Changing Tariffs Guide
Energy Saving Guide
How to change tariffs to save.
Switching tariffs isn’t an idea on most people’s radar when shopping for cheaper energy. It should be. That’s because changing tariffs can be a pathway to lower electricity bills. However, it isn’t always easy to understand what tariffs are available. Or whether you can actually switch to another tariff.
Tariff switching made easier
We’ll unpack the three main tariff types, how to see if switching might save you money, look at the rules that apply to switching tariffs, and share practical advice on how to change tariffs. It takes a lot of digging through documentation from the various electricity distribution networks (who define the available tariffs) to find out what’s even possible. So, we’ve also pulled together a summary of the rules around changing tariffs to help households in the major contestable electricity networks across Australia.
- Tariff types explained
- How to see if switching tariff type could save money
- Tariff switching rules you need to know
- How to change tariffs
- Smart meter upgrades
1. Tariff types explained
There are three types of electricity tariffs.
Anytime tariffs keep electricity prices simple. Also called ‘flat rate’ tariffs, these have a single rate that applies whatever time power is used. Ultimately, Anytime tariffs reflect an average across the day. So, you might be paying a small premium for the retailer to smooth out the underlying costs (such as generation) that make up the usage rate you pay. Anytime rates have been the predominant tariff as basic accumulation meters were the only way of measuring power consumption until this century.
Time of Use tariffs split the day into 2 to 4 time periods. In each period, a different rate for electricity applies. This reflects the different costs of providing energy and network infrastructure at different times of the day. So, higher peak rates apply when demand is high in peak periods – and energy supply and network infrastructure are under pressure. At off-peak times when grid energy is abundant, consumers pay significantly lower prices. Some Time of Use tariffs include a Shoulder period between Peak and Off-peak.
Demand tariffs include a ‘capacity charge’ based on the biggest spike in energy use during a billing period. While usage rates will be lower, an additional daily capacity charge is applied across the billing period based on the highest consumption in a 30 minute period in the peak demand time window (usually between 2-8pm weekdays). This tariff is more common for business customers. Households will naturally be wary of their energy costs being impacted by their peak use during a single half-hour in a month. You’ll want to have a good understanding of your energy use across the month – plus the opportunity to keep your energy use in check – to consider moving to a Demand Tariff. If you have a battery to shield you from the demand charges then these tariffs are worth a look. However they are often not competitively priced so be certain of your choice before switching to these tariffs.
2. How to see if switching tariffs might save money
3. Electricity tariff rules
- the default tariff that is assigned when you have a new meter installed;
- what tariffs you can change to; and
- how often you can change tariff (tip – it’s usually only once every 12 months).
Electricity Tariff switching rules by State
|Network||Tariff Switching||Default tariff for new meter||Optional tariffs for new meter||Tariff change frequency||Source|
|Evoenergy||Anytime tariffs (10, 20 & 30) are closed to new customers and cannot be switched to.|
Switching permitted between Time Of Use and Demand tariffs.
Switching from Anytime to Time Of Use (or Demand tariffs permitted (likely requires smart meter upgrade).
|Demand (25)||Time Of Use (15)||Only one tariff |
reassignment per 12 months is allowed.
Time Of Use and Demand tariffs are the default for new meters
The Australian Energy Regulator (AER) has been championing a move to cost-reflective tariffs. When households add solar or their old meter is replaced with a smart meter – a time of use and/or demand tariff is usually assigned. If priced correctly, Time Of Use and Demand tariffs can enable consumers to reduce their overall costs. Lower bills are achieved by limiting peak-priced power use and shifting to use cheaper off-peak electricity.
4. Here’s how to change tariffs
Contact your current retailer if you wish to switch tariffs. They will request the network operator to make the change and inform you when it’s completed. If that change requires a meter upgrade, your retailer will organise that for you, usually at no cost.
Switching tariff strategies
If you’re thinking of switching retailers and tariffs at the same time, there are two ways to go.
1. Switch retailer first. Then, when the transfer is complete, ask your new retailer to change to your preferred tariff (using the rules below to guide you).
2. Alternately, you can change tariff with your current retailer. After the tariff change has been completed, then make the retailer switch.
Trying to sign up to a new retailer AND a new tariff type (not available to your current meter) upfront will be difficult. You’ll find that retailers online signup will only display plans with Tariff types available to your existing meter according to the rules of the network.
Check you can get back
A final thing that’s important to note. In most networks, if your existing tariff is “closed to new customers”, and you change to another tariff, you will not be able to switch back to your old tariff.
5. Smart Meter upgrades
Why smart meters matter
We’re big fans of smart meters and Time Of Use tariffs. They help households understand when they’re importing and exporting energy. Time of Use tariffs unlock off-peak hours with lower network charges and lower retail rates. Off-peak hours are now expanding! Networks are beginning to add off-peak hours around midday when there are high levels of low-cost renewables in the grid (find out more in our our solar sponge tariff article. This is set to grow, offering more households an excellent opportunity to buy cheap, low emissions power from the grid.
Households can take control, empowered with information about energy use coupled with access to affordable daytime off-peak rates. There are many benefits from shifting energy use. This starts with lower electricity bills. At the same time, it can support using more renewable energy while taking pressure off the network in peak periods.