Australian households increasingly face a choice between two tariff shapes: a single rate (also called flat or anytime), where every kilowatt-hour costs the same whenever you use it, and time-of-use (TOU), where the price depends on the time of day. One of them is not universally cheaper. The winner depends entirely on when your home uses power, and that is a knowable fact, not a guess.
How time-of-use works
A TOU tariff splits the day into windows, each with its own rate:
- Peak: the expensive window, typically weekday late afternoons and evenings, when the whole grid is busiest.
- Off-peak: the cheap window, typically overnight, and on some tariffs also the middle of the day when solar floods the grid.
- Shoulder: a mid-priced window between the two, on some tariffs.
The exact windows and rates vary by network area and plan, so read the specific plan's detail rather than assuming. TOU requires a meter that records when you use power, which in practice means a smart meter. Some networks also offer demand tariffs, which add a charge based on your highest half-hour of usage in the month; treat those as a separate, more advanced beast.
Who tends to win on TOU
The pattern is simple: TOU rewards households that can move usage out of the evening peak.
- You are out at work most weekdays, so your big usage is already overnight and weekends.
- You can schedule the heavy appliances: dishwasher, washing machine, dryer and pool pump on timers, hot water heating overnight or midday.
- You charge an electric vehicle, which is the biggest schedulable load a home can have.
- You have solar and a tariff with cheap midday rates, letting you top up storage or run appliances when both sun and grid are cheap.
Who tends to win on a single rate
- Your home is busiest exactly when peak pricing applies: family dinners, heating or cooling in the evening, everyone home by 5pm.
- You cannot or will not shuffle usage around, and do not want to think about the clock. Predictability is worth real money in avoided peak charges.
- Your usage is low overall, where the supply charge dominates the bill and rate gymnastics change little; our bill reading guide shows how to see which charge dominates yours.
A TOU tariff with a steep peak rate can cost an evening-heavy household noticeably more than a decent flat rate. "Smart" does not automatically mean cheaper.
How to compare the two fairly
The only honest comparison uses your own usage pattern, and your interval data makes it possible: with a smart meter, your retailer's app (or a data request) can show usage by time of day. From there:
- Work out your peak share. Roughly what fraction of your usage lands in the plan's peak window? Evening-heavy homes commonly sit well above the level where a flat rate wins; night-and-weekend homes sit below it.
- Cost each tariff against that pattern. Multiply your kWh in each window by that window's rate, add the supply charge, and compare totals for the same period.
- Cross-check flat-rate plans with our calculator. It models single-rate plans plus controlled load, compared like-for-like across every retailer you add; pick your State and, in the six eastern States and Territories, import real plans for your postcode. If you are costing a TOU bill against it, use a blended rate: total usage cost for the period divided by total kWh, which turns your TOU bill into an equivalent flat rate for comparison. Treat that as an estimate.
One more thing to check before switching tariff type: moving from flat to TOU (or back) is a meter and network question as well as a plan question. Not every plan is available on every meter configuration, and a controlled load interacts with TOU differently on some networks; our controlled load guide explains that separate circuit.
The practical rule
If you can shift load and your evenings are light, TOU is usually the better shape; if your life happens at 6pm and you value not thinking about it, a sharp single rate is very hard to beat. Decide with your interval data, not the brochure, and whichever shape you pick, compare retailers within it: the gap between the best and worst plan of the same shape is usually bigger than the gap between shapes.