If you’re a Queensland electricity customer, you may have heard about a new charge finding its way onto your power bill. While it’s not applicable to everyone yet, the new Demand Tariff or Demand Charge is something we can expect more of in the future. Commercial customers have been familiar with this for quite some time, but it’s now creeping into residential electricity contracts too.
So, here’s everything you need to know about demand tariffs.
What is a demand tariff?
A demand tariff is a new way of calculating your daily charge. For those who haven’t analysed their electricity bill, everyone is subject to a flat daily charge, and then you pay for your actual electricity usage on top of that. When using a demand tariff, the daily rate is calculated on your highest rate of energy usage during a monitoring period. So, if you happen to use a lot of power at the time your demand charge is set, you could end up paying much more than you really should.
Even worse, sometimes the calculation comes from a set half-hour interval and remains for the entire month. If you’re unlucky enough to be running several appliances during that interval, your daily charge for the whole month will be considerably higher.
Can you avoid the demand tariff?
If you have a smart meter, it can be difficult to avoid these charges. The reason being, it’s a charge set by the network distributor rather than your electricity retailer. So, even if you shopped around for a new electricity retailer, you’d still be subject to the charge.
Ways to reduce your risk include:
- Avoid using several appliances all at once
- Change your highest energy use periods away from the time that demand tariffs are calculated
- Compare load ratings of new appliances
- Consider alternative energy solutions like solar
How off-grid solar can help
The easiest way to avoid these excess charges is to switch to solar energy with battery storage. This means you can power your home with solar during the day, and excess solar energy is stored in a battery for use during the evening. With a big enough system, you can remove yourself from the national grid completely and never pay an electricity bill again.
If, however, your system doesn’t produce enough energy, you’ll still need the electricity provider in the evening. But, if you’ve got battery storage, the amount you use during demand tariff calculable times will be significantly decreased. That means lower demand charges, or even better, no reliance on an electricity provider at all!