Peak and off-peak electricity times

In Australia, peak electricity is typically when the demand on the electricity network is greatest. If you’re on a time of use pricing structure, this is typically the peak period, where electricity rates are the highest. Peak electricity may show on your electricity bill as ‘peak usage’, ‘peak rate’, ‘single rate’, ‘flat rate’ or ‘anytime usage’

Off-peak electricity rates are discounted rates your electricity retailer may offer you as an incentive to use less electricity during peak demand periods. The off-peak rate will be lower than that retailer’s flat rate tariff (also known as the single rate tariff), which can help you save by concentrating some of your non-essential electricity usage to these times.

In some cases, energy plans may also have a ‘shoulder’ period. This is a third electricity rate that is typically cheaper than the peak period, but more expensive than the off-peak period. Shoulder periods typically won’t cover long periods of time and are only available on some plans, and in some locations (e.g. in Victoria, none of their plans will include a shoulder rate, it will be only peak and off-peak rates.)

If you’re on a time-of-use tariff, the specific peak, off-peak and shoulder times can vary between energy retailers and plans, as well as your location. It can also vary between weekdays and weekends.

But generally, peak electricity hours may be from early afternoon until late evening, and sometimes during the mornings. This is when most, if not all, of a household is typically at home and consuming electricity.

Off-peak time periods are when households use the least electricity. It may be late at night until early morning, and during the day when most people are at school or at work and when solar energy is being exported into the grid (making the cost of electricity cheaper). Shoulder periods are typically short windows that lay between peak and off-peak periods; however, depending on your location and distributor, shoulder periods may not always be available, and instead there will only be peak and off-peak rates.

Before switching to a new plan, you can check the electricity plan information on what rates you’ll pay for different times of the day, night or week. It’s also important to understand that your time of use tariff will only be one part of your electricity bill (known as the usage charge); all electricity bills, regardless of tariff type, will also have to pay a fixed daily supply charge, which is the cost of supplying electricity to your home.

While a single rate tariff will charge a single flat rate no matter what time you use it and a time of use tariff will have the same off-peak and peak rates regardless of how much electricity you use during those periods, a demand tariff is different. A demand tariff encourages customers to use electricity outside of peak hours by having an extra demand charge that’s based on your household’s specific usage during peak periods.

Demand tariffs require a smart meter that track your electricity usage in 30-minute intervals. Your demand charge may be calculated by using your highest 30-minute period of energy usage over a month, multiplied by the number of days in the month and the demand charge rate. By spreading out your individual appliance usage over off-peak hours, you may pay a lower demand charge. This tariff best fits residential households where people aren’t often at home during peak hours, or small businesses (like bakeries) that use the majority of their energy usage outside of demand times.

Whether this type of electricity plan is right for you will depend on the circumstances of you and your household. Switching to a time of use tariff with peak and off-peak electricity may help you save on your electricity costs if you can spread your non-essential electricity use to off-peak periods.

One way to make the most out of off-peak periods is to set your major appliances to timers and only run them during hours where you have cheaper electricity rates. Using high-energy usage appliances such as your pool pump, washing machine, dishwasher or dryer only during off-peak periods may help lower your electricity costs.

If you have solar panels, you may be able to save further. If you have solar battery or get sunshine during peak periods, you may avoid paying as much for electricity from the grid during these hours by taking advantage of solar instead. As the majority of sunlight hours may be during off-peak hours, a solar battery can let you store solar power to use when your electricity rate is at its highest.

If you’re a residential customer looking to switch electricity plans to one with off-peak periods, you may be eligible if:

• You live in a deregulated area of Australia
• You have a smart meter or can get one installed
• Your retailer offers time of use or you can switch to a retailer that does.

While not a requirement, a time of use tariff may be right for you if you are often out of the house on weeknights, work from home during the day or can use your high energy-usage appliances during off-peak hours or on weekends.