A Guide To Regulatory Changes Part 2 : Tariff Structure & Time Of Use (TOU) - Goliath Solar & Electrical

A Guide To Regulatory Changes Part 2 : Tariff Structure & Time Of Use (TOU)

Confused About Your Electricity Bill?

You’re not the only one! With the latest updates to the rates structure, just when you thought you finally mastered reading your electricity bill it’s going to look different again! Fortunately there is some good logic behind the recent changes, and several benefits to make it worth your while navigating the information and even adapting your energy usage patterns where possible.

Solar Energy Uptake In SA

South Australia now has approximately 33% of dwellings with rooftop PV (photovoltaic) Solar installed – the highest proportional penetration of all Australian states and territories, and among the highest proportional uptake in the world.

Who would have thought the city of churches would be among the highest proportional solar uptake in the world? Take a bow South Australia!

Now this win for sustainable living once again comes with some constraints and challenges for our network, hence the new Tariff Structure which has been introduced with the Regulatory Changes For Smarter Homes.

In this blog post we will dive into the details of the new Tariff Structure, which is the second key change currently impacting your solar installation and solar savings the most.

Traditional Meter
(Non-TOU Compatible)

Electronic Meter
(Non-TOU Compatible)

Smart Meter – TOU Compliant

Changes to Tariff Structures

With so many homes and businesses in South Australia installing rooftop PV Solar, just imagine how much solar is being exported during the peak sunlight hours 10 am – 3 pm, versus the demand again on the grid late at night when the sun is down and you’re at home cooking the family dinner while cranking the aircon.

As we discussed in our Part 1 Guide, the SA power grid simply isn’t built for the influx of solar energy that’s going back into the grid during those times of peak solar production. Hence the need for some regulation to help protect our power security.

The new regulation to Tariff Structures is designed for electricity retailers in South Australia to provide customers with a Standing Offer, including a Tariff Structure (which incentivises electricity usage in low demand periods), called Time Of Use, or TOU for short.

Sounds awesome, who’s going to complain about cheaper electricity when you can get it! What we should also mention however, is that electricity rates will slightly increase in higher demand periods.  

Whilst we flagged the impact back in April 2020 to our existing customers, as a heads up regarding the changes ahead, we are happy to note that power prices haven’t increased as heavily as we had first anticipated.

How Does TOU Work?

A TOU plan from your electricity retailer will outline different electricity costs based on the specific times of the day you use the power.

But how do they know exactly when I’m using that precise amount of power?

This is made possible by using the data collected by the digital smart meter required for all solar systems installed here in South Australia. The meterrecords in 30 minute intervals how much electricity is drawn from the grid and also exported back into the grid.

So let’s look at the break down of the various types of rates, based on the time you draw electricity from the grid:

1 am – 6 am Off Peak Rate

Charges possibly as low as 50% of the typical flat rate price will apply during the periods where demand on the grid is low. A great option for those stinking summer nights to run the air con guilt-free and even better in the future when we’ll have an electric car requiring charging overnight.

10am – 3pm Solar Sponge Rate

The Solar Sponge Rate will usually apply to a period of time each day when solar generation in South Australia is generally high, such as 10am to 3pm. Charges can be as low as 25% of the flat rate price during these periods.

6am – 10am / 3pm – 1am Peak Rate

Peak Rate pricing periods are generally higher, around 125% of the flat rate price, and you guessed it – apply when there is most demand for energy from the grid.

Pro Tip: Don’t forget in summer, based on panel orientation with east/west considered even more these days for new solar installations, your solar can start working as early as 7 am and work until 7 pm to help offset the price increase in this period.

Standing Offer & TOU Rates Comparison

Let’s put this into perspective with a comparison of electricity costs as advertised by the AGL Standing Market Offer.

Flat Rate 

General Usage | 37.73c per kWH GST Inclusive

Supply Charge | 88.429c per Day

TOU Rates

Off Peak | 30.73c

Solar Sponge | 24.431c

Peak | 44.59c

Supply Charge | 88.429c

The Silver Lining

Many people think they won’t rely on the grid for electricity during the Solar Sponge periods (when the lowest energy rates apply), but don’t forget – South Australia isn’t always sunny. There are days in winter when not even a 6.6kW system will generate up to 1kW of solar production. Imagine your 13kW system only making a lousy 2kW based on the miserable day which is too wet and cold to leave the house. So you’re there, cranking the reverse cycle aircon and warming up some soup on the stove top.

All of a sudden, your electricity costs are 13c per kWh cheaper than a flat rate standing offer!

What’s The Best Offer I Can Get?

Now comes the pain negotiating for a better deal, but like most things in life it pays to shop around to see what’s available.

For example, you only have to look up AGL Essentials Plan to see a better TOU plan, saving you even more on your electricity bills than the flat rate standing offer!

TOU Rates

Off Peak | 26.73c

Solar Sponge | 21.25c

Peak | 38.574c

Supply Charge | 76.92c

How To Save Even More

Put simply it’s time to change our behavioural patterns with our electricity usage. Look to get your dishwasher, washing machine and other electrical items operating in the Solar Sponge time-window if you can.

We completely understand this isn’t always possible, I mean the dishwasher is full after slaving away cooking dinner for the family, you’ve had a horrid day, kids finally have settled, it’s 9pm and you have a Netflix show to binge watch. Well, see if you can put a time delay on and get the dishwasher to come on in the Off Peak window to reduce your electricity costs by 50%.

In terms of energy usage scenarios, every situation is completely different and as the department of mining has summed up perfectly in their TOU Fact Sheet, it does suggest in Case Three – when behavioural changes for electricity usage can’t be changed to Solar Sponge or Off Peak times, that staying on a flat rate contract and reviewing at a later stage may be your best option.

Our Advice

We’d love to be able say from the get-go, with 100% confidence what the best rate plan option is for every customer installing solar, however every situation and electricity usage pattern is different.

When calling any electricity retailer, you are at the mercy of the call centre consultant, how much advice (correct or not) they will give, and the plan they will offer to keep your business. Here at Goliath, we are happy to give some general guidance and we keep up to date monthly with electricity retailer advertised plans, however please note – changes can be made daily by electricity retailers.

You may wish to speak to your retailer about their plan offerings or visit the government’s Energy Made Easy website to compare offers. You can also find Time Of Use Tariff Offers on retailers’ energy price fact sheets, via their own websites.

We strongly recommended a visit to Energy Made Easy, especially after you’ve had a few electricity bills since having solar installed. Reason being, you can enter your energy bill data and get matched to the best plan available, based on your individual circumstances.

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