You might not have put much thought into what makes up the price you pay for electricity, especially if you have recently come to Amber from a more traditional retailer. In Amber’s model, we pass through all of the components that go to the price you pay which fall broadly into the following categories: The wholesale price, market fees, environmental fees, Amber fees and Network fees. You can read an overview of these here, but today we are going to take a deep dive into the last one: Network fees - or as they are often referred to: Network Tariffs.
What is a Tariff?
Simply put, it’s the amount you pay the networks for access to electricity. There are 4 types of tariff that a residential customer will see:
An anytime or fixed use tariff has a flat rate, regardless of when you power. These are the simplest tariffs to calculate - you take the amount of power measured in kilowatt-hours (kWh) and multiply it by the rate. We have a list of anytime tariffs for each network here.
These are the most basic type of network tariff and historically was the default that most customers were on.
Time of Use tariff
Time of use tariffs vary depending on when you use power. They are designed to encourage you to shift your usage to times that are less stressful on the network.
They are generally broken up into either two bands (Peak and Off-peak), or 3 bands (Peak, Shoulder and Off-peak).
Peak times are the times where the most power is used - usually in the afternoons, though it is different from network to network. Because of the highest demand of these times, they are the most expensive.
Shoulder periods are a happy middle ground between price and convenience - they generally occur immediately before or after peak periods, while being a bit cheaper.
Off-peak times are the cheapest because fewer people use power during those times. You can make the greatest savings by shifting your usage to these times.
Some time of use tariffs change at different times of the year - typically prices in summer are higher than other times of the year. You can see visualisations of the time of use tariffs we service here.
How do I save money on a time of use tariff?
The easiest way to save if you are on a time of use is to move your usage to off-peak times. By design, these are less convenient times, so try shift usage that isn’t time-dependent - running dishwashers, washing machines and dryers are great candidates (and most of them have delayed start functions!).
If you are in South Australia, you may have heard of a Solar Sponge tariff. This is basically a special off-peak rate in the middle of the day that best utilises that sweet, sweet energy from the sun. It is by far the cheapest time to use power in South Australia.
A block tariff is an older style tariff that is slowly phased out in favour of time of use tariffs. Before smart meters, measuring when you used power was impossible, so to incentivise users to use less power, the block tariff was created.
Block tariffs start off at one price and increase once you have consumed a certain amount of power. They reset after a predetermined time period either when you get billed, or every quarter.
Block tariffs are becoming rarer and rarer, and while your bill will account for both blocks, the app won’t - you’ll only ever see the cheaper block price.
How do I save money on a block tariff?
The only way you can save money on a block tariff is to use less power than your threshold. Once you go over that threshold you will be charged the higher price until the block period resets. Moving to an anytime or time of use tariff gives you more flexibility - if you are interested in applying for a tariff change, contact our support team and they can help you out.
There is one other type of tariff that is worth mentioning, though it isn’t really a standalone tariff - it is applied on top of an anytime, time of use or block tariff - it’s called a demand tariff.
Demand tariffs are the most complicated to understand as it’s not actually based on your usage - instead, it’s based on your highest 30 minute period during a period (usually a month). Usually, the demand periods apply only during a window each day (e.g. between 3-8 pm) and your highest 30 minutes of usage during this window will set the cost for the whole month.
How do I save money on a demand tariff?
The obvious way to save is to avoid your demand window, but if that isn’t possible try to avoid using more than one high power device at once. By only running one thing at a time, your maximum usage will be lower. Find out how much power your devices at home draw here.