Looking for a power retailer accepting bad credit? Or to sign up without the hassle of an invasive credit check?
Only a couple of years ago you would have been limited to the big players. Thankfully this is no longer the case.
The large retailer offerings are fairer, and there is a growing number of smaller, more nimble and often cheaper prepay companies to choose from. The market is increasingly focusing on better serving, rather than penalising, prepay customers.
Why Choose Prepay Power?
Switching to prepay power can help households manage their electricity spend and avoid an unexpectedly high power bill at the end of the month.
Operating in a similar way to prepay mobile phones, customers top up their power account and then keep track of the balance. When the first innovative prepay options were introduced, the press was pretty positive.
For most customers, this provides an incentive to actively monitor energy usage within the home. Keeping an eye on your power usage should lead to lower power usage over time and cheaper bills.
Additionally, the flexibility of top-up options can help to spread the cost of power over time.
This presentation from the Christchurch Housing Forum summarises many of the benefits of prepay power, although it is pushing one product.
At the end of 2014, there were around 31,000 prepay customers in NZ. This jumped by 40% during 2015 to more than 43,000 customers choosing to prepay, or around 2.5% of all NZ residential connections.
The Downsides of Prepaid Power?
Although there is now a greater choice in prepay power companies, there are still a number of downsides to consider.
The major downside is that by going prepay your choice of providers will be limited and you may not be able to get the cheapest power deal available.
In the instance that you have a prepay meter that only supports one retailer, you may also be locked to that retailer. You may not be able to switch retailer without also replacing your physical power meter.
Another argument against prepay meters is that they contribute towards ‘fuel poverty’ where households will cut back on heating for fear running out of prepaid money.
I understand this, but what is worse – not using power, or using power you can’t afford and running up debt?
I would prefer that households can afford their power, and actively make decisions to cut their electricity usage. For example, using energy efficient lighting, insulating (or convincing their landlord to insulate) and using other forms of heating like a wood burner.
No Other Option
If you have previously had your power disconnected, have bad credit or are looking for power companies with no credit check – then prepay power may also be your only option for now.
Alternatively, if you move into a rental where the landlord or previous tenant have installed a prepay meter, then you may only have prepaid power as an option. Changing a dedicated prepaid meter is an option, but would typically require landlord approval and cost between $100 – $250 to change.
While I think pinning ‘fuel poverty’ on prepay meters is sensationalist, I do agree that businesses need to be careful to avoid taking advantage of prepay customers. Especially where a customer is locked into a specific meter and has limited or no option to switch retailers.
While compulsory customers may be an attractive segment of the market, there are social and reputational consequences. Mercury, previously Mighty River Power, has taken repeated flack in recent years. Validly or not, you don’t want to be in the press.
Prepaid Power and Gas
Prepay – Retailer Winners and Losers
A number of the larger power companies have moved away from prepay. This has made way for new retailers to enter the market.
Meridian is no longer offering their PowerManager Prepay option for new customers and suggest to check out Glo-Bug.
Genesis Energy also no longer offering their InCharge PrePay for new customers, however, if you are moving into a property with an InCharge meter you can still sign up.
Glo-bug, the Mercury Energy owned prepay option experienced significant growth from 2014 to 2015 but has since been steadily losing customers.
The most dominant new entry is Wise Prepay, owned by Hunet Energy.
The chart below shows in green the growth and subsequent decline in Globug connections, although Globug still has the largest number of prepay customers nationwide at around 28,000. The chart also shows in blue the growth of Wise Prepay.
Power Companies with No Credit Check
The following is a list of prepay power companies with no credit check, suitable for customers with bad credit or wishing to manage their power differently.
Large power generator and retailer. Offer standard and prepay connections.
Electricity is paid for up front (like a prepaid mobile), usage can be tracked on the Contact website or via a mobile phone app. You can build up credit during the warmer months to use over winter.
Most importantly, electricity rates are the same as they normally are and prepay customers always get the full prompt payment discount.
Update June 2018: A number of readers have informed me that Contact no longer offer prepay energy options to new customers
Update Sept 2018: Contact have just released a revamped prepay offering for new customers! See the link above to the Contact website to check it out.
Moderately sized electricity retailer specialising in prepay power. Owned by the large generator and retailer Mercury Energy.
View your balance and top-up via mobile phone, or with a green GLOBUG payment card thousands of outlets such as dairies, i-sites and bookshops.
Notifications are given via the Globug app and text message (if opted in) 36 hours and 12 hours before credit runs out. Power is disconnected if balance runs out, but there is no charge for dis/reconnections.
Top-up locations seem to be plentiful, but some locations such as liquor stores may not be appropriate for all.
One interesting aspect about Globug, is that it may be helpful if you have existing outstanding debt with Meridian Energy, Mercury Energy, Tiny Mighty Power or Contact Energy. There are agreements in place that allow you to transfer to Globug, and the debt is paid off over time without incurring penalty fees or interest. An extra amount is added to every topup made (25% in summer, 10% in winter months) which goes towards the debt.
Moderately sized electricity retailer, owned by Meridian Energy, with a business model based upon heavy online user interaction and operating a pre-pay-ish payment model (more on this below).
Power is purchased online and regular ‘specials’ are offered to encourage the advance purchase of power units. Powershop fans report lower power prices than a traditional retailer, as long as the monthly Simple Saver Powerpacks and Special Powerpacks are purchased when available.
Power prices will fluctuate during the year to reflect the change in the average wholesale power price during the year. Typically winter months being more expensive than the summer months, when power prices are cheaper.
Powershop have confirmed they do undertake credit checks for new customers as part of the signup process.
Prepay or Not?
The official Powershop line is that they are a postpaid electricity retailer, using a standard meter onsite to record usage and billing for end at the end of the month.
“Where we differ, is that we offer our customers discounted electricity in the form of ‘Powerpacks’ – an excellent way to save money by buying in advance, plus, you won’t lose supply if you do not buy in advance.”
Why I consider them a ‘prepay-ish’ retailer is purchasing the discounted ‘Powerpacks’ inevitably means buying electricity to use in the future.
I personally don’t think being a prepay retailer is a bad thing, as customers are able to purchase power with smaller payments and can be more aware of what they are spending day-to-day.
Powershop offer a $150 signup credit, applied over the first three months.
Residential & Business: firstname.lastname@example.org
Large power generator and retailer. Offer standard and prepay connections.
Update October 2017: Trustpower have been in touch and confirmed that they no longer offer prepay power options 🙁
Small electricity retailer specialising in prepay power, associated with Hunet Energy.
View your balance and top-up via mobile phone, or retail outlets. Unlike Globug, Wise Prepay is available for any property with a newer smart meter (as long as you are in their coverage area) and doesn’t require a special prepay only meter.
No deposit, credit check or fixed contract applies.
** Currently only servicing the Auckland, Waikato, Rotorua, Taupo and Hawke’s Bay areas **
(Thanks to Sam for letting me know about Rotorua, Taupo and HB!)
Update – One Minute Help!
If you are an existing Prepay customer, I would really appreciate you filling out the following 1-page survey: Prepay Power Survey
It’ll take about one minute and lets me know your prepay experience. Thanks a lot, Nathan.
List updated September 2018. If you discover any other prepaid power company options, errors or omissions please let me know via the contact form.