Time Of Use Electricity Tariffs In NSW & How To Save Money With Solar Power

Saving Even More Money With Solar Power With Time-Of-Use Electricity Tariffs

Many people in NSW are noticing an increase in the cost of their energy bills these days. 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 billing period, which is from 2 pm to 8 pm on 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 isn’t always easy to implement.

This article will introduce you to a different way of thinking about time-of-use electricity tariffs in NSW and how you can use a solar power system to your advantage, without needing to change 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 peak billing period; the time when electricity companies are charging high premiums, in many cases more than 50 cents per kWh. This is one of the highest energy tariffs in the developed world.

By installing solar power, not only will you be lowering your power bills, but you will also be helping 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 that determine your billing rates across different times of 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, even if you have a smart meter.

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 (sometimes called controlled load)

• 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’ (or controlled load) 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 buyback rate (feed-in tariff) of 5.1 cents per kWh. Feed-in tariffs are typically a bit higher than that these days, but they can vary a lot depending on your energy retailer.

Below is an example of a power bill that does not have time-of-use tariffs, but instead a flat rate tariff is charged in ‘blocks’ of power across the quarter as the house uses more electricity. 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:

As you can see in the bills above, energy tariffs can vary a lot, putting a huge dent in your finances should you need to use a lot of electricity during the 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.

If you need help understanding your power bill, reach out to us and we would be happy to help.

To be eligible for a time-of-use plan, you need to have a smart meter installed on your property so that your power usage can be monitored accordingly. To make the most of time-of-use tariffs you need 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. This could mean no air conditioning until 8 or 10 pm, at least if it wasn’t for solar power.

1KOMMA5° 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:

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

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 on weekdays or something very similar to that. Check with your energy retailer for personalised information.

Regardless of whether your energy provider has chosen to utilise 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 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.