Electricity Price Rise and How to Save Money

OK, I’m going to tackle the thorny issue of the rising price of electricity, why, and how to reduce our power bills.

With one in ten Australians now using solar power, according to The Australian (5/8/2013), why are electricity prices increasing so rapidly?  The reasons we are given include:

  • an aging power network, so the replacing and maintenance of power poles and wiring
  • expanding networks to cope with the increasing demand for electricity
  • meeting higher safety standards and reliability of power supply
  • the increase in use of electrical appliances such as wide-screen televisions and computers
  • the carbon tax
  • a change over to renewable energy

In Australia, power networks coordinate the collection of electricity from the generator and the delivery to the customer.  Retailers charge the customer for the electricity they use*.  Electricity prices in Australia differ from state to state (or territory) depending on the power network and the retailer.   According to the Australian Government Fact Sheet the electricity price to households has increased 70% over the last four years.  In South Australia, where we live, the price is set to rise another 12% this year, and then forecast to fall 1% for the next two years**.   This last quarter we reduced our energy use by 12% from this time last year and our power bill increased 10%!

Reading the Electricity Bill

Electricity is measured in kilowatt hours (kWh).  The electricity bill should clearly state the total amount of kWh used in the billing period and also show a daily average.  Keeping an eye on the daily average is a helpful way of monitoring the household use of electricity.

In South Australia SA Power Networks only offers peak and controlled load/off-peak meters.  Controlled load/off-peak rates are for specific appliances only, such as  hot water and in-floor heating and run between 11pm and 7am.  A separate meter is usually required for the controlled load appliances, unless the house has solar panels with an input/output meter (this meter replaces the peak and controlled load meters).  Unlike the eastern states, we don’t have smart meters, so our electricity use isn’t timed.  We don’t have the option of lower rates on all appliances for overnight or weekend usage.

Electricity in South Australia is also seasonally priced, so the retailer will charge a higher price for summer,  1st January to 31st March, and a lower rate the rest of the year.

Rates are also stepped for usage, for example the first 296 kWh are .3042 cents/kWh, the next 690 kWh are .3071 cents/kWh, the next 1105 kWh are .3384 cents/kWh (winter 2013).

Substantial savings can be made by connecting an electric hot water service and in-floor heater to controlled load/off-peak heating as the price is currently around 14 cents/kWh, half the peak rate.

Why is electricity more expensive in summer?

Australia has a history of higher summer pricing that predates solar panels.  Options for heating include gas or wood burning stoves, unlike air-conditioners for cooling that are only powered by electricity.  So the power stations have to cope with a spiked demand for electricity on hot days, typically between January and March.

I don’t think solar power comes into this old reasoning.  If a household with solar panels doesn’t use the energy for air-conditioning on hot days, the power feeds back into the grid so there must be enough power for cooling?

Where does our power come from?

In South Australia, 26% of our energy is from wind farms and 3% from solar power.  According to Tristan Edis from the Climate Spectator, when Snowtown II is completed, our total power from renewable energy should reach 30%.  Our reliance on coal has steadily decreased since peaking in 2006/07, similarly with gas though gas is still our highest source of energy.  Solar power still has a long way to go, but is appearing on the graph this year!  http://www.businessspectator.com.au

I don’t know if this article includes solar power created by private residences for their own use, as it states South Australians are accounting for twice the national uptake of residential solar panels.

The Carbon Tax

The carbon tax accounts for 4.6% in South Australia to 14.2% in the ACT of the total electricity bill***.  This tax reduces with a change over to renewable energy.

Solar Power-Purchasing Agreement

We have just signed a contract for solar panels via a power-purchasing agreement.  This is a popular concept in the USA apparently, but has only recently become available in Australia to private residences.  The solar company installs their solar panels on our roof, and we purchase all the power the panels generate at a fixed price (at least 1/3rd lower than the current market price) for a set term.  As we signed the contract before the end of August, hopefully the panels will be approved for the government feed-in tariff until 2016, so we get 6 cents back on each kWh hour of energy we don’t use.  After that time we should break even on any electricity we don’t use.

With this type of scheme the most cost efficient way to use electricity is during sunlight hours.  We still pay our retailer for electricity used outside those hours, so it will be interesting to see if it is more cost effective to power the water heater overnight.  I’m also hoping that in the near future affordable batteries for storing excess energy will become available.

Retrofitting and Energy Saving Appliances

I’m looking at ways to reduce our energy use, especially in winter.  We live in a mid ’80s brick veneer home that leaks air.  Fortunately the ceiling is insulated, but during the winter cold air comes in and warm air leaks out through gaps around the doors and windows.  We get condensation on the windows due to warm air circulating up and over the curtains.  Blinds fitted into the window or pelmets for curtains may solve this problem.  Companies like Magnetite retrofit single-glazed windows with a removable magnetic acrylic panel that makes the window airtight and provides a gap between the outside and indoor temperatures.

Some of our appliances aren’t energy efficient, so I’m looking into the cost of keeping them going versus upgrading to a more energy efficient model that suits the size of our family.   This website compares energy use on a range of brands and appliances:  http://reg.energyrating.gov.au/comparator/product_types/

So to summarise, here’s some ideas to cut your electricity bill:

  • In South Australia, take advantage of controlled load/off-peak for electric hot water heating and in-floor heating.
  • In other states with a smart meter, be careful to match peak power use with the best rates.  Attractive lower off-peak rates may not make up for high power use in peak times so look at how your household uses power.
  • Shop around to find the cheapest retailer with the best contract for your needs
  • Consider a power-purchasing agreement if the cost of buying solar panels is too expensive.  Ask your landlord if you are renting.
  • Try and match your energy use with the time electricity is cheapest – during daylight hours with solar panels, overnight with off-peak or a combination of both.
  • Look at energy efficient appliances, especially the washing machine, clothes dryer, refrigerator, oven, air conditioner and dishwasher.  Only buy the size you need.
  • Use ceiling fans instead of air conditioners for the summer months, and during the winter to push warm air downwards
  • Seal air leaks around all doors and windows
  • Install blinds or lined curtains with a pelmet for more insulation against extreme heat or cold
  • Turn unused appliances off at the wall instead of standby mode
  • Line dry washing when possible and put on warmer clothing instead of turning up the heating.
  • Look at government, energy retailer and other websites to get hints on reducing power usage.

The next post tackles efficient house design…




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Artist in Adelaide, South Australia. I enjoy viewing and participating in street art and experimenting with photography for surface design.

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