Peak and off-peak electricity tariffs can be a great way to save on electricity. So what are they, and are they right for you?
The next time you look at your power bill, you might notice there are two different types of costs for your power:
- Fixed charges – these are displayed as cents or dollars per day. You are charged this fixed rate each day, regardless of how much power you use
- Variable charges – the cost of the power you’ve used, based on consumption in kilowatts per hour (kWh)
While all power bills use this same structure, how your variable charge is calculated can differ between plans and providers. While some opt for a standard rate per kWh, others opt to mix it up, offering different prices for power used at different times.
This is known as a peak/off-peak tariff or ‘time of use’ pricing and, depending on how you use power, it’s a simple way to save on your electricity bill.
What is peak/off-peak power?
If your power plan uses time of use pricing, then you are charged a different rate of power depending on when that power is used. For example:
- Peak: 25c per kWh
- Off-peak 17c per kWh
This differs from a standard plan, which offers a single kWh price regardless of when you are using electricity.
What are peak and off-peak electricity times?
The exact times may differ between plans, and even location and/or network. But generally speaking, peak times are Monday to Friday, 7am-11am & 5pm-9pm.
How providers choose to offer their off-peak electricity differs. While some opt to provide cheaper rates at any time outside of peak hours, others opt for a day/night plan. On these plans, you only get off-peak electricity rates during the night (11pm-7am).
Off-peak and more off-peak
Some electricity providers offer three different rates of power, in the form of peak, off-peak and night rates (with nights being the cheapest). Other providers may refer to it as peak, off-peak shoulder, and off-peak. But the principle remains the same: you get cheaper rates during the day and weekends, and the cheapest rates overnight.
Why not just offer cheaper rates all the time?
There are a couple of reasons for offering cheaper rates for off-peak electricity:
Demand raises costs
For starters, wholesale electricity prices largely depend on demand. When demand is high, such as during peak times, your power company needs to pay more for the electricity it provides you. When demand is lower, such as during off-peak times, the wholesale price of electricity is cheaper.
So by incentivising users to use more power during off-peak times, power providers can ease peak demand and reduce overall costs. This means cheaper power for them and, if they’re nice, better rates and deals for their customers.
While most of New Zealand’s power generation is renewable, we do rely on dirty fossil fuel generation to help out during peak periods. By minimising the strain on our electricity grid during peak times, we can minimise how often we turn to fossil fuel generation.
Is a peak/off-peak power plan right for me?
This depends on a few factors:
- To make up for the cheaper off-peak rates, are you getting charged more for your peak power?
- How much electricity usage can you shift off-peak?
You may find that a power plan offers a great night rate but, to compensate, its standard rates are higher. This means to avoid overpaying, you need to direct as much of your power usage as possible to off-peak times.
It’s important to note that not all plans offering off-peak electricity charge more for peak rates. You may find a plan that has cheap rates all around! Even so, how much of a bargain it’s going to be will depend on how much usage you can shift off-peak.
Peak/off-peak tariffs may be best for:
- EV owners – who can use the cheap night rates to charge their EVs
- People who work odd hours – if you work nights and are home all day, for example, you can run all your appliances during cheaper daytime rates
- People who work from home – working from home can really add to your power bill. Cheaper power through the middle of the day can make a big difference
- Night owls and early birds – up extra late or extra early? Use that time for showers, laundry, and loads in the dishwasher
- Homebodies – typically all weekend is considered off-peak. So if you’re a homebody, this can not only save on your existing usage, but allows you to shift plenty of your chores to the weekend, too.
Do note that the above suggestions are under the assumption you are getting off-peak rates during the day. As mentioned above, some plans only offer discounted rates at night.
And aside from your rates, there are plenty of other factors to consider when choosing a power provider, which might determine whether a time of use plan is right for you
Does your provider offer:
- Signing on credit/deals
- Free power hours
- Excellent customer service
- Helpful online tools and/or a great phone app
- The ability to bundle other utilities such as broadband, gas, and/or phone plans for further savings
- Do you have to sign on for a long-term contract or can you leave whenever
Peak and off-peak power plans: what’s available?
Below we have provided an overview of all the major electricity providers in New Zealand that offer one or more plans with peak and off-peak electricity rates. Do note the actual rates offered will be based on your personal information, so be sure to visit individual retailer websites for a quote.
Flick Electric Co.
Flick Electric Co is a proudly independent power company based in Te Whanganui-a-Tara (Wellington). Founded in 2014 by six Wellingtonians, the company says they’re built on the bones of fairness, honesty and transparency.
It’s also the winner of this year’s Most Satisfied Customers | Electricity Providers Award winner.
Flick Electric’s Off Peak power plan lets you save between 21%-59% (based on meter configuration, network area and load group) of your peak power price.
Peak times: 7am-11am, 5pm-9pm
Off-peak times: 11am-5pm (excluding Christchurch), 9pm-7am & all day weekends.
A new face in power here in New Zealand, Octopus energy are storming onto the market with great rates. Notably, if you’re a low user, which most Kiwis are, you’ll pay no fixed daily rate whatsoever. In a market where several providers have just doubled their low user daily rates to 66c a day, that could provide a massive saving.
Do note, however, that you may find your peak rates with Octopus are a bit higher. So you’ll need to use plenty of off-peak and night power to compensate.
Peak times: 7am-11am, 5pm-9pm
Off-peak: 11am-5pm, 9pm-11pm & 7am-11pm on weekends
Night: 11pm-7am everyday
→Related article: Octopus Energy: A New Deal in NZ Electricity
Powershop power works a little differently from other power companies. Its online shop sells power packs, where you can buy a range of special discounted packs of power. Powershop’s Get Shifty rates offers you discounted rates during off-peak hours. These times differ depending on your area and network. You can see more info around off-peak hours here.
Electric Kiwis MoveMaster plan offers discounted rates during off-peak shoulder times and half-price rates during off-peak. Notably, Electric Kiwi’s morning peak rates are just 7am-9am. Whereas all other providers charge peak rates until 11am. So if you’re around the house mid-late morning, you can get a great deal.
Throw in the fact that all Electric Kiwi plans come with an hour of free off-peak power, and there’s plenty of savings to be had!
Peak times: 7am-11am, 5pm-9pm
Off-peak shoulder times: 9am-5pm, 9pm-11pm
Half price night times: 11pm-7am
Ecotricity sets itself apart as New Zealand’s only provider of 100% Renewable and carboNZero Certified electricity. Its simple plans offer the choice of a fixed-price for power, or a time of use plan. This includes just the two rates – one for peak and one for off-peak.
Peak times: 7am-11am, 5pm-9pm
Off-peak times: 9pm-7am, 11am-5pm
Contact Energy’s Good Night’s Plan is not a peak/off-peak plan in the traditional sense. But it does offer the opportunity to shift your usage and save, with three hours every night of free power. Note that outside of the free hours there is just a single variable rate, so you don’t get the benefit of off-peak rates during the day, or overnight.
Electric vehicle power plans
While these providers don’t offer standard time of use plans, they do provide discounted night rates for EV owners. While designed to save on EV charge costs, you can run other appliances during these hours to make the most of the discounted rates.
- Fixed plan for three years
- Cheaper night rates (9pm-7am)
- Guaranteed rates for three years
- A free smart meter install, if you don’t have one already
- $300 signing-on credit
If you have an EV, Genesis will give you half-price power from 11pm-7am every night.
Mercury’s EV Fuel Package applies a 20% discount to your existing Mercury plan between the hours of 9pm and 7am every night.
Compare electricity providers with Canstar Blue
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About the author of this page
This report was written by Canstar Content Producer, Andrew Broadley. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.