{"id":6235,"date":"2016-07-08T15:14:04","date_gmt":"2016-07-08T05:44:04","guid":{"rendered":"http:\/\/www.solarquotes.com.au\/blog\/?p=6235"},"modified":"2025-12-19T13:05:00","modified_gmt":"2025-12-19T03:35:00","slug":"time-of-use-pricing","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/time-of-use-pricing\/","title":{"rendered":"Standard Tariffs Vs Time Of Use Pricing. Which Goes Best With Solar?"},"content":{"rendered":"
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What will give you the lowest bill, a standard or time of use tariff? What if you add solar? What about batteries?<\/p><\/div>\n

Australians pay for grid electricity in two ways. \u00a0The most common way\u00a0is a standard tariff. But you can also choose a\u00a0time-of-use tariff.<\/p>\n

What is a standard tariff?<\/h2>\n

This is where you\u00a0pay a fixed rate for each kilowatt-hour used, plus a hefty supply charge. \u00a0Australians have been paying for electricity this way since the the electricity meter,\u00a0invented in 1888<\/a>, was\u00a0developed into the ‘spinning dial’ type in\u00a01914. So Australians have been using standard tariffs for over\u00a0 a century.<\/p>\n

What is a time-of-use\u00a0tariff?<\/h2>\n

The more recent\u00a0method of paying for electricity is the\u00a0time-of-use tariff.\u00a0 This is where the cost of a kilowatt-hour<\/a> depends upon what time of day it was\u00a0used. \u00a0As with standard tariffs, there is a hefty supply charge as well.1<\/a><\/sup><\/p>\n

While large businesses have been using time-of-use pricing in one form or another for a long time, they have only become widely available to Australian households over the last few years. \u00a0Time-of-use tariffs are available, for those who want them, in some form almost everywhere except Tasmania.2<\/a><\/sup><\/p>\n

With time-of-use tariffs electricity is cheapest when you use it late at night and early in the morning. \u00a0It is most expensive to use it in\u00a0the late afternoon and evening.<\/p>\n

Standard tariffs are usually\u00a0best for solar homes<\/h2>\n

Households with rooftop are usually better off on standard tariffs.\u00a0 This is because they tend to use less grid electricity during the day and more during the late afternoon and evening when time-of-use tariffs\u00a0are expensive.<\/p>\n

There are two main exceptions to this.\u00a0 The first is for people whose electricity consumption patterns are unusual.\u00a0 And the second is for people who are themselves unusual. That is people who are willing to change their behaviour and\u00a0do what it takes to get their grid electricity consumption down during peak periods.<\/p>\n

Time-of-use tariffs are\u00a0best with batteries<\/h2>\n

Installing battery storage will almost always result in time-of-use pricing\u00a0being the most cost effective for a household.\u00a0 This is because batteries can discharge\u00a0in the evening and reduce the need to purchase expensive peak electricity.<\/p>\n

However, with a small battery system that has a very low power output, a household could still\u00a0be better off with a standard tariff.<\/p>\n

Electricity Tariffs and Smart\u00a0Meters<\/h2>\n

Standard tariffs used to be the only sort available to households. Old analog meters could only\u00a0record how much electricity was used but not when.<\/p>\n

Apparently no one thought of giving analog meters wristwatches so they could jot the times down. I’m sure it would have worked just fine provided no one gave them digital watches, as that would probably make them feel inadequate.<\/p>\n

Meters had to get smarter before they could allow households to use time-of-use tariffs, and that is exactly what is required \u2013 a smart meter. Don’t be too impressed by their name. The ones we have in Australia aren’t that bright. For example, they can’t do your taxes. But what they can do is record how much electricity is used each half hour and an electricity retailer can use that information to charge a time-of-use tariff.<\/p>\n

If you don’t have a smart meter you’ll have to get one before you can have a time-of-use tariff. Depending on where you are the cost can range from quite reasonable all the way to unreasonable. For example, if you are in Canberra you will\u00a0pay $500 or more to have one installed.<\/p>\n

If you live in Victoria then you already have a smart meter and were charged for it whether you wanted one or not.<\/p>\n

Note that you can still get a smart meter and stay on a standard tariff. No-one can force you onto a time-of-use tariff.<\/p>\n

Everything You Need To Know About Standard Tariffs<\/h2>\n

Standard tariffs are pretty straight forward. You use electricity and you pay for each kilowatt-hour, plus a daily supply charge.<\/p>\n

But there are a couple of complications that may apply. For example, in South Australia some plans charge around 3 cents a kilowatt-hour more for electricity in the summer, which electricity retailers consider to last from the 1st of November to the 31st of March.<\/p>\n

It is also common to be charged different rates depending on how much electricity you use. For example, one plan available in South Australia charges around 27 cents each for the first 100 kilowatt-hours used in a month, 28 cents each for the next 233 kilowatt-hours used and then 33 cents for each kilowatt-hour used after that. There are also plans that work the other way and charge you more the less electricity you use. As households with rooftop solar often have low electricity usage, they are usually best avoided.<\/p>\n

Typical Standard Tariffs By State And Territory<\/h3>\n

Standard tariffs per kilowatt-hour, including discounts and GST, available to most people in cities for states and territories are shown below:\u00a0