Understanding energy tariffs
If you’ve ever tried to buy flights the day before a big event like Christmas or the AFL Grand Final, then you may have noticed the price hike. This is due to high demand driving prices. Well, the same applies when paying for electricity.
The price you pay for using electricity is called an energy tariff. In yesteryear, everybody paid the same rate – morning, noon and night. But modern technology – and different energy tariffs – have given us options to save money on our electricity bills.
RAA Senior Manager of Energy Market Development Kerry Bowles explains how.
In South Australia, we have four main residential energy tariffs – single rate, controlled load, solar feed-in, and time of use.
Single rate
A single-rate tariff plan has one flat rate. Whether using energy during the day or night, you pay the same amount per kilowatt hour. It means there are no savings if you use energy in off-peak times.
Controlled load
These rates apply to specific appliances, such as hot-water services, underfloor heating and pool pumps and are often cheaper than general usage rates.
Solar feed-in
If you have solar, you’ll usually be paid for the energy you export to the electricity grid. For most systems, your energy provider sets the feed-in tariff amount, and you’re paid a certain rate per kilowatt hour of energy you generate. A solar feed-in tariff is not standalone and is used in conjunction with a usage tariff.
Time of use
When your plan has a time-of-use tariff, the price of your electricity changes depending on the time of day. Effective 1 July 2024, SA Power Networks has three applicable periods but check if your retailer offers something different.
- Peak, 6am-10am and 3pm-1am: when demand is highest, and electricity is the most expensive
- Off-peak, 1am-6am: when demand is lowest, and electricity is cheaper than in peak times
- Solar sponge, 10am-3pm: also known as ‘shoulder’ rates, this is usually the cheapest time to use energy, especially if you have solar.
Tariffs and electricity meters
If you have an older, clock-style electricity meter at your home or business, chances are you’re on a single-rate tariff. This means you’re paying the same amount regardless of the time of day you’re using electricity.
These days, smart meters are becoming more common and they’re now the default option for replacements and new installations. Smart meters measure your electricity usage in real time, allowing you to track your energy habits. When you upgrade to a smart meter, your energy plan may change to a time-of-use tariff.
How can a time-of-use tariff save me money?
With a time-of-use tariff, the key to saving money on your electricity bill is tweaking your daily habits. For example, you can run energy-hungry appliances like dishwashers, dryers and washing machines between 10am and 3pm when SA’s solar energy generation peaks and electricity is cheaper.
Doing your homework can also help you save. With a smart meter, you can track your usage through your retailer’s app, online portal or email updates. You can work out your energy-use patterns and see if you can run appliances at different times. It might take some planning and effort, but you’ll be glad you put in the work when your next bill arrives.
With RAA Energy, eligible households receive a free smart meter* and access to time-of-use tariffs.
* Subject to the requirements and limitations of the premises. The upgrade will not be provided if a compatible smart meter is already installed at the premises. The meter upgrade is non-transferable. Additional costs may apply if the premises requires upgrades or remediation works to enable the installation of the smart meter.