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What is a time of use tariff?
A time-of-use tariff involves varying electricity prices throughout the day. The tariff includes:
- Peak rates: These occur during weekday evenings when electricity is most expensive.
- Off-peak rates: Electricity is cheapest during overnight hours and on weekends.
- Shoulder rates: These rates are intermediate, less expensive than peak rates but more than off-peak, typically applying between peak and off-peak times.
Choosing a time-of-use tariff may suit you if:
- You spend evenings away from home during weekdays.
- You are at home during daytime hours or on weekends.
- Your household appliances, like washing machines, are used predominantly on weekends.
Some energy providers may offer additional rate periods beyond peak, shoulder, and off-peak.
To benefit from peak and off-peak pricing under a time of use tariff, a smart meter is essential. With a smart meter in place and if your electricity provider offers a time of use tariff, your billing will include two distinct charges: a usage charge and a supply charge.
The time of use tariff affects only the usage charge portion of your energy bill. Opting for a time of use tariff should be a deliberate choice on your part.
If you notice varying rates on your bill that suggest you are on a time of use tariff without having actively chosen it, it is crucial to contact your retailer immediately. Mishandling a time of use tariff can inadvertently lead to increased electricity costs.
What’s the best tariff to be on?
Choosing the right electricity tariff involves more than just seeking lower rates. It's essential to evaluate the entirety of an energy plan, including discounts, benefit periods, and any sign-up incentives.
Each tariff type affects your total energy expenses differently, necessitating thorough research to determine the most suitable option for your needs.
Here's a brief overview of household types that might find advantages in time of use tariffs compared to single rate tariffs:
| Tariff type | Good for homes |
| Single rate | Without a smart meter |
| Who use energy at all times of the day | |
| Who tends to use more energy during peak evening hours | |
| Time of use | Who want a smart meter |
| Who want to track and manage their energy usage | |
| Who use lots of energy during off-peak hours |
Should I choose a time of use tariff?
Wondering if a time of use tariff suits your needs? If you're mindful of your electricity usage patterns, opting for a time of use tariff could potentially reduce your bills by taking advantage of lower rates during off-peak periods.
However, keep in mind that while your tariff choice plays a role, other factors also influence your overall electricity expenses.
To ensure you're getting the best deal, it's advisable to compare plans from various retailers in your area, regardless of the tariff type you select. This approach helps you secure competitive rates tailored to your consumption habits.
Connect with Compare Energy
The best thing that you can do to decide on your tariff options is contact the team at Compare Energy on 1300 790 106. We’ll walk you through the best tariff option for you in your area so that you can get the best deal.
