What are time of use tariffs and how do they work for residential solar users?
Time of use tariffs are a type of electricity pricing structure that charges different rates depending on the time of day. These tariffs are designed to encourage energy use during off-peak times when demand is lower. For residential solar users, time of use tariffs can be particularly beneficial as they allow homeowners to maximise savings by using or storing solar-generated electricity when rates are higher.
By aligning energy consumption with these variable rates, residential solar users can significantly reduce their electricity bills. During peak periods, when grid electricity is more expensive, homeowners can rely on their solar systems, and during off-peak times, they can take advantage of lower rates for any additional energy needs.
Time of use tariffs work by dividing the day into different periods, typically peak, shoulder, and off-peak, each with its own pricing. Peak times usually occur in the evening when household energy demand is highest. Shoulder periods are transitional times, and off-peak times are when demand is lowest, often overnight. Solar users can benefit by using their stored solar energy during peak times, thereby avoiding higher costs.
For residential solar users with battery storage, time of use tariffs offer even greater flexibility. During the day, solar panels can generate and store energy, which can then be used during peak periods. This not only reduces reliance on the grid but also allows users to take full advantage of the lower off-peak rates for any additional energy consumption.
Understanding the structure of time of use tariffs is essential for maximising potential savings. By strategically planning energy usage and leveraging solar power, residential users can effectively lower their electricity costs while contributing to a more balanced energy grid.
