Time of Use Power Plans
A time of use plan charges different prices at different hours. Power costs more when everyone wants it, in the morning and early evening, and less overnight when the network is quiet. Some plans go further and offer a block of free hours.
Whether that saves you money depends on one thing only: how much of your usage you can actually move. Not how much you would like to move. How much you will.
The three things to remember
The peak rate is higher than a flat rate, which is how the discount is funded. Only shiftable load saves you anything. And a plan can leave you worse off if you do not shift.
How the pricing works
This is the part the marketing tends to leave implicit. A time of use plan is not a discount bolted onto your existing rate. It is a redistribution: the off-peak and free hours are cheaper than a flat rate, and the peak hours are dearer than a flat rate.
| Period | Roughly when | Price against a flat rate |
|---|---|---|
| Peak | Weekday mornings and early evenings | Higher |
| Off-peak | Daytime and late evening | Similar or a little lower |
| Night | Overnight, often 9pm or 11pm to 7am | Lower |
| Free hours | A fixed window, often one hour a day | Zero, but funded from the peak rate |
If your usage pattern is fixed, and for many households it is, then moving to a time of use plan simply repays more of your consumption at the peak rate. A family cooking dinner at six, running the shower at seven and using very little at two in the morning is the exact profile these plans are priced against. The plan is not a scam and it is not free money either. It is a bet on your flexibility.
Working out your own break-even
Take a household using 800 kWh a month. Assume a flat rate of $0.30 per kWh, and a time of use plan at $0.40 peak and $0.18 night, with 30 percent of usage currently falling in the peak window.
Now the same household with a heavier peak, because someone is home during the day and the heating runs when it is cold rather than when it is cheap. Say 55 percent falls in the peak window.
Your retailer holds half-hourly consumption data for your meter and is required to make it available to you. That gives you your real peak share rather than a guess, and the guess is the part people get wrong. Ask for it, or download it from your account, before switching. It converts this from a hunch into arithmetic.
What is genuinely shiftable
| Easily shifted | Hard or unwise to shift |
|---|---|
| EV charging, which is the big one | Cooking, which happens when people eat |
| Dishwasher, on a delay timer | Lighting, which follows darkness |
| Washing machine and dryer | Showers, for most households |
| Hot water cylinder heating, if controllable | Heating, when the house is cold |
| Pool pumps and heated towel rails | Anything involving young children's routine |
The left column is where the case for these plans lives, and one entry dominates the rest. An electric vehicle adds a large, completely flexible, overnight load, and it is the single strongest reason to be on a time of use plan. Without one, the shiftable share of a typical household is smaller than people assume.
A free hour is funded from the rates charged in every other hour, and the window is usually placed where shifting is inconvenient, such as the middle of a weekday. Households that genuinely restructure around it can do well. Households that intend to and then do not are paying for a benefit they never take. Be honest about which you are before switching, because the plan is priced on the assumption that most people are the second kind.
Before you switch
Two other things that move the bill
The daily fixed charge is levied whether you use anything or not, and it varies substantially between plans. A low-usage household can be better off on a plan with a high unit rate and a low daily charge, and comparing unit rates alone will get that backwards.
Solar changes the picture again, because the question becomes what your exported power earns rather than only what imported power costs. Buyback rates differ widely between retailers and are frequently well below the price you pay to buy the same unit back later.
What this guide does not cover
Every rate above is an illustration rather than a quoted tariff. Plan structures, free-hour windows, buyback rates and fixed charges differ between retailers and regions and change frequently. Battery storage, solar sizing and controlled hot water arrangements each change the calculation and are not covered here. Take your own rates from a recent bill and your own usage from your retailer before deciding.
Related guides and tools
- Appliance lifetime cost guide, for the running cost side of the same calculation.
- Negotiating your bills guide, for lowering the rate rather than shifting the load.
- EV vs petrol running costs guide, for the load that makes these plans worthwhile.
- Average vs median guide, for reading the savings claims in the marketing.
Test Your Knowledge
Ten questions on peak pricing, load shifting and break-even.
Sources: arithmetic worked from stated assumptions using illustrative rates rather than any retailer's published tariff. Plan structures, rates and free-hour windows differ between retailers and regions and change frequently, so take your own rates from a recent bill and your own usage from your retailer's consumption data before deciding.