Time-of-use energy pricing explained
As most households use their water and electricity before and after work, this creates a high-energy demand during the morning and evening periods. But if you can use your electricity at other times of the day, you may be able to save money as most energy retailers offer cheaper rates for off-peak energy usage.
What is time-of-use pricing?
Time-of-use pricing means that there are several different rates, depending on the time of day you use energy. According to the government’s energy website, prices are usually divided between peak (2pm–8pm weekdays), shoulder (7am–2pm and 8pm–10pm on weekends) and off-peak (all other times). Off-peak times are the least expensive.
There are two common ways to save money by using time-of-use pricing: off-peak hot water and smart metering.
Off-peak hot water
Hot water can account for a quarter of household energy use so switching your hot water system to an off-peak tariff can save you money. Off-peak storage hot water systems mean your water is only heated during off-peak time periods when the prices are cheaper.
Smart (interval) metering
If you’re finding that you use most of your electricity during off-peak and shoulder periods, it could be beneficial and cost-effective to install a smart meter (sometimes called interval meters). Smart meters measure your power usages in 30 minute intervals, which allows energy distributors to charge different rates rather than the one flat rate. The smart meters used today directly communicate to your distributor, meaning you don’t need someone to come read your meter, saving on set-up costs. Some smart meters have an in-home display or a web portal so you get a detailed picture of your energy use, meaning you can personalised your preferences to save you even more energy and money.
Remember when considering time-of-use pricing, you need to make sure you’re using it wisely. It’s possible that if you switch to off-peak rates but are still using more electricity during peak time, you’ll end up paying more. If you are interested in time-of-use pricing, contact your energy retailer to find out if it’s available.
Source: yourenergysavings.gov.au
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Understanding the “fine print” on your electricity bill
Tips to save energy in the kitchen
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