With more smart meters being installed across the country, interest has piqued around the use of flexible pricing or time of use tariffs. But is jumping to a time of use tariff truly cheaper than staying on a single rate tariff?
In this article, Canstar Blue compares single rate vs time of use tariffs.
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What is a single rate tariff?
The main difference between a single rate and time of use tariff is the amount that is charged for electricity throughout set times of the day.
With a single rate tariff plan, there are no peak or off-peak periods, meaning you pay the same rate regardless of the time of day you use energy.
The rate is usually lower than the peak rates of a time-of-use tariff, although may be higher than off-peak rates. A single rate plan might be a good choice if you are at home a lot in the evenings on weekdays.
Unlike a time of use tariff plan single rate plans don’t require households to install and use a smart meter.
Compare single rate electricity plans
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
What is a time of use tariff?
A time-of-use tariff means the price of electricity changes at different times of the day. Periods of use are generally split into three categories:
- Peak: This is when electricity costs the most, typically in the evenings from Monday to Friday.
- Off-peak: This is when electricity is cheapest, typically overnight and on weekends.
- Shoulder: This rate is generally a bit cheaper than peak periods and usually applies between peak and off-peak periods.
Remember that in order to gain access to a time of use tariff households will need to have a smart meter installed at the property.
When are peak and off-peak electricity times?
Peak and off-peak electricity times will generally vary between Australia’s states and territories. However, as a general rule of thumb, off-peak times will operate between 10pm to 7am weekdays and weekends, while peak times are from 2pm to 8pm weekdays. Households may also be also charged ‘shoulder’ rates for times in between peak and off-peak.
Some states may also offer a transitional time of use tariff, in which case peak and off-peak electricity times vary across the summer and winter months.
Time of use vs single rate electricity tariff: Which is cheaper?
Ultimately, the cheaper tariff type will depend on how and when you use electricity, as well as where you’re located and the plan and provider you opt for. However, there’s a few things to be aware of across various states:
South Australia
South Australians have some of the longest peak periods available on time of use tariffs, generally running from 12am to 1am, 6am to 10am and 3pm to 12am every day.
Victoria
The situation in Victoria is a little different to the other states. Smart meters should now be found in all homes across Victoria, so energy retailers have had time to refine their time of use tariff structures and prices. Time of use tariffs in Victoria do not have a shoulder period (unlike flexible pricing tariffs), only peak and off-peak, with peak times running from 3pm to 9pm weekdays, and off-peak rates applying at all other times.
How can I get the most out of a time of use tariff?
Use electricity during off-peak times
For a time of use tariff to have a serious impact on your household energy bills, you’ll need to change your energy habits. At least half, if not more, of your energy usage will need to occur during off-peak or shoulder periods to see a reduction in electricity costs.
Store your own power for peak times
This could involve using solar panels or a battery, to generate and store your own energy for use at home as needed. With this option, you could save your solar power for peak times and only use power from the grid during cheaper, off-peak periods.
Invest in a power consumption meter
If you are committed to a time of use tariff, a power consumption meter or energy monitor might help you track your energy usage. These devices can detect when and where you are using the most energy, which can help you adjust your habits to better suit your tariff. For example, you may find that running the washing machine in the evening is costing you more than using it in the early morning.
Should I sign up to a time of use tariff?
Whether a time of use tariff will suit your household depends on your energy usage and habits. For larger households with high energy consumption or those primarily using power during the early evening, a time of use tariff may not be best fit.
However, households that consume most of their power during the day, or can use stored solar power with a battery, might see some bill savings with this tariff.
Keep in mind that simply switching to a time of use tariff = won’t automatically reduce your energy bills, especially if you are still using most of your electricity during peak times. You’ll need to keep an eye on your usage and ensure your energy habits align with the cheaper times of your tariff.
No matter the tariff you are on, it’s always wise to regularly compare plans, providers and prices in your area, to ensure you are getting a good deal on electricity.
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