Time Of Use Electricity Tariffs In NSW | Saving Money With Solar & Battery Storage

Saving Money With Solar & Battery Storage

Many people in NSW are noticing an increase in the cost of their energy bills these days despite the overabundance of energy being produced around Australia. Besides the skyrocketing base price of electricity, the other main reason for this counter-intuitive trend is that energy companies will often charge you extra during the peak bill period from 2pm to 8pm weekdays.

People are taking action to reduce their power bills. The most disruptive option is to shift your energy usage to off-peak electricity times, making the most of the lower tariffs overnight, but this drastic lifestyle change often isn’t easy to implement, especially if you are generally home during the evening and asleep at night.

This article will introduce you to a different way of thinking about time of use electricity tariffs in NSW and how you can use solar energy to your advantage, without changing the way you live. 

Making the decision to lower your energy bill with a  solar power system, or an integrated solar & storage system will help you moderate your energy bills during the time when electricity companies are charging high premiums, in many cases more than 50 cents per kWh, which is one of the highest energy tariffs in the developed world.

By installing solar power, not only will you be lowering your power bills, you will also help the environment by running your home almost entirely on clean solar power from the sun.

Time of use tariffs – understanding your power bill

If you have signed up for a ‘time of use’ (TOU) or a ‘flexible pricing’ plan with your energy company then you may be familiar with the terms peak, off-peak, and shoulder to gauge your billing rate throughout different times in the day. In NSW, this is more common in the Ausgrid distribution area (the Eastern half of Sydney up to Newcastle). The Endeavour distribution area (Western Sydney) typically doesn’t have time of use billing.

The off-peak electricity billing period is a duration of time throughout the day when you will be charged the least for your energy consumption. The rest of the day is separated into shoulder and peak times that incur incrementally more tariffs per kWh.

Power bills can get a little confusing, however, there are a few main line-items that add up to your total cost of power for the quarter:

  • Peak consumption – typically around 52 cents a kWh
  • Shoulder consumption – typically around 28 cents a kWh
  • Off-peak consumption – typically around 17 cents a kWh
  • Off-peak hot water – often less than 10 cents a kWh
  • Daily supply charge, typically around 95 cents a day
  • Environmental charges – many households sign up for ‘green power’ where they pay extra for the retailer’s green energy program
  • Discounts for on-time payment etc.
  • GST

A flat rate… in blocks

Just a point of clarification – if you don’t see a shoulder billing period on your power bill but still have ‘peak’ or ‘off-peak’ showing on your bill, you probably don’t pay time of use tariffs.

Instead, you will typically pay a flat rate across the day to power your home, and then have an ‘off-peak’ phase in your meter board that provides cheaper electricity for your electric hot water. This will often be called off-peak 1 or off-peak 2 on your bill.

The bill below is of an existing customer with a solar buy back rate (feed-in tariff) of 5.1 cents per kWh. Feed-in tariffs are much higher these days, typically around 8 to 16 cents per kWh, depending on the plan you sign up for with your energy retailer.

Below is a good example of a power bill that does not have time of use tariffs, but instead a flat rate tariff is charged across the day in ‘blocks’ of power. As you can see in the bill, the blocks have similar tariffs that vary from 21.1 cents up to 22.9 cents per kWh:

If you need help understanding your power bill simply email it to sales@solaray.com.au and we would be happy to help.

As you can see in the bills above, energy tariffs can range drastically, putting a huge dent in your finances should you need to use energy during peak times and – let’s be honest – the peak period of 2 pm to 8 pm on weekdays can be a little difficult to avoid! Who doesn’t want to come home after a long day at work or school and switch on the TV or computer and relax for the day? You know that time when you get home, switch on the lights, cook yourself a meal and warm up in front of a heater? Well, that’s when you’ll be charged the top rate for power.

To be eligible for a time of use plan, you would need to have a smart meter installed on your property so that your power usage can be monitored accordingly. It would be beneficial to be mindful about when you actually use electricity on a daily basis to ensure you are making the most of your potential savings during off-peak electricity times in NSW. This could mean no air conditioning until 8 or 10 pm, at least if it wasn’t for solar power.

Solaray Energy has a solution for you that will allow you to take full advantage of your downtime without the additional costs.

But first, let’s look at the tariff periods.

Time of use electricity times in NSW

Off-peak electricity times in NSW are by-and-large the same across the board. They span from 10 pm-7 am daily. Peak and shoulder times, however, change seasonally throughout the working weekdays as well as on weekends, holidays, and “off-months” for most energy companies.

From our research, we have found that companies such as Diamond energy, EnergyAustralia, and Pooled Energy follow Ausgrid’s TOU structure that fluctuates depending on notable power usage changes through the year, not just daily. This is aimed toward creating a more even billing cycle for energy consumers by encouraging them to use energy during off-peak or shoulder times rather than the more expensive – and generally more desirable – peak times. Below is what this billing structure looks like:

Seasonal Time of Use (TOU) billing

Summer months – working weekdays (June-August, inclusive)

  • Peak: 2-8 pm
  • Shoulder: 7 am-2 pm / 8-10 pm
  • Off-peak: 10 pm-7 am

Winter months – working weekdays (November-March, inclusive)

  • Peak: 5-9 pm
  • Shoulder: 7 am-5 pm / 9-10 pm
  • Off-peak: 10 pm-7 am

All other times – weekends and holidays, plus April, May, September, and October

  • Peak: N/A
  • Shoulder:7 am-10 pm
  • Off-peak: 10 pm-7 am

*image from https://www.ausgrid.com.au/Your-energy-use/Meters/Time-of-use-pricing

Unfortunately, many retailers such as AGL are not implementing Seasonal TOU billing but rather keeping with the previous billing schedule whereby the “summer months” timing is used all year, throughout the working weekday, and the “all other times” version is used primarily for weekends and holidays. This means that for a lot of households the peak billing period is 2 pm to 8 pm weekdays or something very similar to that. Check with your energy retailer for personalised information.

Regardless of whether your energy provider has chosen to utilize the old version or the new seasonal version of this billing method, you would have to shift most of your energy usage to off-peak times to make the most use of the TOU tariff.

Reducing Your Power Bill With Solar Power

Installing solar power on your home is one of the most effective ways to reduce your power bills. Depending on your roof, you may even be able to design a solar system to match your home’s energy consumption. For example, if you use lots of power in the afternoon, we can help you design a solar system on your western roof that outputs power all the way through to sunset.

But isn’t north the best place to install solar panels?

We hear you, and it’s true. But by installing solar panels on a roof facing W or NW, you will be generating power later into the peak billing period (especially in summer when the air con is often running), and the total output across the day is only a little less compared to North, as shown here with a system that has one string of panels facing North and another string facing East:

Custom solar systems designed for maximum benefit

By installing solar power in a way that the output of the system roughly matches your power usage, we can set you up for hassle-free energy management that will help you reduce your power bills as much as possible, without you having to run around after the kids turning the lights off. 🙂 With your system outputting solar power right up until sunset, you can be saving over 50 cents per kWh during the peak billing period, which really helps maximise the benefit of your investment.

For most of our customers, we aim for you to use around 70% of the solar power generated in the home, and possibly even more (depending on a number of factors that we will discuss with you before sending you a quote). You don’t need to use all of the solar power as it is generated to see a significant return on your investment:

Reducing your power bills even further with battery storage

Moderating peak/off-peak energy usage in NSW with solar panels and batteries can lower, and sometimes even eliminate, the burden of your electricity bill (except perhaps for the service charge).

Solar self-consumption, as the name implies, means that you use all of the solar energy that your system produces as it is being produced. Whether this is through immediate use within the home or by storing it in batteries for use later in the day, it is the best way to save on your energy bill. 

Using Solaray batteries as storage for extra solar power allows you to side-step the peak and should tariff rates completely as the stored solar power can be used from sunset right through to the start of the off-peak period at 10 pm, and then again the next morning when the off-peak period ends.

Batteries such as the Tesla Powerwall come with a sophisticated energy management platform that can take into account your time of use tariffs and it will then automatically optimise the solar system based on how much power you use across the day.

Additionally, batteries can also help during a blackout or similar energy crises. You can set how much power the battery will keep in reserves at all times so you never get caught out with no charge in the battery right as the blackout hits. Typically this is set at around 20% of the battery’s capacity.

We’d love to hear from you!

We don’t do high-pressure sales, we are much more interested in giving you the information you need to make an informed decision.

If you are interested in more information about how to reduce your power bills, you can call the Solaray Team today on 1300 221 586, or simply fill in your details below and we will get back to you.

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