Peak and off-peak electricity times explained
Knowing the difference between peak and off-peak electricity could make a huge difference to your electricity bill.
This article will help you understand what the different types of time-related electricity charges are, and how you can make sure you’re doing your best to lower your energy bill.
Why do peak and off-peak rates matter?
Your electricity bill is made up of a supply charge, which is a fixed, usually daily, charge you pay for access to the electricity from the grid, and a usage charge or rate, which is for the actual electricity that you use.
If you’re on a ‘single rate’ meter (which could be referred to as an ‘accumulation meter’ or ‘flat-rate’ meter), then you will be charged one flat price for the electricity that you use.
If you don’t have a single rate meter, you may have what’s known as an ‘interval’ or ‘time of use’ meter or a smart meter.
When are peak and off-peak rates?
Peak and off-peak rates are defined by the time that electricity is used.
Peak energy rates are charged when the electricity grid is likely to be used the most, like evening between 5 - 9pm. This is when people are likely to be at home, using appliances like the stove, oven, microwave or TV. With so many people doing this at once, it puts strain on the network.
Off-peak rates are when households are less likely to be using energy. Energy companies, in an effort to get households to use electricity at quieter periods to reduce strain, charge electricity at a cheaper rate during off-peak times.
There are also shoulder rates - this is usually the time between peak and off-peak.
What’s the difference in cost between peak and off peak?
The difference in price between off-peak, shoulder and peak rates will depend on your energy provider, but it is important you check ahead of finalising any energy contract.
For example, an off-peak rate can be 20c, per kilowatt hour (kWh. However, peak rates could be 40c, or even 60c per kWh..
While that doesn’t seem like much, consider all the appliances you have in your home that are kept on throughout the day - it adds up!
Do all energy providers have the same peak and off-peak times?
While energy providers might follow similar patterns for peak and off-peak times, it’s worthwhile checking with your provider in particular to be certain.
A common structure of peak, off-peak and shoulder times would be:
Time | Rate |
11pm - 7am | Shoulder |
7am - 4pm | Off-peak |
4pm - 11pm | Peak |
Using off-peak energy rates to reduce your electricity bill
Knowing when you are charged peak, shoulder and off peak rates will help you better understand your energy bill, and importantly, help you know what to do to reduce your bill.
Doing things like loads of washing or using the dishwasher during off-peak periods may help. If you’re unable to be home during off-peak times, use smart timers on your appliances so they can still run.
Are you on an energy plan that gives you the best rates for you?
Most households can choose from different kinds of energy plans to best suit their circumstances.
If you’re interested in taking advantage of a plan that provides peak and off-peak rates, then it may pay to look at your options and see what could work for you.
Important Information
What is the Reference Price?
The reference price is set by the Australian Energy Regulator (AER) for a financial year in relation to electricity supply to residential customers in the distribution region and is based on an assumed annual usage amount. Any difference between the reference price and the unconditional price of a plan is expressed as a percentage more or less than the reference price. The terms of any conditional discounts are shown, along with any further difference between the reference price and the discount applied if a condition is met, expressed as a percentage more or less than the reference price.
What is the VDO?
The Victorian Default Offer (VDO) includes a daily supply charge and usage charges (per kilowatt hour). Differences in tariffs across distribution regions reflect the unique costs of providing electricity services in each area. The difference between the VDO and the unconditional price of a plan, based on the Victorian Government’s annual reference consumption for domestic customers in the distribution region, is expressed as a percentage more or less than the VDO. The terms of any conditional discounts are shown, along with any further difference between the VDO and the discount applied if a condition is met, expressed as a percentage more or less than the VDO.
NSW, QLD and SA: Price is GST inclusive and is: the estimated lowest possible price a representative customer would be charged in a year for this plan, assuming all conditions of discounts offered (if any) have been met, based on the AER’s model annual usage in the distribution region as stated at the top of each table.
VIC: Price is GST inclusive and is: the estimated lowest possible price a customer would be charged in a year for this plan, using the Victorian Government’s annual reference consumption for domestic customers in your distribution region as stated at the top of each table and assuming all conditions of discounts offered (if any) have been met.
ACT: Price is GST inclusive and is: the estimated lowest possible price a representative customer would be charged in a year for this plan, using the Independent Competition and Regulatory Commission (ICRC) annual reference consumption for domestic customers in your distribution region as stated at the top of each table and assuming all conditions of discounts offered (if any) have been met.
TAS: The price shown is inclusive of GST and is the estimated lowest possible price a representative customer would be charged in a year for this plan, assuming all conditions of discounts offered, if any, have been met.
The general usage for products displayed in the table for Tasmanian postcodes is based on the median electricity usage of customers in Tasmania. The median usages are: 2,947 kWh/year for a Single Rate tariff, and 7,428 kWh/year for a Single Rate + Controlled Load tariff. These usage assumptions are based on the latest Typical Electricity Customers in Tasmania report released by the Office of the Tasmanian Economic Regulator. If the amount of electricity you actually use differs greatly from this estimate, your bill could be significantly larger or smaller than the charges listed for each plan.
Some plans may require you to meet certain conditions before a discount may become available to you. Check the energy provider’s plan information for details of all possible discounts that may apply and any conditions that need to be met to be eligible for these discounts. Some plans may have a minimum term longer than one year. In that case the total cost over the term will be much higher than the price (which is only for one year). Consider the provider’s detailed product and pricing information before making a decision to take out a new plan or switch electricity providers.
