Demand tariffs: your peak draw matters
A demand tariff charges you not just for how much energy you use (kWh), but for how fast you use it at your peak moment (kW). Running everything at once costs more than spreading it out.
How it works
A demand tariff has two components:
Usage charge (kWh)
The normal per-kWh charge for total energy consumed — same as any other tariff. Often at a slightly lower rate than flat-rate plans.
Demand charge (kW)
An additional charge based on your highest rate of electricity draw (peak kW) during a measurement window — typically the highest 30-minute average in the billing period.
The peak demand concept
Think of it like this: your electricity connection is a pipe. The demand charge is based on the widest you’ve ever opened that pipe, not the total water that flowed through.
Example: running heavy appliances simultaneously
One bad evening sets your charge
How the measurement works
Your smart meter records your demand in 30-minute intervals. The demand charge is usually based on the single highest 30-minute average (in kW) during a defined measurement window — often aligned with the network peak period (e.g. 3pm–9pm on weekdays).
Some tariffs measure demand across the whole billing period; others reset monthly or quarterly. Check your plan for the specific measurement rules.
How to keep your demand charge low
- Stagger heavy appliances — don’t run the oven, AC, EV charger, and dryer at the same time. Spread them across different hours.
- Use timers and schedules — set your EV to charge at 11pm, your pool pump to run midday, and your dishwasher on a delay.
- Battery discharge — if you have a home battery, discharge it during peak demand windows to reduce your grid draw.
- Solar self-consumption — using solar directly during the day means less grid draw, lowering your measured demand.
Who demand tariffs suit
Demand tariffs are more common for businesses than households in Australia, but they are appearing in residential tariff structures — particularly in states where distributors are moving towards cost-reflective pricing.
They suit households that are disciplined about staggering heavy loads and have consistent, predictable usage patterns. If your peak draw is already low (no EV, no electric heating), demand tariffs can offer a lower per-kWh usage rate. If you tend to run everything at once during the evening, a time-of-use or flat rate may be a safer choice.