Managing your power bill on a demand or time of use tariff
Moving from a flat rate tariff (where you are charged the same rate for consumption throughout the day) to a demand tariff or a time of use energy tariff doesn't have to mean your power bill goes up. Some households may be better off on a demand or time of use tariff, depending on how and when they use electricity. For other households, just by making a few changes to how you use your appliances, you may be able to reduce your energy costs on these tariffs. When moving to any new tariff, it's important to know how you are being charged so you can adjust your power usage patterns as required.
Here are some tips to get the most out of demand and time of use tariffs:
1 Ask your electricity retailer exactly how your tariff works
- If you are on a demand based tariff, what time of day do those demand charges apply? Most retailers apply their peak demand charges during the evening - typically 4pm to 9pm - but it's important to confirm how your tariff works as some retailers apply their demand charges on an ‘anytime’ basis, that is, the single highest half hour demand during the whole billing period.
- If you are on a time of use energy tariff, what are the tariff rates for consumption, and how much do they vary throughout the day?
- Can you choose between a demand or a time of use tariff? If so, ask your electricity retailer if they can advise you, based on your previous consumption, which one suits your household the best (note that if you have recently changed retailers, or moved into a new premises, your retailer may have limited historical energy consumption information and you may need to review your first few bills to understand your electricity consumption).
- Remember - if you make changes to how you consume electricity, this could alter which tariff is best for your household.
2 Do you have a smart meter?
- Ask your electricity retailer if they can tell you when your household’s peak demand periods typically occur, and how high that is. For most people, peak demand occurs during the evening between 4pm and 9pm
- If you don’t have a smart meter, it’s unlikely that your retailer will be able to provide you with historical electricity use information, and you may have to wait a few months after your digital meter has been installed to get access to this information - your power bills should also display what your energy consumption (kWh) and demand (kW) was for each billing period (usually monthly), if you are on a demand based tariff.
- As a general guide, the average demand from a residential premise, with suitable metering, in south-east Queensland during the peak period of 4pm to 9pm, is around 4.16 kW. In regional Queensland, the average demand during the peak period is 3.54kW. These are average figures and do not take into account whether a household is already on demand or time use retail tariff. Your house may differ significantly.
- You can request a report that will display up to 2 years' worth of meter data to see your historical electrical consumption (kWh) and electricity demand (kW) if you have a smart meter.
3 Think about your electrical appliances being used
- What appliances are being used that might be contributing to peak electricity usage in your household, that is, those appliances running at or around the same time in the tariff's peak charging periods?
- For example, you might be using your electric stove or oven, TV, computers, washing machine, air conditioners and a pool pump all at the same time when you come home from work
- Consider if you can move the use of some large appliances to off-peak times to avoid peak charges altogether – this is particularly relevant if you are on a time of use tariff. For example, can you run your dishwasher, washing machine, dryer, pool pumps, ironing outside of the peak period?
- Remember - on a demand-based tariff, demand is measured in 30 minute intervals, therefore if you can, staggering large appliance usage till the next interval commences (on the hour or half hour) can be an option to reduce your demand.
4 Think about large appliances like hot water systems, air conditioners
- You might consider moving them to an economy tariff, as electricity used on these tariffs does not contribute to demand or time use charges on your primary tariff
- This is even the case when you are using these appliances during the peak demand charging period.
- Read about hot water on an economy tariff.
5 Which tariff is better for my household - demand or time of use energy?The best way to determine if demand or a time use energy tariff is best for your household is to review your previous electricity consumption and compare that against the tariff structure and the rates. If your electricity retailer isn't able to do this for you when first changing from a flat rate tariff, you may need wait till you have a several months of bills and ask them again. The following is a general guide that may help you to determine which tariff could suit your household best.
You may be more suited to a time of use energy tariff if...
- You are sometimes out in the evenings and or generally have low electricity consumption during around 4-9pm.
- You use cooking appliances that either run on gas or consume less electricity than older stoves or large ovens (e.g., air fryers, induction cooktops, slow cookers) with short cooking times.
- You do not typically use appliances that consume large amount of energy for a short period or longer (ie up to 30 mins), during the evening peak.
You may be more suited to a demand tariff if...
- You have appliances that have a high power demand and that need to run for longer periods (like a large hot water system, electric vehicle charger), which you can program to not operate during the evening peak (consumption charges on demand tariffs are typically cheaper than on time of use energy tariffs).
- Appliances you need to operate during the evening peak are either not high power usage appliances, OR
- Appliances you need to operate during the evening peak, that use higher amounts of electricity, are able to be staggered across different 30 minute periods.
The choice between a time of use energy tariff and a demand tariff depends on your specific energy consumption patterns, the types of appliances you use, and your ability to shift high-energy usage outside of the peak period. Both tariffs offer potential bill savings when you can utilise high-energy appliances during non-peak times.
Economy tariffs can also help
If you have moved to a demand or time of use tariff, or may be required to in future, moving appliances to an economy tariff (sometimes referred to as a controlled load tariff) may help reduce your electricity bills.
Electricity used on an economy tariff does not contribute to demand or time use charges on your primary network tariff, even when you are using appliances during the peak demand time (for example 4pm - 9pm). However, you should check with your retailer about how their retail tariff rules and charges apply.
Talk to a licensed electrician or your electricity retailer about putting appliances like pool pumps, hot water systems and electric vehicle chargers onto an economy tariff.
Reduce peak electricity demand at home
Adjusting to a demand based tariff or time of use energy tariff is not about stopping using electricity altogether, rather thinking about how and when and how you use electricity - particularly high energy use appliances. .
If you are on a time of use tariff or demand tariff, it makes sense to try to lower your peak time usage by using some appliances outside peak times (check with your electricity retailer for when the peak times are as they can vary), especially appliances that use large amounts of electricity like pool pumps, cooking equipment, irons and air conditioners.
When you must use appliances during peak time, try to spread out their use during that peak time. You can see in the example below that using appliances all at once can result in a higher electricity demand.
By understanding the power usage of your appliances, you can better see which ones are contributing the most to your electricity demand. Think about running appliances with the highest kW rating on their own, or outside the peak demand period altogether.
Some examples of high rated appliances in the home are:
- Electric Vehicle charger - 7,000 watts
- Hot water system - 3,600 watts
- Oven - 3,000 watts
- Microwave - 2,000 watts
- Iron - 2,000 watts
- Living room air conditioner - 1,500 - 2,000 watts
- Pool pump - 1,000 watts
Devices that can help
There are devices that can monitor your electricity usage and demand in the home in real time and display the results on an app or a small wireless display. These are referred to as In-home Displays. They can cost as little as a few hundred dollars and some can be installed without the need for an electrician, meaning you can take them with you if you move home.
An in-house display can help take the guess work out of knowing how much electricity your appliances are using and managing your electricity costs, or even saving you money on a demand tariff.
For some appliances you can manually decide when you use them, but for larger appliances it’s often better to ‘set and forget’ them, for example:
- Using timers that are in-built into newer appliances like dishwashers, washing machines and air-conditioners
- Installing timers on equipment (example hot water systems, pool pumps) so they come on and off automatically
- Installing a Home Energy Management System (HEMS) which is a smart way to monitor and manage your home energy use.