5 Things You Need To Know About Your Power Bill
In a typical week as a solar system designer – I look at a lot of power bills.
Not only are a lot of them much higher than they need to be, but also I’ve come to realise that many people simply don’t understand their power bill – and power companies know this.
In this article I’ll shed some light over the top 5 things you need to know about on your power bill.
1) Think power is cheaper at night time? Think again.
It’s a common myth in Adelaide that the amount you pay for electricity depends on the time of day you use it. For the majority of household electricity usage in South Australia, this is not the case. Using your washing machine at 10pm will cost you exactly the same as using it at 10am.
Specific off-peak items (which is generally only electric hot water, but in rare cases can be underfloor heating) can be set up on their own off-peak tarrif, but this is recorded separately and on a different meter altogether. Off-peak electricity is generally around half the price (or less) of standard electricity.
All standard power that your home uses runs through a single meter, and the time of day that power is used has no bearing on the cost of the electricity.
Once you have solar installed there is huge benefit to using your power during the daytime, as that is when you are generating free power.
2) Power is more expensive in Summer than in Winter.
Summer in Australia brings with it a huge spike in electricity demand, as everybody switches on their air conditioners to try and keep cool (Also – do you have an old fridge out in the shed? In Summer – that thing is probably chewing power like nobody’s business) This higher overall usage leads to higher prices as electricity suppliers try to keep up with demand.
Electricity rates in the Summer months can jump by as much as 25% – and of course if you have solar installed on your home it’s not something you need to worry about too much. A solar system and an air-conditioner are a match made in heaven.
3) Want to compare usage? You need to look for ‘kWh’ – not ‘$’
If you want to compare your power consumption accurately, you need to compare the actual power usage (measured in ‘kWh’) rather than the dollar amount. As power costs have increased greatly in the last 5 years, this can distort how much power you’ve actually used. Many people think their power consumption has been increasing over the last few years, whereas the graph on the front of your bill will give you the last 12+ months of usage history in a very simple format. It’s a great way to see how much power you’re really using.
4) Make sure you pay attention to your ‘supply charge’.
As power has increased in price dramatically in the last 5 years, another part of your bill that has increased is the quarterly ‘supply charge’ – which is the cost you pay for having power connected to your house. Not too long ago the supply charge was so low that nobody really noticed (around $20-$30 per quarter) but today most power companies are charging between $60 and $75 per quarter, regardless of any power used.
This is definitely one thing to be aware of when comparing retailers, but especially when new power companies offer you ‘big discounts on your energy costs’ – the power itself may be discounted – but their supply charge may be high enough to cancel out any of the benefit.
5) The more electricity you use – the more expensive it gets.
Unfortunately, electricity does not follow the same formula of almost everything else we buy – there are no discounts for buying electricity in bulk. In fact, the more you buy – the more expensive it gets! At the end of each billing period your electricity provider records your total power usage, and your consumption is then broken up into pricing brackets, which get more and more expensive as they go along.
Most retailers have 3-4 pricing brackets that they use – and the first 2 brackets are generally much cheaper than the last 2 brackets.
Here’s a rough example of what your billing might look like:
During your billing period, your home used 1,500 units (kWh) of standard electricity.
(Bracket 1) Your first 300 units are charged at 31 cents each
(Bracket 2) Your next 700 units are charged at the higher rate of 33 cents.
(Bracket 3) The remaining 500 units are charged at the premium rate of 38 cents each.
As the cost per unit jumps quite a lot from bracket 2 to 3 – this means that high-consumption households (especially those paying $800 per quarter or more) are often paying a premium rate for quite a lot of their power, especially during summer when air-conditioning and fridges are running regularly.
In this case especially, a solar PV system is extremely useful – because not only does it mean that during the day you can run many (or all) of your appliances for free – it also means that when you do buy power from the grid, it stays at a much cheaper rate, and for longer. Once solar is connected, many homes that regularly get into the 3rd and 4th price brackets (the most expensive ones) no longer move past the first 2 price brackets (the cheaper ones)
If some of this seems a bit confusing – that’s likely because it is. Power retailers claim to make everything straight forward and simple, but the reality is they generally don’t want you to understand too much about your power bill – other than how to make the payment. The more educated and aware you are about your power usage and billing, the better off you are.
One excellent, impartial site for comparing energy retailers in South Australia is energymadeeasy.gov.au – a government run website that allows you to compare retailers directly against each other. We find this site extremely useful.
For more information, contact us on 1300 365 378 or at firstname.lastname@example.org
Founder & Owner
Greenlife Solar Energy