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What type of electricity rates are there?

As a general rule there are two primary electricity rate structures you are likely to be offered; a flat rate for each kW/h used (which is the same price 24 hours a day 7 days per week) or a time of use (TOU) rate that varies the cost per one kW/h at different times of the day. Time of use usually has off peak, shoulder and high peak rate. Off peak is typically at night, shoulder during the day till the early afternoon and peak from middle afternoon into the evening. Peak charges can be as high as 50c per kW/h in some areas.

From a solar economics perspective, the results are generally very similar irrespective of whether you are on a flat or time of use rate. However, depending on the time of day when you typically use your electricity you may be able to gain a slight advantage by being on one or the other types of tariff.

For example, if you come home at 3pm and use the electricity a lot at that point with air conditioning and TV, then a flat rate might be better, but then again if your solar system is on a West roof then, depending on the size of the system will offset your own use, and it is better to be on a time of day tariff. Another example is, if you use a lot of electricity at night and the weekend and not much between 2pm and 8pm, then a time of use rate from the electricity retailer would be better for you.

Like feed-in tariff analysis, your solar system supplier should be able after discussing your electricity consumption, provide you with an analysis of what tariffs will provide the best outcome. Make sure you have chosen your preferred electricity rate option, before you had your solar meter installed, as some meters only offer one option. Finally some electricity retailers will only offer you one tariff option.