25 April 2024

Watch out, time of use and peak demand billing have some serious pitfalls

| Morgan Kenyon
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man checking smart meter

If your home has a smart meter, chances are you’re already on a time of use or peak demand billing cycle. Photo: Thomas Lucraft.

The days of meter readers trundling into Canberra backyards and manually recording energy use are rapidly coming to an end.

In 2017, the Australian Energy Market Commission ruled all newly installed meters must be ‘smart’. A smart meter not only records and reports how much electricity you use, it measures your consumption in kilowatt hours (kWh).

For homes looking to reduce their power bills, smart meters and the plans they offer are an attractive option. But beware – if ‘time of use’ or ‘peak demand’ plans don’t suit your energy consumption style, they could cost more money than they save.

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For the 30 per cent of Canberran homes now equipped with a smart meter, ‘time of use’ plans are designed to save on power taken from the grid when demand is low.

Part of Luke Meddemmen’s role as a lead energy consultant for Huglo Solar is to advise locals on how to take advantage of different power systems.

“For ‘time of use’, energy retailers charge more during peak periods when most people are getting ready for work or arriving home,” he says.

“There are shoulder periods either side that cost less, but power is at its cheapest overnight and in the early hours of the morning, which are considered off-peak.”

Luke says time of use can help homeowners control how much they pay for power. But for those working “9 to 5” jobs or families with young children, scheduling electricity use outside of peak periods can be difficult.

“If you’re getting ready in the morning and arriving home at night the same time as everyone else, you’re unlikely to save without making some lifestyle changes.

“Consider scheduling your washing machine, dryer and dishwasher to run at off-peak times. If this isn’t possible, avoid running them all at once.”

A ‘peak demand’ plan consists of three parts: a fixed charge, a supply charge, and a peak demand charge.

Fixed rates are usually quite low, charged for daily access regardless of how much energy is used. The supply charge is based on the amount of energy consumed over the billing cycle.

The bulk of the `peak demand’ plan, however, is the peak demand charge.

“This is based on the maximum level of demand a household puts on the network during peak hours, over the course of a month,” Luke says.

“Your highest demand day will be applied to the rest of the month, which can come back to bite you if you don’t plan carefully.”

Whether a household does or doesn’t have a battery system will affect the power savings a `time of use’ or `peak demand’ plan can generate.

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“This is where a solar battery system becomes really useful. If your battery becomes active from about 5 pm and carries you through the peak period, you could negate that charge almost completely,” Luke says.

“A lot of people without batteries end up selling their excess back to the provider during the day, only to buy it back at a loss during times of high demand.

“The trick is to plan ahead and size your system appropriately if you want to save on electricity.”

Keep in mind that neither ‘time of use’ or ‘peak demand’ plans are compulsory, but some retailers won’t provide other options. So it pays to check which one your retailer has you on.

“Always double check, because when you have a smart meter installed, your retailer will likely put you on one or the other without really explaining how it works.”

If you need advice on how best to reduce your energy bill, get in touch with Huglo Solar.


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Smart meters are basically a way to allow power companies into your home, and charge you a fortune – in short you’ve been had, if you installed a smart meter.

I would disagree. Since I have installed solar/battery/smart meter, Origin has paid me far more than I have paid them.

Capital Retro11:07 am 29 Apr 24

But was was your capital outlay?

I’ve looked at doing what you have done several times in the last 10 years but when I crunch the numbers it doesn’t stack up.

I’ve also tried double glazing and heat-pump hot water. Both those ideas were overpriced and they underperformed.

Capital Retro – In my case, I massively over specced the solar (16kw) to provide for future needs and bought a Tesla battery for a total cost of $42k ($20k was an interest free loan, repaid over 10 years through ACTgov subsidy). I also bought the more expensive solar panels rather than the cheap Chinese ones.

I was paying $1k a quarter on electricity due to having a large house and heated pool etc. I import very little power and just mainly use the Tesla battery over night. For the last quarter, I had a $300+ credit due to generating far more electricity and exporting it to the grid.

At current electricity costs and rebates etc, I am looking at making my money back in around 8 years, after which I will have solar panels that are guaranteed for at least the next 15 years and generating free electricity. The battery, who knows how it will perform after its warranty?

If I was going to do it again, I’d skip the Tesla battery as it’s not worth the $20k+ and put in a smaller 10kw array which would pay for itself in about 5 years at current costs/rebates.

The first thing I would recommend to anyone is solid insulation. Roof, then wall, then under floor. Until that is sorted, there’s no point in looking at anything else.

$20k? I paid $10,500 for my PW2 just over 3 years ago. Going price is currently $12-$15k and I can get a second one now for $11k.

Capital Retro12:28 pm 01 May 24

Thanks Bob and I hope everyone contemplating reduction of their energy costs notes your last paragraph advice.

Also good to see someone giving an honest opinion of the poor cost benefit of those large brand named batteries.

drewbytes – You paid $10.5k installed? I think the cheapest installed price I have ever seen was $14.5k. The price of the powerwall has both gone up and the Australian dollar has gone down recently.

I remember that I did the math at the time and if I empty it or come close every night, it MAY pay itself off around the 10 year mark… right when the warranty runs out so it’s probably not worth the cost

The app interface is pretty interesting though, being able to look up how much power you have generated and used and at what times.

Bob, yep, it was a pretty special deal at the time which I couldn’t pass up. Wish I’d got a 2nd one at the same time, I would have got two for under $20k. I haven’t had an electricty bill in 3 years and for around 6 months draw almost nothing from the grid.

Good recommendations at the bottom! I would suggest to put closing gaps and stopping drafts at the very top of the list. These account for the majority of your heat loss/gain. Especially doors,windows and extractor fans need to be sealed. Cheap insulation strips can be bought in bunnings. There are commercial products or very cheap and easy diy solutions to seal extractor fans when not in use

Capital Retro8:26 am 26 Apr 24

It was a lot simpler (and cheaper) back in the days of constant coal fired electricity.

Being smart is really dumb.

Yep. Was highly predictable just how many people could die from their noxious and toxic outputs into the atmosphere.

As always, airy fairy dribbling from the master dribbler.

if you think coal fired electricity is constant, you’ve also got another thing coming.

Capital Retro2:52 pm 26 Apr 24

Name me two people who have died then.

No matter what you think and believe it was a lot simpler. Deal with it.

I’d think many pensioners and vulnerable people who rely on reliable power to keep machines going for them, would be happy to stick with coal. Unless of course the greenists like the idea of a renewables-driven “silent cull” of the vulnerable? See heres the thing – the climate nonsense is just that, so what’s the real agenda behind the green push? Any takers?

Name victims ? The tobacco industry gambit.

Capital Retro1:58 pm 27 Apr 24

I can name two people in my family who died from the effects of smoking and I reckon everyone would know someone else who has succumbed so what is your point?

Capital Retro2:01 pm 27 Apr 24

You mean the “Soylent Greenists”?

Follow the money is what it is all about.

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