Will you save with off-peak and smart meters?

There is a pattern for energy use that most households follow, with higher-use periods taking place in the morning before work and school, and after work when people are at home using their appliances.

So, how do off-peak and smart meters help you save on your gas and electricity prices?

Often the cost of gas and electricity during peak time will be higher because there is more demand for this service, so you can alter your times of usage accordingly.

How to save on gas prices with time-of-use pricing

Since the process of heating water is responsible for around a quarter of the average household energy bill, it is important to reduce this cost where possible.

An off-peak water storage system is one way to reduce costs as it only heats water during the off-peak time period. This is usually between 8 p.m. and 7 a.m. on weekdays and 10 p.m. to 8 p.m. the following day on weekends.

There is a shoulder period from 7 a.m. to 2 p.m. during weekdays where energy demand is higher than the off-peak times but does not quite reach the levels of the peak periods.

While an off-peak storage hot water system could mean you see cheaper prices when you receive your bill from your gas supplier, it does not mean it will use less energy. In fact, these systems could use more energy as they are larger, with the capacity to store significant amounts of hot water.

To install one of these systems, it is necessary to ensure your existing hot water system meets your gas suppliers requirements. You may need to install a special meter to measure your hot water usage separately from that of the rest of your energy bill.

If you are trying to save energy, the best solution could be a solar energy system as this relies only on the power of the sun to heat water.

How smart metering could help you save on your electricity prices

If you think your household can shift the majority of its electricity use to off-peak and shoulder periods, having a smart meter might be the best choice to help you see a reduction in these prices.

A smart meter or interval meter can be used to measure the amount of electricity your household uses in 30-minute increments, which then allows the distributor to charge different amounts depending on when the most power is used.

There is no need to have a meter reader come around to check the amount used as it is wirelessly sent from these meters to electricity suppliers.

This means there would be no connection or disconnection fee, making it easier to do an electricity comparison as there is no additional risk that comes with switching from one provider to another.

Certain smart meters also permit you to keep up-to-date with your energy use in real time, as you can hook up an in-home display or web-portal to track your usage.

This could give you some indication of when your household uses most of its power and could encourage you to make small changes that may result in a huge difference on your bills.

For example, if you traditionally put on a load of washing at nighttime and hang it up before bed, instead consider throwing it on in the morning before work, during the shoulder period.

Or, you could run your dishwasher before bed rather than straight after you finish dinner.

Whether or not your household is a good fit for off-peak pricing depends on the type of people living in your home.

If you are a young family, for instance, this might not be your best bet as you will still need to feed, bathe and put your kids to bed during the peak time, which could result in higher bills.

Victoria's flexible pricing

The state of Victoria has just changed its pricing so more people can switch to off-peak pricing plans without the added financial cost of switching over.

If you live in this area you will need to ensure you have a smart meter set up already, but it is worth contacting a few retailers to work out if this is a feasible option.

Before introducing this policy, the Victorian Government commissioned consumer impact studies to work out what the impact would be on customers.

It found that most groups would benefit if they changed their energy usage in response to flexible pricing, including vulnerable and disadvantaged groups.

However, it is still important to do a comparison before you switch - another retailer may be able to offer you a better deal.

Posted by Tim Wolfenden.