Some electric companies charge a deposit or an upfront payment in order to turn on the power to your home or business. Most people would prefer not to have to pay hundreds of dollars out of their pocket in advance.
Here’s how you can reduce or avoid paying a deposit to start your energy plan along with some tips if you're wondering why your power company is asking you to pay a deposit.
Electricity companies generally charge a deposit because they are trying to avoid potential shut-off for nonpayment. Since energy providers pay for the electricity you use in advance it means that if you don’t pay your bill they don’t get their money back.
When you sign up with a provider they will run a soft credit check as a way to gauge your creditworthiness. If your credit score isn’t within their threshold, or you don’t have enough credit history they will likely ask you to pay a deposit.
The average deposit for electricity is $150-$300 dollars for residential customers but can be much higher for businesses. Businesses use more electricity so energy companies will ask for a larger deposit because they are taking on more risk if you don’t pay your energy bill.
If you end up paying a deposit, it's not all for nothing. Your power provider will hold your deposit and after paying your bills on time for a number of months they will likely use your deposit as a bill credit.
Energy providers use different factors to determine if a customer requires a deposit to start service. Most companies have plans that do and do not require a deposit.
If you try signing up with one company and get asked to pay a deposit you can try another company to see if you better fit their guidelines.
If you need help avoiding a deposit for your electricity provider our support team can help you navigate the various plans available.
Some providers will allow you to pay a slightly higher electricity rate in exchange for avoiding a hefty deposit. But be careful, you may end up paying substantially more in total by taking the higher rate even if it's just a 1 cent difference.
If you are unsure what the best option is, contact our support team we’ll point you in the right direction. In most cases, we can eliminate or reduce your electricity deposit by finding plans that better fit your energy profile.
If you have a credit score of 600 or higher you will most likely not be asked to pay for an electricity deposit.
Additionally, If you are shopping for a business that is already established in a location and paid your electric bills on time you will probably not be asked to paid a deposit.
Even if you have a good credit score and wouldn’t normally have to pay a deposit for electricity you may be asked for a deposit to turn on your power the same day or the next day.
This is different than a traditional electric deposit because it’s a fee that you will not receive credit for on a future bill. Think of it as paying for next-day shipping. You are paying for convenience.
It can be hard to get an immediate start date set up with an energy provider. If you are desperate to get your power turned on contact our support team. They can get your energy turned on as quickly as possible and help you evaluate any fees.
Some companies offer prepaid energy plans that do not require a credit check or at least as strict of a check.
Prepaid plans mean that you pay for your energy before you use it. Similar to a gift card, you pre-pay for your electric bill then the provider debits your account as you use it.
Yes, anyone can get the power turned even with bad credit. While those with poor credit history may have to pay more or pay a deposit, in almost every scenario you can get your power turned on.
If you are having trouble finding a plan contact our support team who can walk you through everything you need to get your lights turned on.