Is switching to a time-of-use electricity tariff a good idea? It is important to note that “it is not guaranteed to significantly lighten your bill.” This warning comes from DECO PROTeste, which adds that “without strict discipline to shift consumption to off-peak hours, you might end up paying more than with a standard tariff.”
“The kilowatt-hour price, at first glance, can be misleading. A simple comparison exercise shows a savings of 5.5 cents per kilowatt-hour in the regulated market when choosing a time-of-use tariff over a standard one. From there, the savings can grow: the more you shift electricity use to off-peak hours, the more significant the reward. The plan seems like a silver bullet to reduce electricity bills. But is it really? It’s time to hit the brakes on this mental race for savings,” explains the consumer protection organization.
If considering switching to a time-of-use tariff to reduce electricity costs, you should be aware that the “relationship demands unwavering fidelity.” Without this, “the 5.5 cents less could turn into 3.5 cents more than you would pay with a standard tariff when consuming outside off-peak hours.”
To determine if you can benefit from a time-of-use tariff, you need to thoroughly examine your household’s consumption profile. It’s not just about the amount of kilowatt-hours, abbreviated as kWh. It’s about knowing when the washing machines run or when the iron glides over clothes, and how often, each week, they’re used. If you have an electric vehicle, also note when and how much it is charged. Self-consumption solar panels are beneficial, as they provide energy during peak electricity prices,” recommends the organization.
Questions to consider before adopting a time-of-use tariff
According to DECO PROTeste, before proceeding, you should ask yourself “whether you are willing to spend weekends managing machines or can run them at night, risking disturbing the neighbors, for marginal gains.”
“In other words, do you have the lifestyle for a time-of-use plan? Remember, mistakes are penalized at the rate of 3.5 cents per kilowatt-hour compared to the standard tariff,” warns the consumer protection organization.
Does a time-of-use tariff pay off?
DECO PROTeste emphasizes that the “time-of-use tariff has good intentions, but its rigidity can make it potentially incompatible with many families’ lifestyles.”
They explain: “If you concentrate consumption at the start of the morning and the end of the day and keep a similar schedule on weekends, the time-of-use tariff may not be advantageous. The same applies if you work a hybrid schedule, allowing you to go to the office only a few days a week and stay home for the rest. Between emails and meetings, you might run a few laundry loads. But still, in hours that aren’t off-peak.”
On the other hand, if “you are away most of the day and can leave machines running at night, you might be in luck. However, you would need to consume at least 50% of your electricity during off-peak periods.”
