Millions of households face higher energy bills this year as a result of stay-at-home orders, but there are ways to soften the blow.

Where workers once spent eight hours a day in offices that their employers paid to run, now they spend that time working from living rooms, kitchens and bedrooms.

The Australian Taxation Office has responded by offering to deduct from our tax bill 80 cents for every hour worked from home, a measure that runs until September 30.

But Australians nonetheless have to cover the costs up front, with data from provider Jemena suggesting household energy usage is up 16 per cent on this time last year.

So, beyond minimising usage where possible, how else can we prepare for a big energy bill?

1. Set up a separate savings account for bills

Despite many households using the pandemic to implement new savings habits, the traditional surge in energy usage over winter will be accompanied by rising costs elsewhere.

Canstar Blue, for example, suggests using a desktop computer for eight hours a day could add more than $2 per fortnight to a household energy bill, which is why households should prepare for a larger bill.

First up: Consider setting up a separate savings account for monthly household expenses.

“After reviewing your bills, set up a savings accounts so you can deposit the required amount as soon as you get paid and organise for your direct debits to come out of there,” Mozo spokesperson Gemma Rasmussen told The New Daily.

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That way, you will be less likely to spend that money elsewhere.

Finder.com.au managing editor Kate Browne said the open banking revolution and the rise of neo banks now allow customers to set up a savings account in as little as 10 to 15 minutes.

“Unfortunately it’s hard to find a high-interest savings account currently because interest rates are quite low,” Ms Browne told The New Daily. 

“But by putting that money aside and combining that with expenses tracking through an app, where you can set up regular reminders and notifications, you’re going to have fewer surprises on your hands.”

Automating bills is a good idea, too. This will help you avoid late payment fees if you forget about paying one.

2. Consider ‘bill smoothing’ options

Beyond budgeting, some providers (you can find a full list here) have ‘bill smoothing’ mechanisms that allow households to pay bills in smaller, more frequent instalments, rather than in one lump sum.

And there are two ways to negotiate a plan.

Customers can sign up to a formal agreement, with a provider calculating payments (weekly, fortnightly or monthly) by predicting the household’s energy usage based on their past 12 months.

If that forecast exceeds the household’s actual usage, customers are then ahead on their payments in the next quarter.

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Finder’s Ms Browne said there’s one pitfall if the opposite occurs, though.

“If energy usage is greater than anticipated, households will be left with a settlement bill at the end of the year to account for any additional costs, which is crucial considering the dramatic lifestyle changes people have made,” Ms Browne said.

Households can also make smaller informal payments by setting up BPay deposits.

And for those receiving government benefits, bill payments can be co-ordinated through Centrepay, which deducts regular expenses from Centrelink payments.

3. Shop around for major savings

Although competition is at unprecedented levels in many state markets, the Australian Energy Market Commission recently found that only one in five households over the past year actually made a switch.

Mozo’s Ms Rasmussen said the average Australian family who uses 4000 kilowatts per hour could save about $350 per year by shifting to the cheapest market offer.

But Ms Browne said households would still benefit by calling their existing provider.

“Providers often rely on what they call ‘sleeping beauties’, who are quiet customers who never negotiate a better deal,” Ms Browne said.

“Customers should reassess every six months to capitalise on changes as they can be hard to read in bills deliberately designed to confound us, but are much easier to identify through comparison apps and other kinds of technology.”