Australian Home Electricity Information
This page is an introduction to :
"I switched to a Time Of Use tariff, as I was told my costs would be less. I just got the electricity bill. It was $200 more, with higher service fees and costs!"
A growing number of Aussie householders are NOT BEING MADE AWARE of how to judge, if a 'time of use' tariff is suitable for their existing electricity usage pattern. Some clients have no idea at what time of the day the costs per kWh change. Interestingly you would have thought this should be on the electricity bill, though we have not seen it stated yet!
One accurate solution is to install an electricity monitor with a tariff comparison program based on your home's current usage HERE.
Further information is needed Australia wide, by householders on how to make the best educated choice. Nobody wants the above to happen, especially when the time of use tariff was initially chosen to save on electricity costs. It pays to check all information before talking to an electricity retailer.
This page is all about offering you as much information on Aussie home electricity. The primary goal being to help you understand electricity usage, costs and billing. Helping you to further make an educated guess on electricity providers, where a choice is available.
More information on Smart Metering, Reading Electricity Meters and Disputed Electricity Bills can be found on our HOME ELECTRICITY REDUCTION BLOG. Use our SEARCH ENGINE for specific information.
NEED HELP? Visit SERVICES for an in-home visit or POWER AUDIT for a telephone consultation.
See also these three blog posts, as a starting point for a better understanding.
Residential Electricity Supply Information
Electricity is supplied to the majority of Australian homes at a voltage of 240 volts, which can vary at times due to network loading or geographical location. Electricity is charged at a usage rate of 1000 watts per hour, known as 1 kilo watt per hour and abbreviated as 1 kWh on the electricity bill.
Watts are often termed as the 'power' an appliance uses. The watt rating being stated on most Australian appliances in the home. On a front loading washing machine for example, you may see 2200W. This would be the maximum power used, especially where the machine heats it's own water. See the illustration.
A typical electricity provider's charge for 1 kWh of electricity, is 28.85 cents after GST [NSW Country Energy July 2011].
Australian households have a varied choice of electricity suppliers. In Australia the average household electricity use is approximately 18 kWhs of electricity per day. Visit ELECTRICITY SUPPLIERS to learn more about distributors and retailers electricity offers, listed by State.
The electricity you are billed for, is either based on a 'on & off peak' tariff, or a 'Time Of Use' [TOU] tariff. Sometimes a mixture of the two, see TIME OF USE TARIFF for more detailed information.
Aussie Home Electricity Tariffs
It is important to know the type of tariff you are on, so as to fully understand how you are billed for the electricity used.
Just as important is to know when you use electricity and how much your using, before thinking of switching tariffs. Without this knowledge you may find by switching tariffs you actually increase your electricity bill. For example a TOU tariff may increase your total electricity bill, when your home uses a lot of energy between 14.00 & 20.00, as electricity at this time is often charged at a premium price. For example 45 cents per kWh, compared to a lesser charge of 18 or 10 cents.
If you have switched electricity provider, you may not find the same offer on the table when attempting to switch back to your previous provider, as you are now treated as a new customer. Not to forget the early termination fee from the new contract you have just terminated.
Common types of home electricity tariffs in Australia are:
Residential On-Peak / Off-Peak Tariff
Electricity can be priced at different levels, based on the demand for electricity at particular times of the day. For example electricity is often cheaper at night, when there is less demand. This is known as off-peak electricity. What is often connected to this cheaper electricity in a home, is the hot water system, or a booster element for a Solar Hot Water system.
What is commonly not known by Aussie householders, is that any suitable appliance can be connect to the cheaper off-peak rate. The appliance has to be hard wired, to the off-peak meter. Suitable appliances being a pool pump and heating appliances. When the pump is connected to peak power, it may be costing $180 per bill. This can now be reduced by 50% or more by connecting it to the off-peak! Note the pool pump would only come on during the off-peak periods. A further option, is to have it wired so you have the ability to use it during on-peak times, when needed. Talk to your electricity supplier about your off-peak options and your electrician about the wiring.
During high demand times, electricity is charged at a higher rate, known as on-peak.
Homes connected to on-peak / off-peak tariffs, will have either two mechanical looking meters in the electricity power box, with one meter for each tariff. Or an electronic meter measuring both tariffs.
With the on / off peak tariff, you do not have many options to reduce electricity costs, other than by adding appliances to the off-peak or reducing on-peak electricity usage. It is this reduction in electricity usage, where householders make the most savings.
Below is an example of Essential Energy's explanation of controlled loads.
Residential Controlled Load 1: To all residential and business premises where the premise has another primary metering point present at the same metering point as the secondary load. This secondary load being remotely controlled / switched on / off. Applicable to loads such as water heating, swimming pools, heat pumps etc. Loads must be permanently connected or on a dedicated power circuit with indicators to show when supply is available. Supply will be made available for 5 to 9 hours overnight on weekdays and extra hours on weekends except where the load is controlled by a time clock. Note: This tariff is not at available for the top boost element of a two element water heater for new connections.
Residential Controlled Load 2: To all residential and business premises where the premise has another primary metering point present at the same metering point as the secondary load. This secondary load being remotely controlled / switched on / off. Applicable to loads such as water heating, swimming pool operation, heat pumps etc. Loads must be permanently connected or on a dedicated power circuit with indicators to show when supply is available. Supply will be made available for 10 to 18 hours per day on weekdays and ALL HOURS on weekends except where the load is controlled by a time clock.
Approximate charges [cents per kWh] for these tariffs being:
Residential Peak : 30.21 with Daily Supply Charge : 124.00
Residential Off-Peak Load 1 : 10.00 with Daily Supply Charge : 13.00
Residential Off-Peak Load 2 : 16.00 with Daily Supply Charge : 13.00
If you are using a controlled load [either off peak I or II] you will see two meter readings on your bill. The off-peak reading will be noted as 'controlled load 1 or 2.
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Residential Time of Use (TOU) Tariff
If you're not sure whether you're on a TOU tariff, look inside your meter box and see if your meter has a TOU sticker. Most TOU meters are modern with a digital display like the one here illustrated.
If you're switching to a TOU meter, there may be an additional usage charge from your electricity provider. Where a new TOU meter is installed for TOU metering, you may have to further pay an installation fee.
You may have to switch to TOU when you're considering a Solar PV installation. See our GUIDES page for more information on this.
How TOU tariffs differ from the older on-peak / off-peak tariffs, is that with TOU your WHOLE household's electricity use, is charged at these different tariffs. All costs dependent on the time of day you use the electricity.
Therefore to control your spend you need to understand the tariff inside & out. You will need to know three things:
What the different rates are.
At what times are they are in effect.
How much electricity are you using at any particular time.
The TOU tariff often has an extra time period, known as 'shoulder' . This is simply the time of day either side of the on-peak time. It may or may not be charged at a different rate to the on-peak.
An example of the TOU tariff is as follows [Prices quoted include GST] :
- Residential Peak : 7:00 - 9:00 | 17:00 - 20:00 Weekdays : 31.07 cents per kWh.
- Residential Shoulder : 9:00 - 17:00 | 20:00 - 22:00 Weekdays : 31.07 cents per kWh.
- Residential Off-Peak : 22:00 - 7:00 Weekdays | Weekends : 15.55 cents per kWh
- Daily supply charge : 139.22 cents per day
Get our FREE TOU EXPLANATION one page summary from our GUIDES page. Easily printable making it a great fridge door note to keep you on track, in understanding your electricity costs!
As we've mentioned, knowing the electricity rates you're charged for at different times of the day is one thing, for home electricity reduction to occur, you will need to find out how much electricity your appliances are using at any particular time of the day. And this is where our SERVICES & PRODUCTS can assist you with starting your HOME ELECTRICITY REDUCTION PROGRAM.
Our ELECTRICITY MONITORS will easily track your electricity usage per circuit or appliance and supply costings.
As all Australian States & electricity providers have their own differences, it is possible to see TOU metering, with the option of off-peak connections to various appliances, such as your hot water. A call to your electricity provider is the best way to clarify your metering options.
Any off-peak appliance is normally highlighted on the bill via the term 'controlled load'. If not, then this means the electric hot water has a timer installed, where only switches ON during the off-peak times of the day.
There are advantages and disadvantages of TOU metering. For some households it can reduce the bill, for others raise it. It really depends on when you use electricity and how much!
A household with a lot of power hungry appliances operating after 22:00 but before 7.00 during the week and during the day all weekend, may find there are considerable savings to be made. As long as the TOU tariff rate for the high demand times [peak] is not to great an increase in cost.
For the household with no idea of electricity billing, with a high electricity usage in the peak times of the day, the electricity bill can be raised dramatically by a TOU tariff!
Where electricity supply & metering are an issue, contact your electricity provider or STATE ELECTRICITY OMBUDSMAN.
Quantity Based Tariff
A quantity based electricity tariff is also termed a block or tiered rate. This is where you have a defined quantity of electricity charged at a low cost, before the cost rises per kWh. There is often three steps in the tier. For example:
This tariff is designed to offer the homeowner an incentive to conserve energy. Beware the tier levels can change without notification from your electricity retailer.
See this report A HIDDEN REASON YOUR ELECTRICITY BILL RISES on our blog.
Understanding The Aussie Home Electricity Bill
We always discuss electricity bills with our clients, whether we are doing an IN-HOME ELECTRICITY AUDIT or TELEPHONE CONSULTATION, so as to educate them on how too understand the charges and the bill's layout. Electricity costs for home and business are of a major concern for many clients.
Aussie Home Energy is more concerned the average householder in Australia, does not fully understand electricity charges and the electricity bill.
To fully Understand Your Electricity Bill visit our ELECTRICITY BILLING page.
BILL PAYERS DO NOT ALWAYS LEARN TO SAVE ELECTRICITY!
Some common reasons for householders not understanding the electricity bill are:
- It's never been explained to them.
- It's too complex to understand when attempted.
- There's NO NEED to understand it from the householder's point of view, where costs in the past have not increased for years!
- There's NO NEED to understand it as the householder is falsely led into a belief they can do no more! They already have the best electricity discount possible! RUBBISH!
Where we say 'too complex', we mean it is not written for the average Aussie householder to clearly understand. In a lot of cases we would question whether the electricity retailer's call centre contact can even understand the bill! We live in a world of automated electricity billing, where there is little human intervention.
The following electricity bill details a list of charges, that we reckon only the electricity retailer can understand. Yes we have added some simple explanations. Though still very confusing!
With all this confusion how is anyone expected to check the bill for correctness? And YES electricity bills do contain errors. Check out our ELECTRICITY BILLING ERRORS page if you are in doubt! To understand your home or business power bill more easily see our ELECTRICITY BILLING page.
ELECTRICITY RETAILERS LOVE BILL PAYERS!
WHOM JUST PAY THE BILL!
Electricity Usage Versus Cost Analysis
Whilst electricity providers like to show you the usage breakdown of your electricity bill, make sure you understand how to work out the cost breakdown. The usage breakdown is often supplied by the electricity provider. Householders seeing a low usage figure for peak electricity, could think they are doing well trying to keep costs down. When in fact the cost breakdown may show they are not, when compared to a fixed rate tariff. Whilst we are not going to draw a direct comparison between the TOU & a fixed tariff here, we want to make you more aware you primarily need to understand the cost breakdown, to keep the bill minimised. We have worked out an example cost breakdown for you, clearly showing you how only small increases in peak electricity usage, can make big differences to quarterly electricity bills!
As you can see the shoulder usage is similar to the shoulder costs as a percentage and as much of this as possible should be shifted to off-peak use. The low off-peak tariff, whilst having 40% usage rating, actually costs you little at 23% of the bill. Whereas the peak electricity usage whilst low at 13%, is actually costing you 31% of the bill.
High cost peak electricity is used often by this Sydney home and we know they are trying their best to keep it reduced. Like for many householders it is difficult if not sometimes impossible to reduce / use power during this time of need. Visit SYDNEY HOME LIVE ELECTRICITY DATA for more of an insight.
Remember it is possible to save a lot off the electricity bill by reducing peak electricity usage. Converting more electricity usage from peak to shoulder or off-peak and by moving shoulder usage to off-peak, will further save you.
Electricity Bill Discount Offers
Whilst any discount on electricity charges is part of the solution for reducing electricity costs, it is not the end solution. If you stop here you will remain being just a BILL PAYER! We want you to understand all their is about electricity usage, billing and costs. This is the secret to being able to understand how to reduce the bill!
Many homes having 7%, 10% or 12% discounted electricity rates do little more in the quest to reduce the bill!
Being aware of all of the terms and conditions with any offer is the first priority. You may discuss:
Contract term and early termination fees.
Being able to switch back to the old tariff.
What is the discount off exactly?
Any increases to current services charge rates.
It always pays the do the homework and importantly read the Terms And Conditions.
"I found your website when I decided to analyse what my electricity bill really meant. Thank you so much. Clear information and lots of it. Interestingly, I did the numbers on switching providers using one of the big switching companies, and found that the savings, with the discount, would have been about a dollar onto my current bill, and of course would have cost me more should I be one of those who don't pay on time. Invaluable public service, and I'll come to you first when I want an audit."
Sharp Electricity Rises Forecast
As you are aware Australia's domestic energy bills are still on the rise, after recent years of large increases!
2011 - 2013 Forecast 60% [July 2011 18%] 28% Still To Go!
2013 - 2014 Planned 33%.
Inflation every year will add 3% - 5%
Coal contracts per ton have recently increased by 500%.
Carbon tax could be $25 per ton.
NSW households will further be billed $12 for the blowout of the recent Gross Feed applications.
According to IPART's [Independent Pricing & Regulatory Tribunal] review of regulated retail tariffs & charges for electricity during the period 2010-2013 we can expect the following electricity price increases. Quote:
"Electricity prices will increase substantially as a result of this decision. Prices will increase by between 20% (for Integral Energy) and 42% (for Country Energy) if the Commonwealth Government's Carbon Pollution Reduction Scheme (CPRS) is not introduced. If the CPRS is introduced from 2011/12 as planned, the price increases over the next 3 years will total 46% to 64%.
The main reasons for these increases are higher network prices which have recently been determined by the Australian Energy Regulator and the proposed introduction of the Carbon Pollution Reduction Scheme."
Based on the average households daily usage [18 kWh to 20 kWh], where annual usage is 7000 kWh a year, Aussie homes can expect to pay during 2011/12 around:
- Energy Australia $1513
- Integral Energy $1619
- Country Energy $2063
Visit LINKS page to learn more about IPART's review.
Small Electricity Price Increases Make A Big Difference!
Are you aware of the effects of small increases in electricity charges and your diminishing profit from your gross feed solar pv system? You should be! Learn more here about REDUCED SOLAR PV GROSS FEED GAIN
What is the compounded effect of ONLY a small 5% increase in electricity costs over 25 years? See our 5% ELECTRICITY RISE REPORT