Electricity pricing plans and tariffs

Find out about electricity pricing plans and tariffs and how they work with solar.

Why tariffs matter for solar

How much you pay for electricity in your home or business depends on your electricity pricing plan, also called your electricity tariff.

After you install rooftop solar to generate your own electricity, you will need to buy less electricity from your electricity retailer. The electricity pricing plan is important as most solar properties stay connected to the grid and still need to buy some electricity. Electricity plans also offer different rates for electricity exported to the grid.

Types of electricity customers

The electricity pricing plans available to you depend on the type of electricity customer you are and your location.

  • Residential pricing plans are available to household electricity customers.
  • Small business pricing plans are available to business electricity customers with annual electricity usage below a certain threshold.

In NSW, Victoria, ACT, South Australia, Tasmania and South-east Queensland, residential and small business customers can choose from a range of competitive market offers from different electricity retailers.

In the Northern Territory, Western Australia and regional Queensland, electricity plans are regulated and customers have less (or no) choice of electricity retailer.

Your electricity bill

Your electricity bill is provided by your electricity retailer. The name of your electricity retailer will be shown at the top of the bill.

Your electricity bill is made up of different types of charges.

  • Fixed charges are paid for each day or each billing period and are sometimes called supply charges or service charges. These include charges for grid connection, metering, administration and billing costs, and environmental fees.
  • Variable charges depend on how much electricity you use and, in many cases, when you use it. They include usage charges and demand charges.

For solar customers, the bill may also include payments or credits for electricity exported to the grid.

There is more information to help you understand your bill on the SunSPOT website.

Types of electricity pricing plan or tariff

The types of variable charges on your bill, and the way they are calculated, depend on your pricing plan or tariff.

Flat rate or single rate tariff

With a flat or single rate tariff, you pay the same amount for the electricity you use from the grid, whatever time you use it. The rate is expressed in c/kWh. For example, if you used 20 kWh of electricity a day at 30 c/kWh, you would be charged $6.00.

Block tariff

A block tariff is similar to a flat rate tariff, but there are different rates depending on how much electricity you use each day or each billing period. For example, one rate for the first 10 kWh used each day and another rate for anything above that. These are more common for business customers.

Time of Use tariff

With a time of use tariff, the rate depends on the time of day, with a higher rate (c/kWh) for electricity use in the peak period and a lower rate in the off-peak period. Some time of use plans also have a shoulder period with a rate between the peak and off-peak rate.

There may be different rates and periods for weekend and weekdays. Seasonal time of use tariffs have different rates and periods at different times of the year. These reflect seasonal peak periods on the grid.

Controlled load tariff

A controlled load tariff applies only to specific appliances, connected to a separate meter circuit. The circuit is controlled so the appliance can only be used at certain times of day, usually off-peak periods. Most often, controlled load tariffs are for electric hot water systems (often called 'off-peak hot water'), but can also be used for pool pumps or underfloor heating.

Demand charge tariff

Some pricing plans include a demand charge added to a flat or time of use tariff. A demand charge is based on the highest amount of power drawn from the grid at any time (called the peak demand) – for example, when you are running many appliances at once.

This type of pricing reflects the additional cost of building and maintaining a larger grid that can supply customers that use a large amount of electricity at any time.

Demand tariffs take different forms. For example, you may be charged a daily rate based on your highest demand in the year or in the month, or for your highest demand during peak periods only.

Demand charges are included in some residential plans and are common in small business plans.

With a demand charge, your bill can be kept lower if you keep your usage fairly consistent, without big spikes.

Feed-in tariffs

There will be times when you don’t use all the electricity your solar system generates, such as when you’re away from your home or business premises, or you are not using many appliances. Unless you have a battery to store it, the excess electricity is exported to the grid.

Many residential and small business electricity plans (often with ‘solar’ in the name) include a feed-in tariff. If your electricity plan includes a feed-in tariff, you will receive a payment for this exported electricity, in the form of a credit on your bill.

Variable feed-in tariffs

Most feed-in tariffs have a single rate (c/kWh) for exported electricity but some retailers in some areas offer variable feed-in tariffs, such as:

  • Time of use feed-in tariffs have different rates at different times of day, typically lower rates in the middle of the day and higher in the evening. These can reward you if you have a battery and can export electricity during the evening.
  • Block feed-in tariffs vary with how much electricity you export. For example, a feed-in tariff of 10c/kWh for the first 5kWh exported each day, and 5c/kWh for any export above 5kWh.

Falling feed-in tariffs

If you were an early adopter of solar, you may continue to benefit from historically high feed-in tariffs. However, feed-in tariffs have fallen significantly since they were first offered in 2008.

These days, feed-in tariffs reflect the market value of electricity. If you are new to solar, your feed-in tariff will be much lower than the retail rate you pay to buy electricity. So it makes sense to use as much of the electricity generated by your solar system as you can, rather than exporting to the grid.

Some early adopters may have a gross metering arrangement where they are paid a feed-in tariff for all of their solar generation. For these properties, using electricity during times of solar generation won’t have the same financial benefit.

Choosing an electricity pricing plan

When you install solar, your electricity retailer may automatically change your pricing plan. Your new plan may not be the best one for you. To get the best value from your solar, compare the different electricity plans and feed-in tariffs available in your area. The best plan depends on all the different rates—fixed and variable charges, as well as feed-in tariffs.

Most residential and small business customers have a choice of tariff type and, except in Western Australia, Northern Territory and regional Queensland, a choice of electricity retailer. Depending on where your property is, there may be restrictions on the pricing plans available to solar customers. For example, some distribution network service providers do not allow solar customers to have a flat tariff.

Find out more about how different plans affect how solar pays for itself.

Once your solar is connected, you should use a comparison site or the SunSPOT tool to see how your electricity bill might be affected by different pricing plans. The best plan for you will depend on how much of your solar you use on-site and how much you export. The plan with the highest feed-in tariff is not necessarily the best.

Government comparison sites

If your home or business is in an area with a choice of retailers and pricing plans, you should regularly check a comparison site to see if there is a better plan on offer for you.

Electricity pricing plan information for each state or territory.
State or territory Electricity pricing plan information
ACT Energy Made Easy
NSW Energy Made Easy
Northern Territory
(no choice of electricity retailer)
Electricity retail pricing
South-east Queensland Energy Made Easy
Regional Queensland (no choice of electricity retailer) Queensland Competition Authority
South Australia Energy Made Easy
Tasmania Energy Made Easy
Victoria Victorian Energy Compare
Western Australia
(no choice of electricity retailer)
Household electricity pricing