Switching to a time-of-use electricity tariff may not necessarily result in lower bills, cautions DECO PROTeste. The organization warns that “without a strict discipline to shift consumption to off-peak hours, you might actually pay more than with a flat-rate tariff.”
“Initially, the price per kilowatt-hour seems promising. A simple comparison in the regulated market shows a rounded gain of 5.5 cents per kilowatt-hour for choosing the time-of-use tariff instead of the flat-rate. The reward increases as more electricity is used during off-peak hours. The plan seems like a silver bullet to reduce electricity bills, but is it? It’s time to hit the brakes and reassess this rush to save,” the consumer advocacy group explains.
If you are considering switching to a time-of-use tariff to reduce your electricity bill, know that the “relationship demands unwavering loyalty.” Without it, “the 5.5 cent savings could turn into a 3.5 cent increase compared to the simple tariff if consumption occurs outside off-peak hours.”
“To determine if the time-of-use tariff suits you, scrutinize your household’s consumption profile. It’s not enough to just consider the volume of kilowatt-hours, abbreviated as kWh. You need to know when you run your washing machines or press your clothes, and how often these tasks are done each week. If you have an electric car, note when and how much it’s charged. Solar panels are an asset, as they provide energy during peak-price hours,” the organization advises.
Questions to Consider Before Relocating to Time-of-Use Tariff
DECO PROTeste suggests considering “whether you’re willing to spend weekends monitoring appliances or can run them at night, potentially disturbing neighbors, for a marginal gain.”
“In other words, does your life fit a time-of-use schedule? Remember, slips are penalized by 3.5 cents per kilowatt-hour above the simple tariff,” the consumer watchdog warns.
Is the Time-of-Use Tariff Beneficial?
DECO PROTeste highlights that while the “time-of-use tariff is well-intended, its rigidity might not align with many families’ lifestyles.”
It clarifies, “If your consumption is primarily in the morning and evening, and follows a similar pattern on weekends, the time-of-use tariff may not offer benefits. The same applies if you follow a hybrid work schedule that allows you to work from home a few days a week, where between emails and meetings, you are likely to run appliances outside off-peak hours.”
Conversely, “if you’re mostly out during the day and can run appliances at night, you might benefit. But you need to use at least 50% of your electricity during low-demand periods.”
