Time of Use Tariff

How it differs from flat rate

Under a flat rate tariff, you pay the same rate per kWh regardless of when you use electricity - say 30¢/kWh morning, noon, or night. Under a TOU tariff, the same connection might cost:

• Peak (4–9 pm weekdays): 45–55¢/kWh
• Off-peak (11 pm–7 am): 18–22¢/kWh
• Shoulder (all other times): 28–32¢/kWh

These are illustrative figures - actual rates vary considerably by retailer, network, and state. Compare the energy fact sheets of your current retailer (retailers are required to publish these under the NECF) to see your actual rate structure.

Why TOU changes the solar and battery calculation

Solar self-consumption generates savings equal to the tariff you avoid. Under flat rate, every kWh of self-consumed solar saves you the flat rate. Under TOU, self-consuming solar during peak hours saves you the peak rate - considerably more. Conversely, solar generated at midday (shoulder hours under most TOU structures) saves less per kWh than flat rate would, if midday is the shoulder period rather than peak.

Battery storage is most valuable when the charge/discharge spread is widest. Charging a battery from cheap overnight power at 18¢/kWh and discharging during the 4–9 pm peak at 50¢/kWh creates a 32¢ spread. On flat rate at 30¢/kWh flat, storage arbitrage is worth at most the flat rate less the overnight cheap rate - a much smaller spread (often zero if there’s no distinct off-peak rate on a flat tariff).

TOU and smart inverters

Modern hybrid inverters and battery systems can be programmed to charge and discharge according to TOU periods - scheduling overnight grid charging during cheap periods and holding charge for the evening peak. This is sometimes called “tariff optimisation” mode in inverter settings. It’s worth configuring if you’re on a TOU tariff with a clear peak/off-peak structure.

Is TOU better for you?

Not always. It depends on your usage profile. A household that uses most electricity on weekday evenings (when the peak rate applies) may pay more on TOU than flat rate without behavioural change or storage. Running dishwashers and washing machines outside peak hours, or having a battery to cover the 4–9 pm window, makes TOU more advantageous. Your retailer’s energy fact sheet will show both tariff structures - most retailers offer a choice.