Electricity tariffs explained

Learn more about common tariff types and how solar feed-in tariffs (FiT) work.

A long field of large electricity transmission towers on a cloudy day

Overview

An electricity tariff is the pricing structure which determines how much you pay for your electricity usage. 

Different types of customers - for example, residential, commercial and industrial - may be have different pricing structures. This could be based on the amount of energy used, the type of meter you have, or different rates applying for peak and off-peak times. As your distributor, we set these tariff structures.



Single rate tariffs

If you are on a single rate tariff, this means your usage is always charged at one flat rate. This tariff lets you easily predict your future usage charges, however will not allow you to reduce your bills by shifting your usage habits to off-peak grid times.


Time of use tariffs

If you are on a Time of Use tariff, you will be charged different usage rates depending on the time of day. 

Lower electricity usage rates are usually offered during off-peak periods, to encourage customers to use electricity at these specific times. By running your washing machine and dishwasher or charging your EV during off-peak times, you might save more on your bills. Your electricity bill will outline these time periods.


Demand tariffs

Demand tariff charges are based off the maximum amount of electricity you use during a specific period. These are usually an additional charge on your bill, separate to the ongoing rate/s you’re charged for your usage

For example, if a manufacturing business ran all their machines at the same time at full capacity for an hour, they will use more energy (measured in kilowatts (kW)) during that one hour, than if they spread out their usage across a number of hours. This hour of usage may be their ‘peak’ for that month. Let’s say that amount was 50kW. The 50kW will then be multiplied by a specific demand rate and added to their monthly electricity bill. 

These tariffs encourage customers to spread out their power usage to help reduce demand on the grid, while potentially lowering energy costs. 

Critical peak demand (CPD) tariffs

If your business uses more than 160 MWh of electricity per year, you are likely on a CPD tariff. This means you can participate in our CPD GoodGrid program to reduce your energy costs over summer peak periods. For more information, see GoodGrid.

To see the full schedule of tariff structures we provide, visit Network tariffs.


The right tariff for you

Speak to your electricity retailer about what option is best for you, and whether you are able to change your current tariff structure. 



A solar panel on a roof

Solar feed-in tariffs

A solar feed-in tariff (FiT) provides compensation to individuals or businesses for generating electricity from solar panels and feeding it back into the grid.

The Essential Services Commission sets a minimum FiT that your retailer must pay you if you are eligible to receive a FiT. Your retailer may also have voluntary FiT payments available on top of this minimum amount.

Further information regarding eligibility and feed-in tariff rates, visit the Victorian Government's energy website Solar feed-in tariff.


Feed-in tariffs and self-consumption

One of the benefits of owning a solar system is you have access to free renewable electricity, available to you as your solar panels generate it. 

Rather than exporting energy back into the grid, using solar when it is generated (when the sun is shining) can help to significantly lower energy costs and reduce pressure on the grid during peak usage periods. If you’re savvy, adjusting your energy usage during solar generation can make a difference.


Victorian premium solar feed-in tariffs

The solar premium scheme began in late 2009 as an incentive to install solar systems. It offered eligible households, businesses and community organisations with small-scale solar systems of five kilowatts or less a credit of at least 60 cents per kilowatt hour for excess electricity fed back into the grid.

More than 88,000 Victorian households, small businesses and community groups benefit from the PFIT, including 23,000 AusNet customers currently receiving the credit.

The fixed term scheme closed to new applicants in 2011 and will be ending altogether on 1 November 2024.

Download our Factsheet (PDF, 726 KB) for more information including tariff reassignments.


FAQs