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Off-peak, smart meters and time-of-use pricing
Most households use hot water and appliances before and after work which creates high energy demand during certain periods of the morning and evening. If you can shift your electricity use to other times of the day, many energy retailers offer cheaper rates that can save you money.
For some households, taking advantage of time-of-use pricing by using energy outside peak times may be an effective way to reduce energy costs. Time-of-use pricing means you're charged at several different rates, depending on the time of day you use energy. Prices are usually divided between peak (2pm–8pm weekdays), shoulder (7am–2pm and 8pm–10pm on weekends) and off-peak (all other times) with off-peak being the least expensive. Using off-peak hot water and smart (or interval) metering are two ways to make use of time-of-use pricing.
Hot water makes up 25% of household energy use in the average home so switching an existing storage hot water system to an off-peak tariff can save you money on your energy bill. With an off-peak storage hot water system, your water is only heated during the off-peak time period when energy prices are cheaper.
However, it's important to be aware that off-peak systems don't use less energy or produce fewer greenhouse gas emissions just because they're only heating water during off-peak periods. In fact, many off-peak systems can use more energy overall as they tend to be larger to store hot water for use whenever it's needed.
When it comes time to replace your hot water system, the best way to reduce energy use as well as your energy costs is to consider switching to solar, heat pump or high efficiency gas. If you're considering upgrading your hot water system it's important to choose one that is right for your situation. To take advantage of off-peak, your existing hot water system must meet your energy retailer's requirements. This could affect the size and type of hot water system you currently use. A special meter may be required to monitor hot water separately to the rest of your bill so check with your energy retailer to find out whether you can access this option.
A smart meter measures how much electricity you use and when, and sends this information back to your electricity retailer. Your retailer uses this information to make sure your electricity bill is accurate.
Smart meters can also do other things remotely, like measure the power quality at your home or business and notify your electricity distributor when the power goes out.
Your electricity retailer will be able to provide you with more accurate information about your electricity use through a website or app, that can help you understand how you use electricity in your home and find a better deal.
New types of prices
Electricity retailers are developing new types of prices that could help you save money. A smart meter will let you access these new prices.
If you're mainly using your electricity during off-peak and shoulder periods—or are willing to shift your usage to these times—a ‘time-of-use’ price could be cost effective. A time-of-use price is higher at peak times like weekday mornings and afternoons, when it is more expensive to produce and transport electricity, and lower at off-peak times.
If you decide to take up time-of-use pricing, the more electricity use you shift away from peak times the more you save. For example, you could turn your dishwasher on before going to bed rather than after dinner, or use your clothes dryer only on weekends. There are further savings to be made if you have appliances that use a lot of power, such as pool pumps, air conditioners or in-slab electric heating.
However, you should look at your household preferences carefully, to make sure you really can change how you use electricity at peak times.
If you would like a smart meter, or are unsure if you already have one, talk to your electricity retailer.
There are plenty of other ideas on Your Energy Savings you can take to reduce your energy bills.
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