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Is Prepaid Electricity the right electricity plan for you?

By powerwizard

What Is A Prepaid Electricity Plan?

What is prepaid electricity

You’re a straightforward person. You like black coffee, you like your furniture to be natural wood, and you always buy the lowest priced gas. 

So you bet you want your electricity plan to be straightforward. But these days, buying electricity in Texas feels like buying coffee at one of those hipster coffee shops where all the sizes have weird names and they look at you funny if you ask for a regular coffee.

Fortunately, Power Wizard has created a tool for the straightforward among us. 

This Shopping Tool finds the lowest electricity price.

It’s just that simple.

Let us find you the best plan in seconds and start saving.

Emily and Scott are newlyweds. They are fresh out of college and have hopes and dreams for their future together. They have a small budget but were able to find a small two-bedroom home to rent from Emily’s aunt.

Emily and Scott don’t exactly have bad credit, but they have very little credit. Which can also be a problem.

They need to find an electricity provider and a plan that works best for them and their current situation.

A friend told them about prepaid electricity plans. They wonder if that could be the best fit for their little bungalow.

But, what is a prepaid electricity plan?

A prepaid electricity plan is a plan that allows you to pay for a certain amount of electricity ahead of time.

You can compare a prepaid electricity plan to a prepaid cell phone service.

You pay for a certain number of cell phone minutes instead of a locked-in rate. Let’s say that you pay for 100 minutes. Once you hit the 100 minutes, that’s it. You either stop using your phone, or you add more minutes.

Prepaid electricity in Texas is a lot like that.

As you use the prepaid electricity, you’ll need to add more funds “as you go” to continue receiving service. You can just add more money to your account using your smartphone.

How Does Prepaid Electricity Work?

For those of you in Texas who have deregulated electricity, having a prepaid electricity plan means that you don’t have a monthly bill.

Pretty cool, right?

You pay before you use it. You have control of your electricity.

Your electricity use will be monitored daily. You’ll always know how much electricity you’re using. You’ll know how much it costs, and how much credit is left on your account with daily alerts.

Your alerts might look something like this:

Kilowatt-hours consumed for the day: 38.6

Remaining balance: $62.59

Savings for the day: $.95

Detailed alerts help you avoid stressful and not-so-pleasant surprises with your bill. You can even opt in to automatic reloads for added peace of mind.

You have a choice in your electricity plan, so let’s jump into the advantages and disadvantages of this plan so that you can make the best decision for your home.

What is prepaid electricity

Advantages of Prepaid Electricity

Many customers love the personal control that this plan offers. Like with most things in life, there are both advantages and disadvantages. The right choice depends on your budget and unique energy needs.

A prepaid electricity plan is a popular option for many customers.

Advantage #1: No Credit Check

Many of the prepaid plans don’t require a credit check. This is an excellent option for those who are young and haven’t yet established enough credit.

Likewise, if your credit isn’t necessarily in the “green,” you don’t have to worry about being turned down for a great energy plan or being made to pay a hefty deposit.

Advantage #2: Say Goodbye to Long-Term Contracts

Just like with the prepaid cell phone service that we talked about above, most prepaid electricity plans don’t make you sign any kind of long-term commitment.

Advantage #3: Budget-Friendly

For those of us who are budget conscious, this plan often relieves a lot of stress and anxiety. You have control of how much you spend each month on your energy usage.

Advantage #4: Lower Energy Consumption

This plan is perfect for those who like to closely monitor how much energy they use for the sake of the environment.

Because you have to be mindful of how much energy you’re using, most customers naturally use less energy. It’s a win-win for you and the planet.

Disadvantages of Prepaid Electricity

While choosing a prepaid electricity plan is the perfect option for some customers, it does have a few disadvantages.

For you, it might not be the best option. Don’t worry, we can help you determine which plan is the best for you.

Disadvantage #1: They Get You With the Fees

While you might not have to pay a deposit or have any upfront costs, these plans usually have higher rates per kWh and variable rates may increase your rate as well.

Let us find you the best plan in seconds and start saving.

Disadvantage #2: You Can’t Take Your Eye Off the “Ball”

When you’re using a prepaid meter (we’ll get to that in a bit), you must keep track of your credit balance.

While you’re given apps and online tools to help you monitor this, it’s still up to you to make sure that you always have enough balance to avoid disconnection and fees.

Planning a vacation? Make sure that you load enough credits to take care of the energy usage that your home will use while you’re away.

Hopefully, your home isn’t throwing a rave party without you.

Who Prepaid Electricity Is For

Prepaid electricity is a great choice for individuals and businesses who want to enjoy freedom in how they receive their electricity. These customers love being in charge of their usage.

This plan is also a choice for those:

  • Who have little credit
    • Are you just starting out in life? This might be a great choice for you.
  • Who have a lower credit score
    • It happens. This plan will help you avoid a high deposit.
  • Who wants to avoid a credit check
    • Are you waiting on a house to close? Or maybe you just don’t want anyone to know your business.
  • On a fixed income
    • Is it possible to manage an ever-changing energy bill? With a prepaid plan, you won’t have to worry about that.
  • Who want to save money
    • Prepaid electricity may save you money.
What is prepaid electricity

Prepaid Vs. Contract Electricity Plans

While a prepaid plan might be the best choice for you, it’s not the only choice.

Some plans are contract plans.

The types of plans that can have contracts are:

There are hundreds of companies and plans to sift through while trying to find the right one for your home. You’ll want to shop around to make sure that you get one that fits your unique needs the best.

How is a Contract Plan Different From a Prepaid Electricity Plan?

We have already discussed prepaid electricity plans, what they are, and who they are for.

Remember that on a prepaid plan, you choose how much you want to pay at the beginning of each month in exchange for that amount of electricity. You add money to your balance as needed.

No credit check, deposit, or uncertainty.

How is a contract plan different?

On a contract plan, you pay after you’ve used the electricity. You pay for the previous month.

Remember that on a prepaid plan, you pay for a certain amount of electricity per month. Be careful to use only that amount of electricity. If you want to use more than what you paid for, you’ll need to pay more to keep your electricity on.

You’ll have a credit check. You might have a deposit. The bill will fluctuate.

Let us find you the best plan in seconds and start saving.

How Much Does Prepaid Electricity Cost?

The cheapest plans may not be the best fit, and it’s important to consider many factors such as:

  • Home size
  • Age of home
  • Usage
  • Contract length
  • Fees
  • Location

Only once all of these factors are taken into consideration, and compared against every electricity plan available in your area, can you find which plan will be the best for you and how much it will cost.

Let’s take a look at some of the averages to give you a rough idea.

The Cost Of Prepaid Electricity

You might wonder, “What is the cost of prepaid electricity per unit?”

Having a prepayment meter doesn’t always mean that you are paying the lowest price for your energy. The cost of prepaid electricity per unit might even be more expensive. The cheapest energy offered by suppliers is sometimes not made available to prepay customers.

For customers living in the deregulated areas of Texas, you will have several options to choose from. Each REP (Retail Electric Provider) may offer different prepaid plan options.

The average residential electricity rate in Texas fluctuates depending on many factors like the:

  • Current market
  • Supply
  • Demand
  • Gas Storage
  • Weather forecasts
  • Imports and exports
  • Global markets
  • Government regulations
  • And more

You will want to make sure that you keep at least the required balance minimum in your account to avoid disconnection and fees. Adding automatic reloads will help you avoid these annoying and stressful problems.

You will need to carefully examine each company and plan to find the one that works best for you. This takes a huge time commitment unless you have help.

What Is The Cheapest Way To Buy Prepaid Electricity?

How can you know what plan is best for you? You don’t want to end up paying more than you need to.

There are a few ways to find the best plan.

Two ways are:

Manually Search

This is just how it sounds.

This is you spending hours to days combing through every company out there that services your area. And this is you then searching through every plan that each company offers.

Even if you think that a prepaid electricity plan is what you need for your home, it’s always best practice to look at all of the available plans.

Do you really want to spend hours to days searching for the perfect plan for your home, or do you have more important things to do?

Let Someone Else Do the Work

Texas electricity customers have it better than ever before. For those who have deregulated energy, there are now energy shopping sites.

Power Wizard uses in-depth analysis to match your unique energy usage to a great plan for you.

We also use advanced technology and a special algorithm to match you with the best plan available on the market.

It takes less than 5 minutes to simply add your zip code to our unbiased tool to get started and then let us take over the work for you.

We work for you, the customer, and we keep working for you.

This lets you sit back, relax, and enjoy the more important things in life.

How An Electricity Company Tracks Usage For Your Prepaid Plan

You’ve either searched manually, or you’ve allowed our site to help you choose.

If a prepaid plan is exactly what you need, you might be wondering, “How does the electricity company track my usage?”

It’s quite simple, at least from your end.

You’ll have to get a special meter that we’ll take about in a minute. That meter keeps track of everything for you.

Most customers use a special app on their phones. This app allows you to see your usage and your balance and allows you to add money to your balance. It’s all updated daily for you.

There are other great features, but those are the basics.

You don’t have a smartphone? That’s OK. You can get the same information from your computer.

“Topping off” from your phone or computer is convenient.

There are other options as well like recognized PayPoint or Payzone shops, and even at the Post Office.

What Is A Prepaid Electricity Meter?

A prepaid electricity plan requires that you have a prepaid meter, or smart meter.

Prepaid meters work by helping customers keep track of their electricity usage.

They can count the flow of electricity used in KwH. They are now capable of broadcasting your energy consumption data directly to your electricity provider using radio waves. That’s pretty cool.

Still, have questions about your prepaid meter or if a prepaid electricity plan is right for you? Power Wizard is here for you.

Let us find you the best plan in seconds and start saving.

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