What is the Electricity Cost per kWh in Australia? Find Out How Much Electricity is Costing You

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Electricity Cost Per Kwh

Post on June 13th, 2015

How knowing your electricity cost per kWh can save you money

When you have a look at your electricity bill, as well as noticing the surprisingly large fee you’re required to pay (thanks to the rising utility costs around the country), you’ll also notice that your electricity bill comprises a number of different charges. The main ones are your ‘supply charge’, which is a fixed cost per day, and your ‘usage charge’, which is calculated according to the amount of electricity you use. Your usage charge might also be divided into units and blocks, or be charged according to peak or off-peak rates. Understanding the terms on your bill can help you get a better idea of just how much electricity you’re using. This will help you understand your electricity cost per kWh (or kilowatt hour, as it might also be written), which in turn can help you pinpoint how and where you can save money and reduce your electricity costs.

The cost of electricity per kWh in Australia varies depending on which retailer you choose. Understanding your electricity bill and comparing your usage patterns with your supplier’s charging structure can help you save money. Reducing your electricity costs starts with finding the best cost per kWh.

To help you understand your bill in detail, the following information is an easy-to-follow breakdown of electricity terms and how they affect you. Our goal is to help you get to know what each term means and why it’s on your bill, so you can compare electricity options, rates, plans, and providers and start saving on your electricity bill.

Understanding your electricity bill

In the current electricity market climate, it pays (literally) to understand exactly what makes up your electricity bill. More than just the cost of your electricity per kilowatt hour, we want to make sure you know why you’re getting charged the rate you are, and what you can do to reduce your costs.

Here are some of the key things you’ll find on your bill:

    • NMI: This stands for National Meter Identifier, which identifies the electricity meter that has assigned to you for your electricity account.
    • MIRN: The Meter Installation Reference Number identifies the meter assigned to you for your gas account.
    • Kilowatt-hour usage charge: This is your variable usage charge for the specific billing cycle. This is normally displayed in cents per kilowatt hour (kWh), or ‘units’. The base rate you pay for your electricity per kilowatt hour is an important factor in reducing your electricity costs.
    • Supply charge: Sometimes listed as your ‘service to property charge’, this is the fee that your electricity provider charges per day to remain connected to the electricity grid. When comparing electricity providers, it’s important to consider both their cost per kilowatt hour and their daily supply charge.
    • Network charge: Sometimes your supplier adds a network charge to your electricity account. This may also be listed as a ‘distribution charge’, and is added to each account to help pay the upkeep costs for maintaining the electricity network in your area.
  • Electricity tariffs: Also known as your rate. Your household electricity tariff is determined by the pricing structure of your specific energy plan. The most common types of tariffs offered by suppliers are:
    • Single rate tariff, where you are charged at a set rate for your electricity usage, regardless of how much power you use or what time of the day or night you use it.
    •  Time of use tariff, where the rate you get charged per kilowatt hour changes depending on when during the day you use your electricity. This structure usually sees higher rates charged during the day and early evening (“peak” hours), and lower rates charged overnight and early in the morning (“off-peak” hours).
    • Block electricity rate per kWh tariff, where you get charged at one usage rate for a specific amount of electricity (the block), then either a raised a reduced rate for the next block, and so on.
    • Controlled load tariff, which is an electricity meter specifically for individual high-draw appliance operating at your address, like your pool pump or electric hot water heater. This tariff applies to that appliance only, but you can have more than one controlled load operating at one address.

Your electricity retailer is also required to include an energy consumption graph on your bill, which displays how much electricity you used for each billing cycle. This energy consumption graph also shows you your total use for the past year. This is particularly handy, as you can use it to get a rough idea of your electricity usage habits and work out where you may be able to reduce your electricity usage and save money!

As well as understanding the terms used on your electricity bill, it’s also important to understand how your electricity is charged.

How your electricity cost per kWh is calculated

When it comes to your charges, the cost of your electricity is normally charged per unit of electricity, such as cents per kWh in households and small businesses throughout Australia. For larger companies and large quantity electricity needs, electricity may be charged in dollars per megawatt hour in some cases.

As shown on your bill, the amount that you pay for your electricity is determined by a fixed supply charge of a certain amount of cents per day. This is added to your variable electricity usage charge, which is priced according to your retailer’s electricity cost per kWh (cents per kWh).

The more electricity you use, the higher your daily usage charges will be. This is a concept that is easy to understand for most homeowners, and it is used by electricity retailers to encourage consumers throughout Australia to conserve electricity and save on their power bills.

However, the electricity cost per kWh will vary greatly, depending on where you live in Australia as well as the electricity retailer you choose.

Each electricity retailer has a different pricing structure, which means that you will likely pay a dramatically different electricity rate based on your daily usage, your chosen electricity retailer, and the energy plan you choose.

The price structure set in place by each electricity retailer will factor in:

  • Cost of daily operation
  • The cost to maintain electricity network

Additionally, the size and a population density of the area where you live can also contribute to how much the electricity cost per kWh will be state-by-state.

To give you a better example, as of July 2011, the Queensland Competition Authority (QCA) increased notified tariffs for all Queensland households by 6.6%. For a basic household electricity tariff for general domestic usage, electricity is supplied continuously day and night to all household appliances. This domestic tariff in Queensland is also used for power and light sources in homes, flats, and housing units.

At that time, it meant that the electricity rates per kWh in Queensland for domestic use was 22.759 cents; additionally, Queensland residents were charged a monthly service fee per metering point of roughly $8.76.

However, since off-peak electricity for night-time usage is much less expensive when electricity is in low demand, the off-peak electricity cost per kWh in Queensland at this time was little as 9.284 cents per kWh. What a dramatic difference! That is why is so important to compare electricity options

Fast-forward to today, and you’ll see that the cost of electricity around the country has kept up the increase.

The Australian Energy Market Commission 2017 Electricity Price Trends Report published the following representative average prices per State for the cost of electricity per kilowatt-hour.

Statec/kWh
Queensland27.05
New South Wales27.74
Australian Capital Territory19.68
Victoria28.60
Tasmania23.15
South Australia32.31
Western Australia27.17
Northern Territory25.74

It’s important to keep in mind that these are average prices, so whichever retailer you might be with may offer different rates. It might skyrocket to anywhere from 30 to 50 cents during peak hours, or be as low as 13 cents during off-peak times.

The key to saving money on your electricity bill is understanding where your charges are coming from, so you can work out if your current supplier is the cheapest, and whether or not it’s time to make the switch to a new supplier.

If you want to make long-lasting changes to your electricity use, it’s a good idea to work out the amount of electricity each of your appliances uses. This will help you determine whether or not you need to upgrade to a newer, energy efficient model. All it takes is some detective work and some maths.

 

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How to determine your energy use

  • Dig out your latest electricity bill and find out how much you’re paying per kilowatt hour for your electricity.
  • Have a look around and see how much power each of your appliances use, in kilowatts. You can usually find this information on a sticker somewhere on the appliance, or in the user manual. If the appliance’s usage is rated in watts, simply divide that number by 1000 to get its rating in kilowatts.
  • Do a quick estimate of the appliance’s hourly running cost by multiplying its input power rating by the price of your electricity per kilowatt hour. For example, if your dishwasher uses 1500 watts per hour, and your electricity cost is 35 cents per kilowatt-hour, then you can work out that this costs 52.50 cents per hour to run: (1500 ÷ 1000) x 35 = 52.50.
  • Make another estimate as to the average time for which you use that appliance. To do this, just multiply its cost per hour by the average number of hours you use it. For example, if your dishwasher’s cycle is 30 minutes, and you run it eight times each week, then you can work it out that you pay $2.10 a week to run your dishwasher.

Now you can roughly gauge how much electricity each of your appliances uses. This knowledge helps you find ways to save money on your appliance running costs.

How to save money on your electricity bill

Saving money on your monthly power bill can be as easy or as difficult as you want it to be. We recommend that you make it easy for yourself, and undertake the following quick tips:

  • Conserving electricity.
  • Using electricity in cheaper off-peak periods.
  • Comparing electricity retailers near you to get more affordable rates!

Now, while we can’t help you conserve electricity (although we do have some great tips to help you do this), or change when you use your electricity, we can help you to compare electricity retailer rates. Our easy electricity retailer comparison tool will help you get a better rate for your energy use, and take a chunk out of your electricity cost per kWh.

With the help of our free, easy electricity comparison service, you’ll see what savings are available to you. ElectricityWizard will help you to compare energy prices in your area, so you can get cheaper rates in a matter of minutes!

Compare and you could save today!

It’s never been easier to compare energy providers than with ElectricityWizard. Call now on 1300 359 779 and speak to an energy specialist who will work hard to help you find a better deal to meet your needs.


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