Companies across many industries use sales, promotions, and incentives to advertise and attract new customers — electric companies in deregulated states are no different.
Many homes and businesses across the United States benefit from having the option to choose an electricity provider. Of course, after the initial 3-month, 6 month, 12-month plan, etc. contract has expired with one provider, a home or business can switch to another provider offering services in that area.
Since switching electricity companies is fairly easy, most providers offer different types of incentives to try and attract a competitor’s customers. But first things first. Before we get into the types of incentives electricity providers offer, let’s review the benefits of electricity deregulation and electricity providers.
Why Switch Electricity Providers?
Part of finding the right electricity provider requires you to investigate and learn more about the plans and services offered by that company. But what if you already have an electricity provider and you want to switch to a new one?
There are many reasons why you might want to switch electricity providers. Some reasons include:
Greener Energy Options: With the rise of solar and wind power technologies, consumers are becoming a little more environmentally friendly when it comes to the electricity they consume. If the consumer’s current electricity provider does not have any green energy plans, it is a common reason why they will switch to one that does.
Better Rates: Electricity rates constantly change and some electricity providers offer lower rates than others. Switching to a lower rate plan can often save a consumer on their monthly invoice. However, it is highly recommended to thoroughly read and understand the details of a lower rate plan. In some cases, if it looks to good to be true, it likely is.
Plan Change: Many electricity providers offer plans with variable rates. As a result, their bill is often higher than expected. Consumers can often decide to change to a different provider to take advantage of things like fixed rate plan options.
Common Provider Incentives
There are many electricity provider that offer different types of incentives to try and attract potential customers. These incentives include:
Satisfaction Guaranteed: To gain a consumer’s trust, an electricity provider will offer, “guaranteed satisfaction”. This means that the customer can try out the electricity provider’s services for a particular number of days (or months). If they are not happy with the service during that time, they can switch to a different provider– without the costly cancellation fee.
Pay to Switch: While this incentive isn’t as popular as others, some electricity providers will pay a consumer to switch to their services. In some situations, the consumer will need to remain a customer for a particular period of time in order to receive the cash.
Loyalty Rewards: Electricity providers will offer different rewards for retaining a consumer’s services. These rewards can range from a points based system (where points are collected and redeemed for a gift, etc.) to pre-paid balances and credits.
Friend & Family: This incentive is a kind of extension of loyalty rewards. Some electricity providers will offer cash or credits if the consumer introduces friends and family to the electricity provider.
Cancellation Credits: Many electricity provider plans come with cancellation fees. These fees can be quite hefty, and try to make customer’s think twice about cancelling a contract before its end date. To help encourage the customer to switch, some electricity providers will offer to cover the cost of the cancellation fee. As you can imagine, this offer would be rather tempting for a consumer desperate to leave their current contract.
Types of Promotions and Incentives
The incentives and promotions offered by electricity providers are different than the energy incentives offered by the government or state.
Electricity providers offer incentives solely to tempt potential customers into switching from their current provider. This is why some electricity providers will offer cancellation credits. They try to ease any fees associated with switching so that the customer feels comfortable with the decision.
Government or state incentives help the consumer in a different way. These types of incentives often involve credits or rebates for purchasing energy efficient appliances, or switching to energy efficient bulbs. Overall, consumers will see savings in the form of a reduced monthly bill but the saving are related to making changes in how the electricity is consumed.
Examples of Current Offers from Power Companies
To provide some context of the type of incentives electricity providers offer, here are a few examples:
Direct Energy: Consumers in the military will receive a discount on their electricity. In addition, consumers that refer friends or family will also receive rewards.
Ambit Energy: This electricity provider offers a travel rewards program. Consumers can collect travel points per kWh consumed. Points can also be collected if the consumer refers friends or family. Travel includes, golf passes, spa treatments, cruises and vacations.
First Choice Power: When a customer refers a friend to First Choice Power, the electricity provider will receive a $25 credit on their next bill.
Is it Worth Signing Up for Incentives?
In many cases, the incentives offered by an electricity provider don’t really impact the day-to-day or month-to-month rates a consumer pays. Therefore, you might not have to pay your cancellation fees, but you could end up spending more per month on electricity. As always, it is critical to read through all of the information associated to any plan or service you sign up for. That way, when it comes to the additional rewards, they become benefits instead of a one time incentive.
Overall, with energy deregulation and the incentives offered by the electricity suppliers, the power remains in your hands. You have the power to choose the company that best matches your energy and budget needs.