricity.

Is prepaid electricity cheaper?

There’s a common misconception by users that prepaid electricity is cheaper. This is not true and the cost per unit is still the same – if not more depending on your supply authority for example: if you reside within Johannesburg your electricity is more than likely supplied by the City of Johannesburg. The pro’s of prepaid electricity is that it is possible to micromanage your usage. By monitoring your current or previous day’s usage and making adjustments to your usage habits, you can avoid month-end surprises.

How much does prepaid electricity cost?

One frequently asked question around prepaid  electricity is how much electricity you should buy at a time. Purchasing fewer units at a time does not make the unit price less. Your unit cost is calculated based on the tariff structure assigned to your property and your average monthly consumption. In short, determine how much electricity you need in a month and buy only enough for a month period.

What are the cons of prepaid electricity?

A lack of regulations controlling the resale of electricity means that prepaid providers can add a markup on electricity being bought by prepaid electricity users.

With the trend to rather use prepaid electricity we have also seen a number of vendors, or prepaid providers, popping up to provide this service. Although not a bad thing, it can be if you make use of the wrong supplier. You could end up paying more for electricity with some users experiencing increases of more than 15% over and above increases set by municipalities.

A set of guidelines have been issued by the National Energy Regulator of South Africa (NERSA) to manage the process, but these are only guidelines and can’t necessarily be enforced. The guidelines state that a prepaid electricity vendor can’t charge more for electricity than the tariff it is provided at through council or municipality level. This does not always happen and costs often include management fees and other administrative costs with no recourse once tied to a contract.

How can I better manage my electricity?

Whether you are a postpaid consumer or you are considering switching to prepaid, Oxer’s can assist property managers and body corporates to find a tailored solution that suits their budget and their tenants wallets. We provide advisory services both on-site and virtually through our dedicated, in-house team. We analyse the physical site, as well as your municipal accounts to give comprehensive reports and advice.

We provide comprehensive fault reports with actionables. Readings are captured on-site and data is processed in-house to return meter readings and billing where we use a CRM system to handle all consumer queries.

Currently Oxer’s specialises in postpaid meter reading services and solutions however, we are looking at partnering with the right providers to bring a more cost-effective prepaid solution to South African electricity consumers. Need help with managing your utilities? Contact us today for peace of mind. support@oxers.co.za | 011 678 5461