Updated: Aug 24, 2022
It feels like electricity retailers deliberately make your power bill confusing doesn't it?
Well as part of our mission for energy literacy in the Northwest we thought we would give you a run down on reading your power bill .
For me there are three reasons for reading your power bill properly:
To work out ways to push down your electricity consumption and therefore your bill
To compare between retail energy providers, to push down your bill
As a cross check that your solar system is working, to again, push down your bill
You are free to change retailers when you want (as long as you are not in a contract). There are lots of retail options and it helps to shop around.
At Geni.Energy we have read hundreds of bills so we thought we would provide a quick overview of what to look for each quarter when that bill comes thru the inbox.
Firstly some terminology - a kilowatt hour (kWh) is a measure of electrical energy equivalent to a power consumption of one thousand watts (W) or one kilowatt (kW) for one hour.
Secondly, your bill is provided by your electricity retailer, you can see many different options on this government site here.
I would avoid doing a Google search for electricity retailers as you will be hammered with advertising forever after and only get to see retailers who pay providers to promote them.
The VERY FIRST thing to keep an eye on and to compare bill to bill, is your average daily usage - or ADU as well like to call it!
This can be presented in different ways - some different options shown here. A small home with just one occupant might use 10-15kWh per day, compared to a large home with a pool pump and air conditioners and hot water systems that could use 25-35kWh. Often businesses and farms could be using 100 or even 200kWh per day.
Where a bill does not state the ADU, you can work yours out simply by taking the total electricity consumed and divide it by the number of days of the bill.
It is important to note the Average Daily Usage over a year - does your electricity consumption go up during winter or do you have more usage in summer, and what could be causing that change?
The more electricity you use, the higher your bill is, so it might suit you to choose an Average Daily Usage number to aim for each quarter or month.
However, not all kilowatt hours are created equal!
There can be three types of circuits on your bill:
1. general usage - this is where most of your consumption comes from
2. controlled load - these are loads such as pool pumps or electric hot water systems that are wired in to only draw power night (see Ct Load on these bills)
3. solar feed in - this is your solar generation that is fed back to the grid
As seen here, there are two different types of tariffs for residential and small business:
Single Rate tariff - where a single rate is charged regardless of when electricity is used - a controlled load is also available on this tariff.
Time Of Use (TOU) tariff - where different prices for electricity apply at different times of the day. Time is divided into Peak, Shoulder and Off-Peak periods which reflect the level of demand on the electricity network.
There is a third tariff for businesses that consume over 160MWh per year, who have been moved to a demand tariff.
For Time of Use tariffs it can be useful to understand when you are consuming your energy.
Take the time category (eg peak, off peak or shoulder) and divide it by the total consumption.
For this example:
Off peak is 61% of the total usage
Peak is 17%
Shoulder is 22%
This shows me, that this home or business is maximising the advantages of its TOU tariff by having the majority of its consumption during off peak times when the price is 23c/kWh compared with peak times which is is 33c/kWh.
To have access to a TOU tariffs you will require a time of use capable meter, which you may not have and you may have to pay for an upgrade.
This TOU clock from Essential Energy shows when these rates are applicable.
NB: Essential Energy provides the poles and wires that the electricity flows in, they are not a retailer.
The TOU rates are designed to encourage a change of habits, to try and incentivise electricity usage outside of peak times; each evening, and to drive more usage overnight and on weekends. At a grid scale this helps smooth out the demand to try to match it more closely with the electricity generation across the grid.
However, as more renewables enter the grid (currently about one third of our grid is renewables) these TOU tariffs become less accurate. We will see more generation during "shoulder" periods and we may be incentivised to use electricity in this time. Or we may be encouraged to store electricity from this time.
You can see more detail about the current Time Of Use tariffs on Essential Energy's fact sheet.
For homes and businesses with solar installed, you can do a basic check of the effectiveness of your system by checking your electricity bill. You should be able to see a "feed-in-tariff" measured in kilowatt hours (kWh). If your solar panels continuously output 1 kW of power for a whole 60 minutes, you will have produced 1 kWh of energy.
On average throughout the year, 1kW of solar will create 4.5kWh of energy per day - obviously in summer this is more like 6kWh/day and in winter could get down to around 3kWh/day. Knowing how many kilowatts of solar you have, helps you estimate how much energy generation you should expect per day.
Remembering, that what your bill shows is your NET generation. After your solar panels create electricity, it is used by your home first. This is called "behind-the-meter" usage. Once the building needs are met, any excess is then "exported" to the grid and noted on your bill. This is all happening instantaneously so it can be possible that at any moment, you are consuming more than you are generating or perhaps a cloud passes by so your generation drops and your home imports from the grid to meet your needs.
It is useful to divide your total export kWh by the number of days in the bill to get your Average Daily Export. In this case, they are exporting around 33 kWh per day (3206kWh over 96 days).
Perhaps this house has a 10kW solar system. So in a sunny February it could be generating around 60kWh per day. The house consumption during solar hours would be 27kWh therefore this house is exporting 33kWh per day (60-27=33).
The benefit of the feed-in-tariff that you receive from exporting excess solar generation is that it helps offset the Daily Use Charges on your bill. Although we are all very aware that our Feed-in tariff has been dramatically reducing. In this situation a daily credit of $1.67 covers the cost of the $1.59 Daily Use Charge, helping them work towards a zero bill.
When comparing across retail energy providers, it is important to not only compare the rates for usage and for generation, but also the "daily use charge" or "supply charge".
Sadly, Enova, my energy retailer recently was forced into receivership due to the volatility in the energy market. So I did a quick comparison of some of the retail energy deals available to me, in this spreadsheet. It shows the comparison between daily charge and the tariffs for each retailer.
NB: these were accurate at the time but may not be a good indicator of price now.
The second step in this comparison, was to do a model bill of my likely usage based off previous bills. I could then see what our bill would have cost from each different retailer. I assumed a daily export of 5kWh, daily peak import of 15kWh and daily off peak import of 20kWh (to charge my Electric Vehicle). That allowed me to make this comparison:
This shows clearly there is more than $10 per month difference in the Daily Charges and up to $130 per month difference in the total bill with the same assumed usage across the options!
NB: There are some retailers I didn't consider as an option because I disagree with their moral practices.
Homes and businesses that already have solar, usually also have a smart meter, although not all. If you have a smart meter (called an Advanced Meter) you can access a greater level of information about your electricity generation and consumption. I like to choose an energy retailer who offers an app for this visibility.
When I can see my usage habits in a pretty graph, it is easier to change my habits to help drive down my bills.
This shows that from about 9.30am I am exporting excess solar generation to the grid (the yellow bars). On this day I probably used the oven to cook dinner, showing a large draw from about 4pm through to 6pm (the orange bars), and the coffee machine can be clearly seen working in the morning!
For those with solar, our aim is to push as much energy consumption as possible into the day time hours, soaking up that free electricity. This can be achieved by setting the washing machine and dishwasher to work during the day, putting a timer on your electric hot water system so it charges during the day and heating or cooling the house during solar times. We want to reduce our evening peak usage as much as possible by switching off as many things as possible by around 4 or 5pm.
This can be tricky but not impossible and savings can be found. Good luck with your energy journey!