Understanding peak & off-peak electricity

After a busy day at work, returning home to unwind with Netflix and attend to household chores is a familiar routine for many Australians. However, this seemingly harmless scenario may be costing you more than you think.

Electricity pricing in Australia can be a complex topic, especially when it comes to peak and off-peak rates. Knowing the difference is key to managing your energy costs efficiently.

Peak prices usually occur during high-demand periods, like weekday evenings after work, when people use appliances such as ovens, TVs and air conditioners. These times strain the grid, leading to higher prices.

Off-peak rates are lower and apply during periods of lower demand, such as overnight or on weekends.

Understanding these pricing structures can help you decide when to use energy-intensive appliances. For example, doing laundry or running your dishwasher during off-peak hours can result in significant savings.

We'll also discuss other factors affecting electricity prices, such as time-of-use tariffs and the influence of renewable energy. By the end, you'll have a better grasp of how electricity pricing works in Australia and how to make informed choices to lower your energy costs.

What does “peak time” mean?

Peak electricity hours are those periods of the day when electricity is most expensive due to high demand.

This is when the electricity grid supplying power to millions of Australians is under significant strain. During these peak hours, households typically use power-intensive devices such as heaters, TVs, and washing machines, placing a heavy load on the grid.

As a result, electricity retailers often raise their prices to reflect the increased demand. Peak electricity times can vary by state, but they generally fall between 3 pm and 9 pm on weekdays.

What does “off-peak” mean?

Off-peak electricity hours are the times of day when electricity is the least expensive due to low demand. Unlike peak hours, off-peak times experience significantly less demand for energy.

This typically occurs between 10 pm and 7 am, when most people are either asleep, not running the aircon, or on a night shift away from home. Energy retailers charge lower rates during off-peak hours, making it an ideal time to use energy-intensive appliances or charge electric vehicles.

What does “shoulder” mean?

Surprise - there’s a secret third option when it comes to this particular topic. We’ve already talked about peak times and off-peak times where your electricity is concerned, but shoulder is another consideration.

Shoulder times refer to the periods between peak and off-peak electricity times. During shoulder times, energy demand falls somewhere between the high demand of peak hours and the low demand of off-peak hours.

As a result, electricity charge rates during shoulder times typically average between the rates of peak and off-peak hours.

Electricity tariff types

Figuring out the most suitable electricity tariff depends on your household’s electricity consumption patterns and needs.

Single rate tariffs

This is a tariff that offers a consistent rate for electricity consumption regardless of the time of day. This means you pay the same amount no matter whether you use electricity during peak or off-peak hours.

Many Australians prefer this tariff for its simplicity and convenience. It's also commonly referred to as a standard or flat rate electricity tariff.

It’s ideal for you if:

• You stick to a typical work schedule, using appliances during peak hours and minimising usage during off-peak times.

Time of use tariffs

These are also known as variable rate tariffs, and these vary based on the time of day you consume electricity.

Electricity consumed during peak hours incurs a higher cost compared to off-peak usage. Opting for this tariff can result in significant savings if you adjust your usage to align with off-peak times.

It’s ideal for you if:

• You have the flexibility to use appliances during off-peak hours and reduce your usage during peak periods.

Controlled load tariffs

These controlled load tariffs apply to specific high-energy appliances, such as hot water systems, underfloor heating, or pool pumps, which are metered separately.

These tariffs provide a cost-effective way to manage the electricity consumption of these appliances without significantly increasing your overall bill. However, electricity is only supplied to these appliances for a limited number of hours each day.

It’s ideal if:

• You have large, power-hungry appliances in your household that operate at specific times daily.

Demand tariffs

A demand tariff combines standard electricity charges with an additional fee known as the "demand" or "capacity" charge. This charge is determined by the highest energy consumption recorded by household appliances during a specific period and is added to the standard electricity rates.

While traditionally used in businesses, these tariffs are now being implemented in residential households to promote energy-efficient practices.

It’s ideal if:

• You are highly conscious of your electricity consumption. These tariffs often offer lower standard electricity rates.

Retailers peak/off-peak times

At Compare Energy, we want to ensure that you understand exactly what the timings are for peak and off-peak electricity usage.

Peak and off-peak usage varies depending on the retailer and even the state you’re in. Take a look for your retailer below:

EnergyAustralia:

Note: Off-peak and peak hours can vary slightly between different distribution networks in Victoria and NSW.

AGL

Note: Please note that peak and off-peak electricity times can vary between different retailers and distribution networks.

OriginEnergy

Please note that Origin Energy also offers a five-day time of use tariff or flexible pricing tariff with varying peak and off-peak times. The above times are based on the defaulted two-period time of use tariff in Victoria and Origin's seasonal time of use tariff in NSW.

Am I on peak or off-peak time?

You can typically find out if you are on peak or off-peak electricity times by checking your electricity bill or contacting your energy provider.

Most providers will clearly outline the different rates for peak and off-peak usage on your bill. Additionally, some providers offer online portals or mobile apps where you can track your usage in real-time and see whether you are currently in a peak or off-peak period.

Another option is to check your provider's website or contact their customer service for information on the specific peak and off-peak hours for your area.

Connect today

If you’re struggling with your understanding of peak and off-peak electricity tariffs, why not chat to our friendly team? We’ll help you to get connected to an energy provider that makes sense.

You can typically find out if you are on peak or off-peak electricity times by checking your electricity bill or contacting your energy provider.