South Australia electricity prices fall below 20c kWh
For a long time, South Australians have paid the highest electricity rates in Australia, with ‘one-size-fits-all’ flat/anytime tariffs costing 30-40 cents per kWh. Now, South Australians can dramatically reduce their electricity bills just by switching to a new tariff type.Here’s your guide to the Time of Use tariff set to save savvy South Australians on their energy bills.
Time of Use tariffs explained
Time Of Use (also known as Flexible or ToU) tariffs have different prices for electricity at set periods of the day. When demand is low in Off-Peak periods the cost of electricity is cheapest. During the Peak period, when demand is high, electricity costs more.
A Time Of Use (ToU) tariff is now available in SA with three periods that apply everyday, during the following hours:
- Off-Peak = 10am – 3pm
- Shoulder = 1am – 6am
- Peak = 6am – 10am and 3pm – 1am
Why Time of Use is a good thing
The good news is that SA electricity plans with the new TOU tariffs offer a Peak rate from as little as 29 cents a kWh. The Peak rate is less than the anytime rate on the best publicly-listed plans from any of the big three retailers (AGL, Origin or EnergyAustralia). Use electricity on a Time of Use plan during Off-peak periods, and you can pay as little as 15 cents a kWh. That’s half the rate of most anytime plans! At Shoulder times, costs start from 19 cents a kWh. So it doesn’t take a whole lot of calculation to figure out that a Time of Use plan will help many households cut energy costs. I’ll also break down how solar homes could benefit too.
The reasons why SA electricity is getting finally cheaper
Up till now, the SA Power network only offered a flat rate tariff, charging a whopping 15.1c per kWh to your electricity retailer for every kWh you consume – the highest anytime network charge in Australia. Solar and non-solar homes can now buy more affordable power, particularly in the middle of the day for two reasons. The first and most significant factor has been the introduction of SA Power’s “solar sponge” residential Time Of Use (TOU) network tariff. The new off-peak network charge to your retailer, is a very low 3.8c per kWh between 10am and 3pm every day. It’s cheap to encourage households to use more energy and soak up the abundant solar energy in the grid.
The second factor driving retail price cuts in South Australia is the reduction in wholesale prices. Future wholesale prices have fallen particularly during daytime hours when there is often an excess of generation, thanks to plentiful solar energy. Renewables have pushed wholesale prices down and forced the network to introduce the new “solar sponge” tariff, benefiting everyone.
Who is offering the best Time Of Use tariffs in SA?
The table below shows the retailers currently offering the Time of Use tariff and a summary of the lowest cost plan they offer based on a non-solar household using 4,000kWh of electricity per year.
Cheapest Time Of Use electricity rates by retailer in South Australia
How do I get access to lower rates?
To get onto a lower-cost Time of Use (ToU) tariff, you’ll need to have an interval meter installed at your property. The interval meter measures electricity use in half-hour blocks, recording energy used in each TOU period. You can request an interval meter through your current retailer where they support Time Of Use tariffs.
As of July 16, 2020, only ReAmped Energy, Simply Energy, Kogan Energy, Powershop and Powerclub offer this Time Of Use tariff. If your current retailer doesn’t support time of use tariffs, or you would like to move to a better deal, then you can switch to a retailer offering this tariff. You will need an interval meter which your retailer can arrange. We contacted ReAmped Energy who advised that they will organise an upgrade to an interval meter (if required) at no cost – unless the meter box is seriously old or has issues that prevent an update. You should check with your preferred retailer on whether they charge for meter upgrades.
Time Of Use vs Anytime tariffs compared
ReAmped Energy currently offers the lowest-cost plan in the market based on the Default Market Offer usage of 4,000kWh p.a. and TOU split at 23% discount off the reference price. (Note: We have excluded Powerclub from this analysis because Powerclub’s market offers are linked to the wholesale price, so there is no way of knowing in advance what rate you might pay.)
TOU plans currently provide bigger discounts off the DMO reference price when compared to each retailer’s cheapest flat-rate Anytime plan:
- ReAmped Energy: 23% TOU v 14% Anytime
- Kogan Energy: 22% TOU v 20% Anytime
- Powershop: 21% TOU v 18% Anytime
- Simply Energy: 7% TOU v 7% Anytime
Do I need to change when I use energy to be better off?
In short, if you have an average usage profile and choose the right Time Of Use plan, you’ll be better off! Here’s an example using the Default Market Offer usage of 4,000kWh of electricity per year. The Australian Energy Regulator determined that an average non-solar household in South Australia using 4,000kWh would consume:
- 60.9% in peak period (6am-10am and 3pm-1am)
- 16.6% in shoulder period (1am-6am)
- 22.5% in off-peak period (10am-3pm)
At the time of writing the best Time Of Use tariff – ReAmped Energy Classic – has a discount of 23% of the Reference Price (with the 60.9%/16.6%/22.5% split), providing a $420 saving. The best anytime offer – Kogan Energy Market Offer – has a discount of 20% of the Reference Price.
Does the TOU tariff help solar owners?
Many solar owners may already be shifting some of their electricity use to self-consume their own cheap solar. However, there are still several circumstances that can make a Time Of Use tariff a cheaper option for those with solar. Here are two examples:
- the 1am-6am shoulder period can be used for winter heating, dishwashers, pool pumps, electric vehicles etc. In effect, the TOU shoulder tariff offers a second low cost window (after 10am-3pm) to provide more access to cheap power.
- the 10am-3pm off-peak window can be used to run multiple appliances that would typically exceed the generation capacity of your solar PV system, particularly on cloudy days such as air conditioning in summer, heating in winter, pool pumps etc.
Together the new off-peak and shoulder periods can help enable solar owners to increase their solar-self consumption (between 10am-3pm) without a high penalty when they import from the grid. Plus it offers an opportunity to access lower cost power beyond the hours when they have excess solar.
It gets better. Shift and save more
By shifting energy use (like running laundry appliances or dishwashers, pumps, air conditioners etc) from peak to much cheaper off-peak hours, households can make bigger savings. For example, an average household that shifted their usage to achieve a 40% peak, 30% shoulder and 30% off-peak load split would pay $1320p.a. for their electricity based on the lowest cost plan – ReAmped Energy Classic (getting a 27.9% discount off the reference price $1832p.a.). That’s a $500p.a. saving simply for shopping for the best deal and shifting appliance use to hours when it is cheaper to buy electricity from the grid. For more tips on how to shift loads, see our article on owning solar.
Disclaimer: ReAmped Energy is a partner retailer of WATTever. If you switch to ReAmped Energy, we may receive a referral fee. By switching with WATTever to our energy partners, you can share that referral fee by claiming a $50 Prezzee eGift card from us. Terms and Conditions for the eGift card apply
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