Time-of-use versus single-rate tariffs

Most people still talk about "the" electricity rate, as if there were one. On a single-rate (flat) tariff there is: every kilowatt hour from the grid costs the same at 2 am and at 6 pm. On a time-of-use tariff the clock is the price list. Evening cooking can cost two or three times what a midday dishwasher costs. The plan is not automatically better or worse. It is a bet that your household can use the cheap hours, or already does.

Networks like time-of-use because the grid is tight in the late afternoon, when rooftop solar drops away and households switch on heating, cooling and ovens. They like it even more when cheap midday rates pull demand into the solar glut. Retailers pass those network shapes through, sometimes faithfully, sometimes with their own peak windows. Your job is to match the shape to the house, not to pick the lowest peak rate in an advertisement.

Peak, shoulder and off-peak

A typical time-of-use structure has three bands. Names vary. The idea does not.

• Peak is the expensive window. On many networks it is late afternoon into the evening on weekdays. Some networks also treat winter mornings as peak. This is when a heat pump, a cooktop and an EV charger can stack.
• Shoulder is the middle price. It often covers daytime outside the solar trough, or evenings that are not quite peak. Some plans skip shoulder and jump from peak to off-peak.
• Off-peak is the cheap window. Overnight is the traditional off-peak. Increasingly, the middle of a sunny weekday is cheap as well, because the grid is heavy with rooftop solar.

Weekends are often cheaper than weekdays. Public holidays sometimes follow the Sunday schedule. None of this is standardised nationally. The distributor's network tariff sets the underlying shape. The retailer's market offer can mirror it or wrap it in a simpler retail tariff. Always read the fact sheet's clock, not a blog post about "the" Australian peak period.

Two households with the same annual kilowatt hours can get opposite answers. A night-shift worker who runs laundry and a pool pump at 11 pm will often beat a single rate. A family that bathes, cooks and charges a car between 4 pm and 9 pm will often lose. How to compare electricity plans only works here if you feed the comparison site interval usage, not a single annual total.

Smart meters make the choice real

An old accumulation meter spins. It cannot tell the retailer when you used the power. The only time-varying product it can support is a separately metered controlled load. Everyone else on that meter is on a single rate whether they like it or not.

A smart meter records usage in short intervals, usually 30 minutes, sometimes 15. That data is what lets a retailer bill peak, shoulder and off-peak, and what lets a distributor apply a demand charge. If your meter has just been swapped, check the next bill and the plan letter. Some networks move customers onto a time-of-use or demand network tariff as part of the rollout. You may have more retail choice than the network default implies, or you may not. Smart meters explained covers the hardware; this article is about the price that hardware unlocks.

Until you have a few months of interval data, treat any time-of-use estimate as fragile. A comparison site that assumes a generic peak/off-peak split is guessing. Download the interval file from your retailer's portal if you can, or use the bill's peak/shoulder/off-peak lines once they exist.

The solar midday glut

Rooftop solar has changed the old story that cheap power is only at night. On a mild, sunny weekday the wholesale price in several regions now sags in the middle of the day. Networks have started to follow, with low daytime usage rates and, in DMO areas, products such as the Solar Sharer Offer: a free midday window for eligible smart-meter customers, with a cap on the free kilowatt hours.

That is useful if you can shift load. Dishwashers, washing machines, pool pumps, storage hot water on a timer, and EV charging from home are the obvious candidates. It is less useful if the roof is already covering those loads. A solar household that exports 8 kWh at noon and imports 12 kWh from 5 pm is not a midday story. It is an evening story. A cheap solar window does not discount the peak.

When you compare as a solar customer:

• Put import kilowatt hours in the peak window next to the peak rate. That is the number that usually decides the plan.
• Treat a generous midday rate as a bonus only for the imports you still make on cloudy days and in winter.
• Do not overvalue a high feed-in if the same plan has a punishing evening rate. Solar feed-in tariffs and plans for solar households are the longer versions of that trade-off.

Home batteries change the arithmetic again. A battery that charges from the roof at noon and discharges from 5 pm is doing the tariff shift for you. The flat rate becomes more tolerable; a high peak rate becomes the thing the battery is paid to avoid. That is a battery payback question, not a reason to assume time-of-use always wins.

When a flat rate still wins

A single-rate tariff is not old-fashioned. It is the right product when your usage refuses to move, or when the time-of-use peak is so wide that you cannot escape it.

Flat rates tend to win when:

• most of the household is home in the evening and that is when cooking, heating and cooling happen
• you have no controlled load, no EV, and no large appliance you can timer
• the single-rate usage price is only a little above the time-of-use off-peak, but well below the time-of-use peak
• you use few kilowatt hours overall, so the supply charge dominates and tariff shape is a rounding error
• the time-of-use plan you were offered is actually a demand tariff in disguise, with a capacity charge sitting under the usage rates

Flat rates also win as a budgeting tool. Some households will pay a few dollars a month for the privilege of not thinking about the clock. That is a legitimate preference. Just make it a conscious one after a comparison, not the default you stay on because the standing offer arrived first.

Retailers sometimes price the single-rate market offer as a premium product and push time-of-use as the "cheap" headline. Reverse that scepticism. Price both at your usage. If the comparison site cannot accept interval data, build a simple split yourself: peak kilowatt hours times peak rate, plus off-peak kilowatt hours times off-peak rate, plus 365 days of supply charge. Compare that total with the single-rate total. Ignore pay-on-time discounts until the underlying totals are close.

Controlled load versus time-of-use

Controlled load (sometimes called off-peak 1 or off-peak 2, or a dedicated hot-water rate) is not the same as the off-peak band on a time-of-use tariff.

Controlled load is a separate circuit. The distributor switches it on for a set number of hours, often overnight, sometimes with a daytime boost. It usually serves a storage hot-water system, slab heating or an old storage heater. The usage on that circuit is metered apart from the rest of the house and billed at a low rate. You cannot run a toaster on it.

Time-of-use off-peak applies to general household usage during cheap clock times. The whole switchboard is eligible. You decide what runs.

You can have both. Many older houses do: a controlled-load hot-water cylinder plus a single-rate or time-of-use general tariff. When the meter is upgraded, some networks invite you to drop controlled load and heat water on the general time-of-use tariff, or to put water heating on a contactor that follows the solar window. That can be cheaper if the cylinder is well insulated and you can heat it at noon. It can be dearer if you lose a very cheap controlled-load rate and then reheat in the evening peak.

Off-peak and controlled load electricity is the longer guide to the circuit itself. The comparison point for this article is simple: do not assume "off-peak" on a brochure means your hot water is included. Check whether the plan expects a controlled-load meter, and check what happens to that meter if you switch.

Electric vehicles sit in the same family of decisions. A car that charges at 2 am on a cheap off-peak rate is a time-of-use success. A car that charges at 6:30 pm on arrival from work is a time-of-use failure, and may also set a demand charge if your network uses one. Dedicated EV home charging tariffs sometimes overlay a third rate on top of the household tariff. Read that fact sheet as its own product, not as a synonym for off-peak.

The test is always the same. Get the clock, get the kilowatt hours in each band, add the supply charge, and only then decide whether time-of-use is a saving or a more expensive way to cook dinner.