Choosing the right electricity tariff can save you hundreds of dollars a year — or cost you hundreds if you get it wrong. The two main options for Australian households are time-of-use (TOU) and flat rate (single rate) tariffs. This guide explains how each works, who benefits most from each option, and how to figure out which one suits your household.
How Flat Rate Tariffs Work
A flat rate tariff is the simplest option: you pay the same rate for every kilowatt-hour of electricity you use, regardless of the time of day. Whether you run your air conditioner at 2pm or 2am, the rate is identical. Typical flat rates across Australia sit between 28c and 38c per kWh in 2026.
The advantage is predictability. You don't need to think about when you use electricity — just focus on using less overall. This is why flat rate has been the default for most Australian households for decades.
How Time-of-Use Tariffs Work
Time-of-use pricing charges different rates depending on when you use electricity. The day is divided into three periods:
- Peak: The most expensive period, typically weekday afternoons/evenings (2pm–8pm or 3pm–9pm). Rates range from 40c to 55c per kWh.
- Shoulder: A mid-range period, covering weekday mornings and weekends. Rates range from 25c to 35c per kWh.
- Off-peak: The cheapest period, typically overnight (10pm–7am). Rates range from 15c to 25c per kWh.
TOU Rate Examples by State (2026)
| State | Peak (c/kWh) | Shoulder (c/kWh) | Off-Peak (c/kWh) | Flat Rate Comparison (c/kWh) |
|---|---|---|---|---|
| NSW | 45–55c | 25–32c | 16–22c | 30–36c |
| VIC | 40–50c | 24–30c | 15–20c | 27–33c |
| QLD | 40–48c | 22–28c | 15–20c | 25–30c |
| SA | 48–58c | 30–38c | 18–25c | 35–42c |
| WA | 42–50c | 26–32c | 16–22c | 28–32c |
| TAS | 38–45c | 22–28c | 14–19c | 25–29c |
| ACT | 38–46c | 22–28c | 14–20c | 24–28c |
Who Benefits from Time-of-Use?
TOU tariffs reward households that can shift their electricity usage away from peak hours. You'll likely save on TOU if:
- You're away during peak hours: If nobody's home between 2pm and 8pm on weekdays, most of your usage naturally falls into cheaper periods.
- You have solar panels: Solar generates during the day, reducing your peak and shoulder usage. Your evening peak usage may be modest.
- You own an EV: Charging your electric vehicle overnight on off-peak rates (15–22c/kWh) is dramatically cheaper than charging during peak hours.
- You can run appliances on timers: Dishwashers, washing machines, and pool pumps can be set to run during off-peak or shoulder periods.
- You have a battery: Batteries charged from solar during the day can power your home during expensive peak evening hours.
Who Should Stay on Flat Rate?
Flat rate is generally better if your household uses a lot of electricity during peak hours and you can't easily change that. This includes:
- Families with someone home all day: If a parent, carer, or retiree is home running appliances, heating, and cooling during peak hours, TOU could cost more.
- Households that can't shift usage: If medical equipment, home offices, or young children require consistent power use throughout the day, flat rate provides certainty.
- Heavy air conditioning users in summer: If you rely on cooling during afternoon peak hours and can't reduce it, the high TOU peak rate will hurt.
- People who don't want to think about it: Flat rate is simpler. If managing your usage times feels stressful, the savings from TOU may not be worth it.
How to Check Which Tariff Suits You
The best way to determine which tariff suits your household is to look at your smart meter data. If you have a smart meter (mandatory in Victoria, increasingly common elsewhere), you can see exactly when you use electricity:
- Log into your retailer's app or online portal and view your daily usage profile.
- Check what percentage of your usage falls in peak vs off-peak hours.
- If more than 30–40% of your usage is during off-peak and shoulder, TOU will likely save you money.
- If most of your usage is during peak hours, flat rate is probably safer.
The Savings Potential
Households that actively shift their usage to off-peak times can save $200 to $600 per year on TOU compared to flat rate. The biggest savings come from running high-energy appliances like dishwashers, washing machines, dryers, and EV chargers during off-peak hours. However, if you can't shift your usage, you could end up paying $100 to $300 more per year on TOU.
The key is awareness. Once you understand your usage pattern and the rate windows, you can make an informed decision. And with smart home devices, timers, and solar batteries becoming more accessible, more Australian households are finding that TOU tariffs work in their favour. A separate structure worth knowing about is the demand tariff, which some networks are rolling out by default alongside TOU.