The short answer
What peak and off-peak electricity actually means
Peak and off-peak electricity, properly called a time-of-use or TOU tariff, charges you a different rate depending on the time of day. Power costs the most in the evening peak (typically the early evening on weekdays), less in the shoulder periods, and least overnight in the off-peak window. Here is the part most explainers skip: time-of-use is not automatically cheaper than a flat single rate. It is a bet on your own behaviour. It only saves you money if you can actually move a decent chunk of your usage out of the expensive evening peak. If you cannot, the very same tariff can leave you worse off than the flat rate you started on.
Here is the core takeaway in one line: a time-of-use tariff only saves you money if you can shift a large share of your usage out of the expensive evening peak, so the right question is not "is off-peak cheaper?" but "can I actually move my load?". The common assumption is that because the off-peak rate is lower than a flat rate, switching must save money. It does not work that way. If your home runs hardest in the evening (cooking, heating or cooling, hot showers, screens), you are paying the high peak rate exactly when you use the most, and the tariff can cost you more than the flat rate you left behind.
Reframe the assumption: time-of-use is not a discount. It is a deal that pays you to change when you use power. Take the deal without changing your behaviour and you are simply on a plan with a punishingly high evening rate.
The blind spot
Why most time-of-use explainers leave you worse off
Most articles about peak and off-peak rates make the same three mistakes, and each one quietly steers readers towards a more expensive bill.
First, they sell the off-peak rate and hide the peak rate. They show you the cheap overnight number and imply the whole plan is cheaper, without mentioning that the peak rate is often well above the flat rate you would otherwise pay. The cheap window only helps if you actually use power in it.
Second, they ignore your usage pattern entirely. Whether time-of-use saves you money depends almost completely on the shape of your day, not on the rates alone. A retired couple home all evening and a family that pre-runs the dishwasher at lunchtime can be on the identical plan and get opposite outcomes.
Third, they treat the meter change as harmless. They do not warn you that getting a smart meter often moves you onto time-of-use by default, sometimes without you noticing, so a household that cannot shift load can be quietly switched onto a tariff that costs them more.
How the tariff actually works
Expert analysis: the machinery behind peak and off-peak
How the windows and rates are structured
A time-of-use tariff splits the weekday into three price bands. Peak is the dearest, usually the early evening (often around 3 or 4 pm to 9 pm) when everyone is home and rooftop solar has stopped producing. Off-peak is the cheapest, usually overnight. Shoulder covers the hours in between. The exact times, and how weekends and public holidays are treated, are set by your local network distributor and then passed through by your retailer, so they differ by state and even by suburb. One thing does not change between a flat plan and a TOU plan: the daily supply charge (roughly 90 c to $1.20 a day) is a fixed cost you pay regardless of when you use power.
Flat single rate versus time-of-use, and the break-even share
A flat single rate charges the same price every hour. Time-of-use trades that simplicity for a gamble: a low off-peak rate in exchange for a high peak rate. There is a tipping point, the break-even share of peak usage, at which the two cost the same. Keep less than that share of your usage in the peak and TOU wins; go over it and the flat rate wins. Because the peak rate is so much higher than the flat rate, the break-even share is often surprisingly low, which is why households that "use a bit in the evening" can still end up behind. The calculator below works out the exact figure for your own numbers.
How a smart meter can trigger the change
A smart meter records your usage every half hour, which is the technical condition for time-of-use billing. Because of that, having a smart meter installed (whether you requested it or it came with a fault replacement or a rollout) frequently triggers a move from a flat rate onto a TOU tariff, sometimes with little fanfare. You generally have the right to ask to stay on, or return to, a single flat rate, but the onus is on you to check and act. If you cannot shift your load, that default switch is exactly the situation that can leave you worse off.
The solar-era shift: midday cheap, evening expensive
The old logic was that daytime power is expensive and night is cheap. Rooftop solar has flipped that. Around midday, millions of panels pour cheap power into the grid and push wholesale prices very low, sometimes below zero. The genuinely cheap window is now the solar-soaked middle of the day, while the scarce, expensive hours are the evening peak after the sun sets but while demand is still high. Newer time-of-use and "solar soak" tariffs are starting to reflect this, with very cheap or even free daytime windows, which rewards anyone who can run heavy appliances at lunchtime.
Interactive explainer
Will time-of-use beat your flat rate?
Set your yearly usage and the share of it that lands in the evening peak. The tool compares a flat rate against a peak, shoulder and off-peak split, and tells you which wins and the break-even point.
Yearly usage: kWh
Share of usage in the evening peak: %
Flat rate
$/year
Time-of-use
$/year
Time-of-use wins by $ a year at this usage pattern. The flat rate wins by $ a year at this usage pattern.
Illustrative rates only: flat 33 c/kWh; TOU peak 50 c/kWh, shoulder 30 c/kWh, off-peak 22 c/kWh. The non-peak usage is split evenly between shoulder and off-peak. Daily supply charges are assumed equal on both plans and excluded. Your real rates and windows depend on your distributor, plan and state.
The same numbers, in plain text
Illustrative time-of-use rates and a worked example
The same illustrative rates the calculator uses. Your real rates and windows depend on your distributor, plan and state.
| Rate band | Rate | Typical window and notes |
|---|---|---|
| Peak (evening) | 50 c/kWh | Roughly 3 or 4 pm to 9 pm on weekdays, when demand is highest and the sun is down. |
| Shoulder | 30 c/kWh | The hours either side of peak, often late morning to mid-afternoon and mid-to-late evening. |
| Off-peak (overnight) | 22 c/kWh | Typically overnight and into the early morning, when demand is low. |
| Flat single rate (for comparison) | 33 c/kWh | One rate that applies at every hour. The benchmark TOU has to beat. |
Worked example. Take a home using 4,000 kWh a year. On the flat rate at 33 c/kWh that is about $1,320 a year in usage. On the time-of-use plan, suppose 40% lands in the peak (1,600 kWh at 50 c = $800), and the remaining 60% splits evenly into shoulder (1,200 kWh at 30 c = $360) and off-peak (1,200 kWh at 22 c = $264). That totals about $1,424 a year, so at a 40% peak share the flat rate is roughly $104 a year cheaper. Drop the peak share far enough and time-of-use moves ahead: with these illustrative rates the break-even is around 29% of usage in the peak. Use the calculator above to find the figure for your own usage.
What this means for real households
How misreading time-of-use costs you money
The break-even maths is not academic. It is exactly how households end up on the wrong side of a peak and off-peak plan:
They switch for the off-peak rate and never change their habits
A household sees the low overnight rate, switches across, then keeps cooking, heating and watching television in the evening exactly as before. They now pay the high peak rate during their busiest hours and wonder why the bill went up rather than down.
They get auto-switched by a smart meter and do not notice
A meter is replaced and the plan quietly moves to time-of-use. An evening-heavy household that cannot shift load is suddenly exposed to the peak rate, and because nothing about their routine changed, it can take a few bills before they realise the tariff did.
They cannot actually move their biggest loads
Shift workers, families with young children, and people who are home and using heating or cooling all evening often have very little load they can move into off-peak. For them the flat rate is usually the safer choice, and time-of-use is a structural mismatch rather than a missed opportunity.
They ignore the solar-soaked middle of the day
Households that could run the dishwasher, washing machine, pool pump or electric-vehicle charger at lunchtime instead leave them for the evening out of habit. They miss the cheapest window the grid now offers and the one that makes time-of-use pay off.
The insider insight
Solar has turned the middle of the day into the bargain
Here is the shift the standard advice has not caught up with. Australia has more rooftop solar per person than anywhere on earth, and around midday those millions of panels pour cheap power into the grid when household demand is low. That regularly pushes wholesale prices very low, sometimes below zero, in the middle of the day. The old story that daytime power is dear is now backwards for the solar-soaked hours.
The non-obvious truth: the scarce, expensive hours have moved to the evening peak, after the sun sets but while demand is still high. That is the very window most time-of-use tariffs charge the most for. So the winning move on a TOU plan is not just "use less", it is "use it at the right time": run hot water, the pool pump, the dishwasher, the washing machine and electric-vehicle charging in the cheap middle of the day or overnight, and keep the evening peak as light as you can.
That is why retailers are launching solar-soak windows, free-power hours and electric-vehicle charging deals aimed at the daytime glut. Time-of-use is the tool that lets you act on the shift, but only if your habits, and your meter, let you see and use the cheap window.
Grounded in the analysis
What you should actually do
Moves that follow from how time-of-use really works, and when it really saves.
Be honest about your usage pattern
Before switching, ask whether you can genuinely move heavy use out of the evening peak. If most of your power use is in the evening and you cannot change that, a flat single rate is usually the safer and cheaper choice.
Check whether a smart meter switched you
If you have had a smart meter installed, read your plan and your last few bills. If you were moved onto time-of-use and cannot shift load, ask your retailer to put you back on a flat rate.
Shift heavy loads to midday or overnight
If you do go time-of-use, run hot water, the dishwasher, the washing machine, the pool pump and any electric-vehicle charging in the solar-soaked middle of the day or the overnight off-peak, and keep the evening peak light.
In a NEM state (QLD, NSW, ACT, VIC, TAS or SA)? Compare flat-rate and time-of-use plans side by side. In WA or the NT, there is no retail competition to compare, so your tariff options come from the government-owned retailer.
Current figures, last updated 2026-06-15
Indicative time-of-use and flat-rate figures. Single-rate usage rates from Canstar (2026-05-18); time-of-use windows and rates are set by network distributors and retailers and vary by state. The illustrative TOU rates are for the calculator and worked example only. Confirm your own plan before relying on these.
The bottom line
Why this matters right now
As more coal retires and more solar and storage come online, the gap between the cheap solar-soaked middle of the day and the expensive evening peak is getting wider, not narrower. That makes when you use power matter more than it ever has, and it makes time-of-use a bigger opportunity for households that can shift load and a bigger trap for those that cannot. So do not switch for the headline off-peak rate. Be honest about your evening usage, check whether a smart meter has already moved you, run the numbers on your own rates, and move your heavy loads into the cheap windows. That is how you turn peak and off-peak pricing into a smaller bill instead of a larger one.
Common questions
A Selectra expert answers your questions about time-of-use pricing
They are the three price bands of a time-of-use tariff. Peak is the most expensive window, usually the early evening on weekdays (often around 3 or 4 pm to 9 pm), when demand is highest and rooftop solar has stopped producing. Off-peak is the cheapest, usually overnight. Shoulder sits in between, covering the rest of the day. The exact times and the public-holiday rules vary by distributor and state, so always check your own plan rather than assuming a national standard.
No. This is the key thing to understand. A time-of-use tariff only beats a flat single rate if you can shift enough of your usage out of the expensive evening peak. If most of your power use happens in the evening (cooking, heating or cooling, screens, lights), the high peak rate can make your bill larger than it would be on a flat rate. TOU rewards households that can move heavy use, such as the dishwasher, washing machine, pool pump or electric-vehicle charging, into the off-peak window or the cheap middle of the day.
Often, yes. A smart meter records your usage by the half hour, which is what makes time-of-use billing possible, so installing one frequently triggers a move from a flat rate onto a TOU tariff, sometimes with little fanfare. You usually have the right to ask to stay on, or move back to, a single flat rate, but you have to act. If you cannot shift your usage and you get auto-switched, check your next few bills and compare them against a flat-rate plan.
The genuinely cheap window has moved to the middle of the day. Millions of rooftop solar systems flood the grid around midday, which has pushed wholesale prices very low (sometimes below zero) when the sun is shining. The expensive, scarce hours are now the evening peak, after the sun sets but while demand is still high. That is the opposite of the old assumption that daytime power is dear, and it is why running heavy appliances at midday increasingly makes sense if your plan rewards it.
It is the share of your usage in the evening peak at which the two tariffs cost the same. Below that share, time-of-use is cheaper; above it, the flat rate wins. The exact figure depends on your peak, shoulder and off-peak rates and your flat rate, so use the calculator on this page with your own numbers. The honest rule of thumb: the more of your usage you can keep out of the peak, the more time-of-use works in your favour.
Not everyone. In the National Electricity Market states (Queensland, New South Wales, the ACT, Victoria, Tasmania and South Australia) you can shop between retailers and choose between flat-rate and time-of-use plans, subject to having the right meter. In Western Australia (served mainly by Synergy) and the Northern Territory (Power and Water) there is no open retail competition, so your tariff options are set by the government-owned retailer rather than by switching.
