Do energy providers lock you into a contract?

If you’re shopping around for a new electricity or gas plan in Australia, one of the most important questions to ask is: will I be locked into a contract?

The answer depends on the provider and the specific plan, but in recent years, more retailers have shifted towards flexible, no lock-in energy plans in response to consumer demand.

This article explores how energy contracts work, the differences between fixed-term and no-contract plans, and which Australian energy providers offer flexible options.

What is a lock-in contract in energy plans?

A lock-in contract means you agree to stay with an energy provider for a set period - usually 12 or 24 months. If you decide to cancel or switch providers before the contract ends, you may be charged an early termination fee, also known as an exit fee.

These types of contracts were more common in the past, but many modern energy plans now focus on no lock-in terms, allowing customers to move freely between providers without financial penalty.

Types of energy contracts in Australia

There are two main types of energy contracts:

Market offers

These are plans set by retailers and can include discounts, incentives, or bonus features. Market offers may or may not have a contract term attached. While some providers still include exit fees in market offers, most now offer flexible, no lock-in plans.

Standard retail contracts

These are regulated by the government and come with basic terms and conditions. They don’t usually include exit fees, making them a safer choice for customers who want stability without restrictions - but they may not offer the most competitive rates.

Why some energy providers still use lock-in contracts

Although many energy providers have moved away from strict contracts, some still offer fixed-term agreements with added perks - like bill credits, discounts, or fixed rates for a set duration. These benefits can be attractive for customers who want cost certainty, especially during periods of rising energy prices.

However, these plans may carry exit fees if you leave early, which can range from $20 to $150 depending on the provider and state.

Pros and cons of lock-in energy contracts

Pros:

  • Often come with upfront discounts or sign-up bonuses
  • May offer fixed rates for 12–24 months, protecting you from price increases
  • Some include bundled offers (e.g., solar, gas, or Internet)

Cons:

  • Exit fees if you switch before the end of the term
  • Less flexibility to move with better market deals
  • You may miss out on lower prices if wholesale energy rates drop

Which Australian energy providers offer flexible plans?

Here’s a breakdown of popular Australian energy providers and whether they offer no lock-in contracts or plans with fixed terms.

AGL

AGL’s Value Saver and Net Zero plans typically have no exit fees, making it easy to switch if you find a better offer. They focus on monthly billing and online account management, with contract-free flexibility.

EnergyAustralia

EnergyAustralia offers both fixed and flexible plans. The Total Plan Flexi is a popular no lock-in option, while other plans may offer fixed rates over 12 months with conditional benefits.

Red Energy

Red Energy promotes simple, no lock-in contracts across most plans. Customers also enjoy local customer service and can opt into Qantas Frequent Flyer points or GreenPower.

Tango Energy

Tango often offers fixed rate plans for 12 months, which usually don’t include exit fees, but do require you to agree to a set price for a year. Good for those looking for pricing stability, especially in Victoria.

Powershop

Powershop stands out with a unique energy model. While technically on a variable rate, customers can pre-purchase discounted energy “packs.” There’s no lock-in contract, and switching is allowed anytime.

Origin Energy

Most of Origin’s plans are no lock-in, such as the Everyday Rewards and Flexi options. They may include loyalty perks or bonus points without binding you to a long-term contract.

Simply Energy

Simply Energy offers both contract-free and fixed-term plans, often bundled with rewards like movie vouchers or AFL/NRL memberships. Their variable rate plans usually do not include exit fees.

ReAmped Energy

ReAmped promotes itself as a low-cost, no lock-in provider. Plans are straightforward, digitally managed, and come without any contract restrictions or early exit fees.

How to find the right energy plan for your situation

When comparing energy plans, ask yourself:

  • Do I plan to stay in this home for the next 12–24 months?
  • Am I comfortable committing to a fixed term in exchange for upfront savings?
  • Would I rather have the flexibility to switch providers if a better rate comes up?

If you prefer freedom to move or are renting short-term, a no lock-in plan is usually the safest option.

Flexibility is key

While lock-in contracts still exist in Australia’s energy market, most major providers now offer contract-free plans with competitive rates. Whether you're after long-term rate security or the freedom to shop around, there are plenty of options to suit every household and budget.

Just remember to read the terms and conditions carefully before signing up - especially around exit fees, rate changes, and any bonus offers that might require staying on the plan for a minimum period.

Need help navigating energy plans and contract terms? Speak to the experts who compare the best offers for you.

Call Compare Energy on 1300 790 106 today to find a flexible energy plan that works for your lifestyle - without the stress of long-term contracts.