Time of Use vs Single Rate Energy Tariffs – Which Offers the Better Deal?

Energy tariffs – what are they? What are the different options? Which is best? These are questions you may not have thought about before, but with rising energy costs, understanding your options and weighing up single rate vs time of use can help you make decisions that will save your household every quarter when the bill comes in. 

What is a tariff?

An energy tariff is the price you pay for the electricity you use. The tariff options available to you will vary depending on who your energy provider is, where you live and the type of meter you have. While most energy plans come with a single rate, in some cases, you may be able to choose your tariff.

Single rate tariff

A single rate tariff (also known as flat, standard or anytime rate) is when you pay the same rate on your electricity, no matter what time of day you consume energy. With no peak or off-peak periods to consider, the single rate is typically lower than the peak time rate on a time of use tariff. 

This option is great if you typically use most of your energy (including appliances like a dishwasher or washing machine) in the evenings from Monday to Friday. You also do not need a smart meter to have a single rate tariff plan.

Time of use tariff

A time of use tariff is when you pay different energy rates depending on the time of day you use electricity. Energy providers will typically divide these times up into three main periods (though some may offer even more):

• Peak – this period typically applies in the late afternoon to evening, Monday to Friday. This is usually when energy demand is the greatest and therefore costs are the highest.
• Shoulder – This is the period between the peak and off-peak periods. Consuming energy during this time is cheaper than during peak periods, but not as cheap as during off-peak.
• Off-peak – this is the period when energy demand is typically the lowest and therefore is the cheapest time for you to consume energy. This will usually be overnight and on Saturdays and Sundays.

Choosing a time of use tariff is a great option if you typically are out and not consuming energy during the evenings, Monday to Friday, and if you’re home during weekdays or on weekends and tend to use your appliances more during these times.

If you are considering a time of use tariff, you will need a smart meter installed.

Single Rate vs Time of Use – which should I choose?

Choosing the tariff that suits you will come down to your energy consumption habits, if you’re open to potentially changing when you use the most energy and whether you have specific energy equipment in your home.

If you don’t have a smart meter or solar system, and you’re not interested in installing either of these in your home, a single rate tariff will be your only option. 

If you have a smart meter and don’t use most of your energy during peak periods, or you’re able to drastically shift your energy habits to use electricity outside of these periods, a time of use tariff may be a good option for you. A time of use tariff can also be a good option if you have a solar system and/or solar batteries in your home. This will allow you to store energy to be used during those peak periods, saving your grid power usage for cheaper periods. A power consumption or energy monitor is another device that can be helpful if you’re considering a time of use tariff. These devices allow you to track your energy use and see what periods you’re currently consuming the most electricity in. This can help you to adjust your habits to better suit your tariff. 

Looking for more ways to save on energy costs?

Installing a solar energy system or batteries in your home can be a great way to complement your energy-saving efforts, especially if you use a time of use tariff. If installing a new system or adding batteries to your existing setup is something you’re considering for your home, we can help you find the perfect option for your property. Contact the NewAge Air team today for a free quote.