Understanding electricity tariffs can help you compare electricity plans and choose the right one for your needs. If you're thinking about changing your current tariff or switching energy providers, it's important to consider the following factors.

Your tariff determines how much you’re charged for any electricity you use; there are several types of tariffs you may be eligible for. The most appropriate tariff for you depends on your location, usage times, and whether you use high-energy appliances.

Upgrading your electricity meter may be required when switching to certain tariffs. New meter installations may involve costs and must be performed by a qualified electrician. If you’re interested in changing tariffs, you’ll need to speak to your retailer.

Different providers may offer varying rates for the same type of tariff so it pays to compare.

What is an electricity tariff?

An electricity tariff dictates the cost of your electricity consumption. Typically, your home's wiring and meter type determine your tariff(s). In Australia, the Australian Energy Regulator (AER) or Victoria's Essential Services Commission annually reviews and approves these tariffs to protect consumers from overpaying.

Types of electricity tariffs

Australian electricity retailers offer several common tariff structures:Here are the four most common

Electricity Tariff Types in Australia

1. Single Rate Tariff (Standard or Peak Only): This is the most straightforward option, featuring a consistent flat rate for electricity usage at any time, along with a daily supply charge. There are no differentiated peak or off-peak periods.
2. Time of Use Tariff: This tariff divides the day and week into peak, off-peak, and often shoulder periods, as defined by electricity distributors. Usage charges are highest during peak demand times and lower during off-peak and shoulder times to incentivise energy consumption during periods of lower demand.
3. Controlled Load Tariff (Dedicated Circuit): Specifically designed for high-energy appliances like electric hot water systems, floor heating, or pool pumps, this tariff provides cheaper electricity rates because the appliances can run at off-peak times. For this tariff, your appliances must be wired for controlled load, meaning they need their own electrical circuit and possibly a separate meter. This could lead to an additional daily supply charge besides the main property meter's charge.

4. Demand Tariffs: These tariffs include an extra charge based on the intensity of electricity usage during high-demand periods, in addition to standard usage and supply charges. This structure aims to encourage customers to shift their high energy consumption to off-peak times. Retailers calculate demand charges differently for example some charge based on the highest usage within a specific timeframe while others, or the average peak usage over a defined period.

If your property has solar panels, there is also a solar feed-in tariff. This means that the extra electricity your system produces and sends back to the electricity grid can earn you credits on your bill. It's important to note that these feed-in tariffs are determined by individual energy retailers and rates can differ. The exception is Victoria, where the Essential Services Commission establishes a minimum annual rate effective from 1 July. Some retailers might also apply a daily charge for solar metering.