Advantages and disadvantages of prepaid electricity
Should you prepay for your electricity?
The pay-as-you-go model is most commonly associated with the cell phone industry—the prepaid system that allows consumers to go contract-free in a world typically consumed by 12-month, impossible-to-break contracts.Interestingly, the energy industry is also rife with unbreakable contracts, but you don’t often hear people talking about their prepaid electricity.Unless you’re in Texas. There are a lot of options in Texas. A lot of options. Some of those options are prepaid payment plans. But when you’re choosing electricity in Texas, you have enough overwhelming options without worrying about the payment method.Don’t worry. We can clear that one up for you.
Prepaid electricity: the perks.
So why pay-as-you-go? Here are some of the benefits:
- No added billing costs. Pay-as-you-go billing is inherently simpler than contract plans. With more traditional plans, there are tons of billing and collections costs that go straight to you, the consumer, to pay. So if your electric provider wants to save you some money, they might offer a prepaid plan.
- No credit checks and no deposits. With pay-as-you-go models, anyone can join. It’s far less hassle when you sign up, because you don’t have to worry about expensive deposits, annoying credit checks, or lengthy approval processes.
- No more bill shock. Perhaps the biggest perk of all is that with prepaid electricity, you don’t get a bill at the end of the month that sends you through the roof with shock and anger at its high price tag. When you’re paying for electricity as you use it, you know what you’re paying every single day.
- You can manage your usage. With Griddy, you get to see real-time prices at all times, so you can manage your usage as the prices change.
Prepaid electricity: the downsides.
Here are some considerations on the opposite end:
- You have to keep a minimum account balance. With pay-as-you-go models, you have to keep a minimum account balance so that there’s something to be debited as you use electricity. With some providers that have manual refill policies, this could be a huge disadvantage. With Griddy, this fortunately isn’t an issue. Each member gets to choose a custom Recharge Amount, and as soon as your account hits the minimum, you’re automatically recharged.
- You have to pay in advance. This is obvious, as it’s part of the name, but for some, it can be a disadvantage to fill their account before using the electricity. However, keep in mind that with Griddy, your account is debited as you use electricity, and if you happen to cancel before using up your account balance, you’re refunded any remaining funds in your account. So even though you’re putting money into your account in advance, you’re actually not paying for electricity until you use it.
Why we like the prepaid electricity model.
Griddy brings consumers direct access to real-time electricity prices. Our entire platform is based on the idea of transparency—we’re anti-markup, anti-hidden fees, and anti-deception—so the prepaid model, being an upfront, contract-free system, works really well.Here’s why:Through our smart energy tools, you’re able to see prices as they change, so you know exactly what you’re paying at any given moment. With the old electricity model, you would get a massive bill at the end of the month, and you would have no idea why it was so much more expensive than last month.Since we’re giving you the real-time prices—the prices all electric providers pay for electricity (pre-markup)—we wanted to make sure you could pay for them in real time. That way, you’re actually able to manage your consumption. It’s simple: You see what it’s going to cost, and you pay (or get paid!) right away. What you see is what you get. And in the end, aside from being incredibly simple and straightforward, the Griddy real-time electricity + pay-as-you-go model will save you tons of money on your electricity.