You did the smart thing. You got a battery, you're generating your own power and you're sending the excess back to the grid for a bit of cash. You're not just another household at the mercy of an energy retailer anymore. You're ahead of the game.
Trouble is, a battery doesn't make you immune to the loyalty tax. You've done the hard part, your bill's already dropped and switching feels like one more job you'll get to later. Retailers know all that, and they're counting on it.
Some battery owners already know this and switch plans every year to stay ahead. But even if you're across the basics, it's worth knowing exactly what the loyalty tax costs a battery owner, because it's more than most people think. And switching doesn't always fix it. More on that further down.
So what actually is the loyalty tax?
The loyalty tax is simple: traditonal energy retailers profit when you stop paying attention. Here’s how it works.
Energy retailers offer their best rates (and welcome offers!) to new customers to get them through the door - it’s a loss-leading strategy. Once you're in, those rates quietly get worse. The introductory discount expires. The feed-in tariff drops a few cents. The usage rate nudges up. They'll tell you when it happens, but most people don't notice, because who has time to read their energy bill that carefully?
The longer you stay, the worse your deal gets. The ACCC calls it the loyalty tax. Their research found that loyal energy customers pay around $221 more per year on average than people who switch regularly. That's not a mistake or an oversight. That's how traditional energy retail works and the only escape is to keep switching. Chase the next new-customer rate, then the next.
Amber is built differently, it doesn't set your rate. You pay wholesale, the same price the big retailers pay, plus a flat monthly subscription. You pay wholesale, the same price the big retailers pay. And our only margin is a flat $25 monthly subscription fee. No hidden margin on your rates, no cut of what you earn.
So unlike other retailers who benefit when you use more energy, we want your bill to be as low as possible - and when you sell energy back to the grid, we want you earning as much as possible too. When you buy cheap and sell high, that's a win for you. It's not a win for us when you miss it.
If you've got a battery, there's a bit more to it. Most battery owners are still on a plan they set up before they had one. The loyalty tax hits them in two places, not one, and the second one is easy to miss.
If you’ve got a battery, it’s worth a closer look
If you've got a home battery, you’ve got hardware installed that makes switching feel like a project you’ll eventually get to. A battery makes your setup more complex. There's a feed-in tariff to track, export rules to understand, maybe a VPP contract with complicated credits, on top of the usual usage rates. All that complexity makes switching feel like a job, and a traditional retailer is banking on you not wanting to deal with it.
You've already done the big job of buying and installing the system, your bill has dropped, and that drop is easy to read as "sorted". Working out your rates is fiddly, and figuring out what you could be getting for your battery elsewhere is fiddlier still. So you leave it.
And that's the part your retailer is quietly relying on. You enjoy the savings from buying less off the grid and reckon the job's done, so you never notice the dud rates they're charging on what you do buy, or the dud rates they're paying on what you sell back. You’re getting loyalty taxed twice - in both directions!
It doesn't help that most battery owners are still on a plan they set up before they had a battery. The rates and feed-in tariffs were built for a solar-only setup. The battery arrived, but the plan never got updated. The longer that goes on, the more your battery is underearning.
So the very thing that was meant to put you in control is also the thing that makes it easiest to leave you on a plan that no longer fits. If this sounds like you, you should probably work out what it's costing you and what to do about it, right?
What it actually costs a battery owner
For a battery owner, the loyalty tax has two sides instead of one, and that's what makes it easy to miss.
First, they get you on your imports
Your usage rates creep up over time while new customers get offered sharper ones. That's the same loyalty tax any household pays.
Then they get you on your exports
This next bit's all yours. Your feed-in tariff, the rate you're paid for energy your battery sends back to the grid, tends to get trimmed over time. Often with only five business days' notice, in an email that's easy to miss. Meanwhile, new customers might be offered a higher introductory feed-in rate to sign up.
Stack the two together and there are two rates drifting against you at once, not one. A non-battery household only feels the import side. The export side is where a lot of the quiet erosion happens, because feed-in tariffs get less attention than usage rates.
Over the life of a battery, that overpayment adds up. Money that should be shortening your payback period instead quietly pads your retailer's margin.
How to tell if it's happening to you
- Check your feed-in tariff first. What are you getting paid per kilowatt-hour for energy your battery sends to the grid? Now look at what your retailer is offering new customers right now. If yours is lower, that difference is your loyalty tax.
- Do the same with your usage rates. Pull up your most recent bill, find your peak and off-peak rates, and compare them against what's advertised on your retailer's own website today. You don't need to do complicated maths. If the new-customer number is lower than yours, there's your answer.
- Then ask yourself when you last actually reviewed your plan. If it's been more than a year and you haven't had that conversation with your retailer, there's a good chance your plan is working harder for them than it is for you.
Why the loyalty tax doesn’t exist at Amber
Amber doesn't make money by marking up the wholesale price. We charge a flat subscription fee and pass the wholesale price straight through to you. So when prices spike in the evening, the time your battery can sell what it stored during the day, you get paid that actual price, not a flat rate that treats you like a daytime solar home with nothing to offer after dark. When prices are low overnight, you charge your battery at that price instead.
That's the whole point of a battery on Amber. You buy low and sell high, and the difference between the two is yours to keep, not a margin your retailer keeps for themselves. The wider that difference, the more your battery earns, and every cent of it stays with you.
There's no hidden margin to pad or protect, so there's no reason to chip away at your rates over time. A customer who's been with Amber for three years gets access to the same wholesale price as someone who joined last week. The model doesn't depend on treating them differently.
That's also why switching, on its own, doesn't really fix the problem. If you change plans every year to chase a better rate, you know the drill. The new deal is good for a while, then it isn't, and you're back to comparing plans again. You're not fixing the loyalty tax, you're just resetting the clock on it. The only way out for good is a model that doesn't have the incentive built in to begin with - and a subscription fee that's upfront and visible, not hidden in a markup.
The loyalty tax isn't some villainous plot by one retailer. It's just what happens when a business makes its money by marking up the price it pays for power. As long as that markup exists, so does the temptation to quietly widen it on loyal customers. Take the markup away, and the whole thing falls apart.
So if you got a battery thinking you'd outsmarted the system, you're halfway there. The last step is making sure the plan underneath isn't quietly undoing your good work. Ten minutes with your bill might tell you everything's fine. Or it might tell you it hasn't been for quite a while.
Ready to stop second-guessing your plan? See how much your battery can earn on Amber.
