With the recent rise in energy prices sending many homeowners looking for a better deal, experts have some key advice for bargain hunters. There are many different electricity tariffs available to consumers, but not all of them may be in your best interest. One particular type of deal that’s come under scrutiny is the ‘demand tariff’.
What are demand tariffs?
A demand tariff charges a customer according to how much demand they are putting on the energy network. While this might sound fair and reasonable, the demand tariff is actually applied to an energy bill on top of your usage charges.
These tariffs are quite complex and are usually aimed at customers who use a considerable amount of energy, such as businesses. It is rare for demand charges to be seen in residential energy plans. However, there have been recent reports of residential homeowners being moved to demand tariffs without their knowledge.
Do demand tariffs benefit homeowners?
Due to the complexity of these plans, it is unlikely that homeowners will benefit from demand pricing. This is partly due to how complicated they are. Under a demand tariff, electricity use is measured every 30 minutes for certain periods of the day. This is then multiplied by a cents-per-kilowatt rate and multiplied again by the number of days in the month.
Time of use charges (peak and non-peak electricity usage) also feature in these bills, and while the rate is lower, most residential customers would be unable to tell whether they are benefiting from the plan or not.
Basically, to benefit from such charges, a person would need to know when the 30-minute monitoring periods occur, and be home so they can turn off all energy-hungry appliances during this time. It’s a practice that is likely out of reach for most Australians.
Do your research
The best thing you can do is check your energy bill carefully to ensure you haven’t been placed on a demand tariff without your knowledge. While these tariffs aren’t recommended for the most part, there may be some homeowners who do benefit from plans like this. So, it always pays to do your research, analyse your bills and determine which plan is more likely to benefit you.
If you’d like to stop worrying about rising electricity bills, now is the time to switch to solar. Contact Accord Electrical today, and we can discuss your solar needs and determine just how much you could save.
