Australia's electricity market gives most households a genuine choice between tariff structures. Flat-rate tariffs charge a single rate per kilowatt-hour regardless of when you use power. Time-of-use (ToU) tariffs split the day into periods — peak, shoulder and off-peak — each with a different price. The Australian Energy Regulator sets indicative ToU rates in each state's Default Market Offer, and real-market offers from retailers typically sit within a narrow band around these benchmarks.

The catch is that ToU is not universally better or worse. It is a bet on your own usage patterns. Get it right and you can save $200–$500 per year on a typical bill. Get it wrong and you may pay more than you would have on a simple flat rate.

How ToU tariffs are structured across Australian states

Peak and off-peak windows vary by state and by distributor, but the general architecture is the same: a high rate during the 3–9 pm weekday window, a low rate overnight and at weekends, and a mid-range shoulder rate for the rest of the day. The table below shows indicative 2025–26 rates drawn from AER Default Market Offer determinations and published market offers. Exact rates differ by retailer and distribution zone — always check your own bill or use the Energy Made Easy comparator for a personalised figure.

Indicative time-of-use electricity rates by state, 2025–26 (c/kWh incl. GST)
State Peak (3–9 pm weekdays) Shoulder Off-peak (overnight / weekends) Flat-rate equiv.
NSW 52–58 c 28–32 c 16–20 c 30–34 c
VIC 45–54 c 24–30 c 15–19 c 27–32 c
QLD 48–55 c 26–31 c 16–21 c 29–33 c
SA 55–65 c 30–38 c 18–24 c 38–45 c
WA (Synergy) 45–52 c N/A 14–18 c 31–35 c

South Australia stands out as the state where the gap between peak and off-peak is widest — making the tariff-choice decision most consequential for SA households.

Worked example: the 'home all day' household

Consider a retired couple in Sydney using 25 kWh per day. Their usage is broadly spread across the day: they run the washing machine at 11 am, cook lunch and dinner, watch television from 5–9 pm, and do a cycle of dishes after dinner. Their load profile looks roughly like this:

  • Peak (3–9 pm weekdays): 10 kWh/day (cooking, TV, dishwasher) — about 40% of daily use
  • Shoulder (7 am–3 pm and 9–10 pm): 11 kWh/day
  • Off-peak (10 pm–7 am): 4 kWh/day

On a flat rate of 32 c/kWh: 25 kWh × 32 c = $8.00/day in energy charges, or roughly $2,920/year.

On a ToU tariff (NSW indicative: peak 55 c, shoulder 30 c, off-peak 18 c):

  • Peak: 10 kWh × 55 c = $5.50
  • Shoulder: 11 kWh × 30 c = $3.30
  • Off-peak: 4 kWh × 18 c = $0.72
  • Total: $9.52/day, or roughly $3,475/year

Result: the home-all-day household pays about $555 more per year on ToU than on a flat rate. The flat rate is clearly better for this household.

Worked example: the 'out 8–6' household

Now consider a working couple in Sydney, also using 25 kWh/day, but with very different load timing. They leave at 8 am and return at 6 pm. They've set the washing machine and dishwasher on delay timers to run at 10 am. Cooking happens quickly between 7 and 8 pm, and the EV charges overnight from 11 pm to 6 am.

  • Peak (3–9 pm weekdays): 3 kWh/day (quick cooking, minimal TV) — about 12% of daily use
  • Shoulder (7 am–3 pm and 9–10 pm): 8 kWh/day
  • Off-peak (10 pm–7 am): 14 kWh/day (EV charging, overnight appliances)

On a flat rate of 32 c/kWh: 25 kWh × 32 c = $8.00/day, or roughly $2,920/year.

On a ToU tariff (same indicative NSW rates):

  • Peak: 3 kWh × 55 c = $1.65
  • Shoulder: 8 kWh × 30 c = $2.40
  • Off-peak: 14 kWh × 18 c = $2.52
  • Total: $6.57/day, or roughly $2,398/year

Result: the out-during-the-day household saves about $522 per year on ToU. That's a meaningful saving from no hardware investment — just tariff choice and timer discipline.

Solar households: where ToU gets interesting

Rooftop solar changes the calculation in a specific way. During the day, solar generation covers most of the household load and exports the surplus to the grid at the feed-in tariff rate (currently 4–7 c/kWh in most states). In the evening, the household draws from the grid — right in the middle of the peak window.

A solar-only household (no battery) importing during the 3–9 pm peak at 55 c/kWh is paying a premium rate for exactly the period they can't self-generate. In many cases, this means ToU is worse for solar households without storage than a flat rate — even if they're away during the day. The maths depend heavily on the specific evening import volume.

A solar household with a home battery, however, is often the biggest winner on ToU. The battery charges from midday solar, then discharges during the 3–9 pm peak, avoiding the peak rate entirely. This is effectively arbitrage between off-peak costs (or free solar) and peak-rate imports. To explore whether adding a battery makes sense for your situation, try the home battery payback calculator.

The decision framework

Rather than guessing, you can estimate your likely outcome in five steps:

  1. Get your load profile. Many smart meters allow you to download half-hourly usage data from your distributor's portal. If you cannot get this, estimate what share of your daily use falls between 3 pm and 9 pm on weekdays.
  2. Find the threshold. For most NSW and QLD households, if peak usage is above roughly 35% of your daily total, a flat rate is likely better. Below 25%, ToU is likely better. The 25–35% range requires careful comparison.
  3. Compare the actual offers. Use Energy Made Easy (for most states) or the Victorian Energy Compare tool for Victoria. Enter your bill's daily usage and it will rank offers including ToU plans.
  4. Check for a smart meter. You need an advanced meter (also called an interval or smart meter) to access ToU billing. Contact your retailer or distributor to confirm.
  5. Review after three months. Tariff switching is low-risk — most retailers allow a change within a billing period. Switch, monitor your bills for a quarter, and switch back if the numbers don't work.

What about controlled load tariffs?

Some older properties still have a controlled load (CL) circuit — typically used for off-peak electric hot-water systems. CL1 and CL2 rates in NSW and QLD are typically 14–18 c/kWh for overnight charging, making them one of the cheapest electricity rates in the country. If your home has a storage hot-water system on a controlled load circuit, this is effectively a structured off-peak arrangement that operates independently of your choice between flat and ToU tariffs for the rest of the home. It is worth keeping if you have it, and worth considering if you're planning a new hot-water system.

Key things to watch for

Several factors can flip the calculation unexpectedly. Supply (daily) charges are fixed regardless of tariff type, but some ToU plans carry a higher daily supply charge to offset the lower off-peak rate — check this carefully when comparing headline rates. Weekend rates vary: some retailers apply the off-peak rate all weekend, others only overnight. Tariff boundaries also differ by distributor; in some South Australian zones, peak starts at 1 pm rather than 3 pm.

For solar households modelling whether solar is still worth it in 2026, the tariff structure is one of the key inputs. Switching to an appropriate tariff — before or after installing solar — can add or subtract years from the payback calculation.

Sources

This article is general information only and is not financial, energy or product advice. Electricity rates vary by retailer, distribution zone and individual contract. Always compare your own bill details using the Energy Made Easy comparator or seek advice from a licensed energy broker.

Last reviewed: — figures verified against AER Default Market Offer 2025–26 determinations.