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⚡On-Peak vs. Off-Peak Electricity: Time of Use vs. Flat Rate?

What is On and Off-Peak Electricity in Australia?

In summary, On-Peak and Off-Peak periods are when the grid electrical demand is high (most expensive) or low (least expensive).
What time do on and off-peak periods occur?


What and when is On-Peak electricity time?
On-peak refers to the high energy demand hours throughout the day. These hours are 2pm-8pm in summer, and 5pm-9pm in winter.

What and when are Shoulder times?
Shoulder Times are 7am-2pm & 8pm-10pm in summer, and 7am-5pm & 9pm-10pm in winter.

What and when is Off-peak electricity time?
Off-peak electricity is when overall power consumption is low. Times consist of the remaining 10pm – 7am.


Time of use schedule - when is off peak electricity period

What's an Example of On-Peak Electricity?

When you arrive home from work on a summers’ day (let’s say 5pm), you will start to use power in the middle of an on-peak time where electricity will be most expensive to use. Cooking dinner, maybe the air-conditioner goes on, and you start watching your favourite tv show. All of these will be using peak electricity usage costs which will cost more compared to the shoulder or off-peak periods on a time-of-use tariff. A time-of-what?..


Understanding Different Electricity Tariffs - Which Tariff should you Pick?


Time of Use

This applies variable pricing at different times of the day, based on division between peak, shoulder, and off-peak periods. This suits people who: can easily manage their usage habits, are out mostly during weekday evenings and at home during the day and can use appliances on the weekends. You will also need to install a smart meter/time-of-use meter.

Single rate

On this rate, there is no on and off-peak electricity periods. This means you pay a flat-rate price at all-times of the day. This tariff is the perfect for those who are home a lot during weekday evenings, and for people wanting to use appliances during peak periods.

Controlled Load

This tariff refers to when an appliance is charged separately at its own stand-alone rate, and often has its own electricity meter. Every home will have at least one energy-hungry appliance, whether it be hot water heating, or a pool pump, or even floor heating to be used overnight or in off-peak periods.

Demand

On top of regular consumption and supply fees, Demand tariffs are based on the consumption intensity of your property at any point in time. Each energy retailer will have their own method of calculation like, your single highest demand period, your overall average, and different demand seasons. This tariff has been made to incentivise lower energy consumption in peak periods – the less you use in these periods, the cheaper your bill.



What’s the Price difference between Peak and Off-peak Electricity?

Pricing between Peak and Off-peak electricity can more than double, with peak electricity prices sitting at anything between 20c per kWh to 64c per kWh*.
Also note that this does not include the fees and supply charges.

This can give you billshock when opening your energy bill after your usage has been heavy, and the price of energy has been high.

Making a Difference in your Power Bill

When changing your consumption habits to take advantage of off-peak times, you will see an improvement over your bill depending on which tariff you are on.

If you are a single rate tariff, the pricing will be constant over any demand period.

*Energy Made Easy results for Time of Use tariff (off vs. on peak usage), Inc. GST. Search result of 'Thornton 2322, 2-3 person residential home on the 'Basic home' plan. Compare here.

On and Off peak electricity prices

Tips on using Off-peak Electricity to your Advantage

  • Delaying appliances that aren’t time-sensitive to start after 10pm such as dishwashers or pool pumps.
  • Charging your electric vehicle over-night instead of in the afternoon/early night.
  • Starting charging of your devices after 10pm will allow you to miss peak-electricity prices.
  • Hot Water heaters are typically already scheduled to turn on and run overnight.
  • Installing solar panels and battery storage can allow you to use a renewable energy buffer instead of expensive grid energy.
  • Ensure you are with the best energy provider
  • Check for additional energy and solar rebates


Are Smart Meters the Answer?

Smart Meters are essentially a tool that can be installed to allow properties to see accurate and clear data of their energy consumption, which allows the owner to make informed decisions about when and how long to use appliances.



What is Demand Response?

Demand response is a program that you can partake in where customers are paid to keep the electrical grid stable by balancing the supply and demand. It allows for a more balanced system and rewards participants for throttling consumption or for using more power in times of over-supply.

A great example would be a building with lots of refrigeration. The operator will notify the participant to limit electricity consumption, until a certain time in order to reduce the electrical load on the grid. They would do this by either turning the fridges off temporarily, and in the process the participant is rewarded for throttling their usage. 
The same thing happens when the system has too much supply and not enough demand, the participant would then be notified to turn all fridges up to soak up the generated energy and be paid for it.




Conclusion

With the transition to renewable energy happening, we will most likely see a higher rate of grid failures and higher grid energy costs as coal-fired power stations close across Australia. We believe now is the best time ever to invest in solar as rebates are still available (not for long), and the rapidly growing demand for grid security.

If you want to see if you’re on the cheapest energy plan, we recommend visiting ‘Energy Made Easy’ where you can simply compare energy plans, it’s great.


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