Time-of-use, flat or demand tariff? The right one depends on your load shape — not the sales pitch.
Three tariff structures, three completely different ways to charge you for the same electricity. Flat rewards nothing and punishes nothing. Time-of-use rewards shifting load. A demand tariff can bite one household hard and barely touch its neighbour. Here's how each works in 2026 — and how to read your own usage before you switch, so the tariff doesn't bite you.
Reviewed by the Mission Green Energy Team · Updated July 2026
Which tariff
won't bite you?
It depends on your load shape — when you use power and how sharply — not on which tariff a retailer or salesperson is pushing. There is no universally cheapest structure; there's only the one that fits your home.
Here's the honest frame. All three tariffs charge you for the same kilowatt-hours — they just slice the bill differently. A flat (single rate) tariff charges one price whatever the time of day. A time-of-use tariff makes electricity dear at peak times and cheap off-peak, so it rewards you for shifting load and punishes you for not being able to. A demand tariff adds a separate charge based on your single most intense half-hour of the month, on top of your usage — so it can punish one bad spike even in a thrifty home.
Which one is cheapest for you is entirely a question of when your electricity gets used and how spiky that usage is. A household that's out every weekday evening and runs the dishwasher overnight can save real money on time-of-use. A frugal but spiky home — everything switched on at once when the family gets in — can get stung by a demand charge despite low overall use. And a home with an unpredictable pattern, or one that's empty 9-to-5 and busy in the evening peak, is often safest on a plain flat rate. Below we walk through each structure, show how a demand charge is actually calculated, and — most importantly — how to read your own interval data before you switch.
Flat (single rate):
one price, all day.
The simplest structure. You pay the same rate per kilowatt-hour whatever time you use power. It rewards nothing and punishes nothing — which is exactly why it's often the safest default.
On a flat, or "single rate", tariff you pay the same rate whatever time of the day you use energy (per the AER's Energy Made Easy). There are no windows to time your washing around, no demand peak to accidentally set — a kilowatt-hour at 6pm on a Tuesday costs the same as one at 3am on a Sunday.
The government's guidance is that a single rate plan tends to suit households that are home a lot in the evenings from Monday to Friday, or who run big appliances like the washing machine or dishwasher on weekdays — exactly the pattern that a time-of-use plan would charge at peak rates. It's also the tariff that doesn't need a smart meter, and the one that's hardest to get bitten by if your usage is unpredictable.
- Best for: homes busy in the weekday evening peak, unpredictable usage, or anyone who can't reliably shift load.
- The trade-off: it's rarely the cheapest possible plan for someone who can genuinely move usage to off-peak — flat charges you the same whether your timing is good or bad.
- The honest read: predictable, not optimised. If you value not getting surprised over squeezing out the last dollar, flat is the low-stress choice.
Time-of-use:
cheap if you can shift, dear if you can't.
The price changes by time of day — a dear peak, a cheap off-peak, and sometimes a middle shoulder rate. It only helps if you can actually move usage out of the peak, or have solar or a battery covering it.
On a time-of-use tariff the price of electricity changes at different times of the day (again per Energy Made Easy). There are usually three bands:
- Peak — the most expensive, usually applying weekday evenings when grid demand is highest.
- Off-peak — the cheapest, usually overnight and on weekends.
- Shoulder — a middle rate between peak and off-peak, used on some plans.
Critically, the exact windows vary by retailer, plan and network area — there is no single national timetable. As one worked illustration, EnergyAustralia has published a summer peak of 2pm to 8pm on weekdays, with off-peak 10pm to 7am daily and shoulder covering the rest (per EnergyAustralia's tariff page) — but your plan's times can be completely different, so you must check your own retailer's fact sheet. You typically need a smart meter to be on a time-of-use plan.
Time-of-use rewards households that are out on weekday evenings, or that can run the dishwasher and washing machine off-peak or on the weekend. It works against you if your home is empty and dark all day and then everyone arrives home and switches everything on during the weekday-evening peak — in that case a time-of-use plan can cost more than a plain flat rate. Solar changes the picture: it can flatten your daytime draw but push your paid grid use into the evening peak, which is where a battery that discharges through the peak earns its keep.
Demand tariffs:
where one spike can bite.
The one to understand carefully. A demand tariff adds a charge based not on how much you use overall, but on how intensely you use it at your single busiest half-hour — and that one spike sets the charge for the whole month.
A demand tariff is based on the load you place on the network — a measure of how intensely you use electricity at a point in time, not how much you use over the month (per Energy Made Easy). It sits on top of your usage rate as a separate line on the bill, and the highest measure for the billing month is used to calculate the demand charge for the entire month.
Here's exactly how it's worked out, using ActewAGL's published method as a concrete example: your demand is your maximum draw over a single 30-minute interval during the demand window, converted to kilowatts, then multiplied by a per-kW rate and the number of days in the month. Because it's a half-hour of energy expressed as an hourly rate, the 30-minute figure is doubled — draw 4 kWh in one half-hour and that registers as 8 kW of demand (per ActewAGL's demand pricing page, which shows an 8 kW peak at $0.16816/kW over 30 days working out to about $40 for the month). The maximum demand resets each calendar month.
The windows and seasons differ by network. As a second example, Ausgrid's residential demand window is 3pm to 9pm across the June–August and November–March periods. Your retailer sets the actual charge you pay, which may differ from the network's — so always confirm both the window and the rate on your own plan's fact sheet, because these figures change.
Who each tariff
actually suits.
The same home can be best-off on any of the three, depending on its load shape. Here's the honest short version — then check it against your real usage, not the archetype.
Predictable, hard to sting
Best for homes busy in the weekday evening peak, or with unpredictable usage you can't confidently time. No windows, no demand peak. Rarely the theoretical cheapest, but the hardest to get bitten by — and it's the one tariff that doesn't need a smart meter.
Rewards genuine shifting
Best if you're out on weekday evenings, run big appliances off-peak or on weekends, or have a battery covering the peak. Punishes the empty-all-day, everything-on-at-6pm pattern. Check the exact peak window on your plan — they vary widely.
Suits steady, punishes spiky
Fine for homes that spread their load across the day. Risky for homes that cluster it — one spike of oven + aircon + kettle inside the window can set a month's charge even on low total usage. Only accept it after you've checked your interval data for spikes.
Read your own interval data
before you switch anything.
Every archetype above is a guess about your home. Your interval data is the fact. If you have a smart meter, you can get it — and it settles the tariff question in about ten minutes.
If you have a smart meter, your retailer can give you your interval data — usually your usage in 30-minute blocks — through your online account, a formal data request, or a comparison tool. (You typically need a smart meter for time-of-use and demand plans; a flat single-rate plan doesn't require one.) Once you have it, look at three things:
- How much of your use falls in the peak window. Line your usage up against the specific peak times on the plan you're considering. A lot of use inside peak means time-of-use will likely cost you more, not less. A little means it could genuinely save.
- Whether you have sharp, brief spikes. Scan for half-hours where several big appliances clearly ran at once. If you see them, a demand tariff will bite — that spike is what sets the charge. If your usage is smooth, a demand tariff is far less risky.
- Whether your daytime use lines up with solar. If most of your grid draw is in the evening, solar alone won't cover a time-of-use peak — that's the case for a battery, and it also shapes how two-way export pricing and any free-power window interact with your tariff.
The government comparison site Energy Made Easy can compare offers using your actual usage, which is a far more honest test than any generic "you'll save" figure. We won't quote you a dollar outcome, because the honest one depends entirely on the shape of your own data — and that's exactly the point of reading it first.
So which one
should you actually pick?
Here's the call we'd give a friend: let your interval data choose, and when in doubt, prefer the tariff you can't get stung by.
Pick time-of-use if — and only if — your data shows you can genuinely keep usage out of the peak window, whether because you're out on weekday evenings, you run big loads off-peak, or a battery covers the peak. Only accept a demand tariff after you've scanned your interval data for spikes and confirmed your load is smooth, or that you can flatten it (a battery that shaves your single highest half-hour is the classic fix). Default to flat when your usage is unpredictable, your home is busy in the evening peak, or you simply value not being surprised over squeezing out the last few dollars. And be sceptical of any pitch that names a tariff as "the cheapest" without ever looking at your usage — the cheapest tariff is a property of your home, not of the plan. The battery-and-solar question sits underneath all of this: if you're weighing that too, start with whether a battery is worth it for your home.
Tariffs, honestly.
Your questions, answered.
A flat (single rate) tariff charges you the same price per kilowatt-hour whatever time of day you use electricity. A time-of-use tariff changes the price by time — a dear peak (usually weekday evenings), a cheaper off-peak (overnight and weekends) and sometimes a middle shoulder rate. A demand tariff adds a separate charge based on how intensely you draw power at your single busiest point in the billing period — typically your highest 30-minute interval during a defined demand window — on top of your usage rate. Flat rewards nothing and punishes nothing; time-of-use rewards shifting load to cheap times; demand punishes short, sharp spikes even in an otherwise low-usage home. Which one is cheapest for you depends on the shape of your usage, not on any sales pitch.
A demand charge is based on the highest amount of power you draw in a single 30-minute interval during the demand window, converted to kilowatts and then multiplied by a per-kW rate and the number of days in the month. Because it is a half-hour of energy expressed as an hourly rate, the 30-minute figure is doubled: for example, drawing 4 kWh in one half-hour equals 8 kW of demand. That single worst half-hour sets the charge for the whole month, and it typically resets each calendar month. Windows and seasons vary by network — Ausgrid's residential demand window, for instance, is 3pm to 9pm during June to August and November to March — so always check your own network's and retailer's fact sheet, as figures and times change.
Only if you can actually move electricity use out of the expensive peak window. Time-of-use rewards households that are out on weekday evenings, that run big appliances like the dishwasher and washing machine off-peak or on weekends, or that have solar or a battery soaking up the peak. If your home is empty and dark during the day and everyone arrives home and switches everything on during the weekday evening peak, a time-of-use plan can cost more than a plain flat rate. The peak, off-peak and shoulder windows vary by retailer, plan and network, so the only honest way to know is to compare your own usage against the specific windows on the plan you are considering.
Yes — that is the trap. A demand charge does not care how little energy you use overall; it cares about your single most intense half-hour. A frugal household that happens to run the oven, the air conditioner and the kettle together one evening can set a high demand peak that then charges across the whole month, even though total consumption is modest. That is why demand tariffs suit homes that spread their load out and can punish homes that cluster it, regardless of how thrifty they are the rest of the time. Before accepting a demand tariff, look at your interval data to see whether you have sharp, brief spikes — if you do, a demand tariff may bite.
If you have a smart meter, your electricity retailer can give you interval data — usually your usage in 30-minute blocks — through your online account, a data request, or a bill comparison tool. Look at three things: how much of your use falls inside the plan's peak window versus off-peak (this tells you whether time-of-use helps or hurts), whether you have short, sharp spikes where several big appliances run at once (this tells you whether a demand tariff will bite), and whether your daytime use lines up with solar generation. Government comparison site Energy Made Easy can help you compare offers using your usage. You typically need a smart meter for time-of-use and demand plans, but not for a single rate plan.
For a household with an unpredictable pattern, or a home that is empty during the day and busy in the weekday evening peak, a flat single rate tariff is often the safest default. It charges the same rate whenever you use power, so it neither rewards good timing nor punishes a bad spike — there are no windows to get caught by and no demand peak to accidentally set. It is rarely the cheapest possible option for someone who can genuinely shift load, but it is the most predictable and the hardest to get bitten by. If you cannot confidently say when your usage happens, predictable often beats theoretically-cheaper.
They can change it a lot. Solar shifts your grid draw into the evening, which can make a time-of-use peak more painful unless a battery covers it — but a battery that discharges through the evening peak, or that shaves your single highest half-hour, can turn time-of-use or even a demand tariff into a good fit. In short, the more control you have over when you draw from the grid, the more a time-varying tariff can reward you; the less control you have, the more a flat rate protects you. Because export rules and tariffs interact, it is worth reading how two-way export pricing and free-power windows work alongside your tariff choice, and modelling your own numbers rather than trusting a generic pitch.
Where these figures come from.
Tariff definitions, demand-charge mechanics and window times on this page are drawn from official and network primary sources and were current as at 2026. Windows, rates and rules vary by network and retailer and change over time — confirm at the source and on your own plan's fact sheet before relying on a figure.
- AER Energy Made Easy — single rate, time-of-use, controlled load & demand tariff definitions, and which suits which household
- energy.gov.au — electricity pricing plans and tariffs (flat, time-of-use, demand)
- Ausgrid — residential demand pricing: 30-minute measure, 3pm–9pm window, monthly reset
- ActewAGL — how demand pricing is calculated (30-min interval doubled to kW, worked example, calendar-month reset)
- EnergyAustralia — worked example of peak / shoulder / off-peak time-of-use windows
- AER — final Default Market Offer 2026-27: comparison prices for time-of-use tariffs from 1 July 2026
- AER Energy Made Easy — official comparison tool to test offers against your own usage