Peak vs off-peak electricity rates for small businesses

Most businesses now pay different prices for electricity depending on the time of day. That shift started years ago with the smart meter rollout, and it's reshaping how costs land on a bill.

Quick summary

Peak and off-peak electricity rates split the day into windows that are priced differently. Peak windows usually fall in the late afternoon or evening on weekdays, when grid demand is highest. Off-peak windows cover quieter times like overnights and weekends. Businesses on a time-of-use tariff can lower bills by shifting flexible electricity use away from peak hours, without changing retailers.

Key takeaways

• Peak and off-peak electricity rates charge different prices per kWh depending on the time of day, with peak windows usually falling on late afternoon and early evening on working weekdays.
• Time-of-use pricing only applies if your site has a smart meter (interval meter), which records consumption in 30-minute blocks.
• Peak windows are set by each state's network distributor and can be passed through or adjusted by your retailer, so the times on your bill may not match the network times exactly. In NSW, Ausgrid's small business peak is 3pm to 9pm during June to August and November to March.
• Peak rates are higher because wholesale and network costs rise when grid demand spikes; the gap between peak and off-peak is narrowing as renewables and battery storage grow.
• Businesses can lower bills under a time-of-use tariff without switching retailers by shifting flexible loads (water heating, pre-cooling, battery charging, non-urgent equipment) out of peak windows.
• Time-of-use is not the same as a demand charge. Time-of-use prices kWh by window, while a demand charge is based on your highest 30-minute power draw in kW in a billing cycle.
• Time-of-use is not always cheaper than a flat rate. It suits businesses with overnight, weekend, or shiftable loads. Businesses trading mostly during peak hours with little flexibility may be better off on a flat or structured contract.
• The cleanest way to test which structure suits your business is to overlay 30-minute smart meter data against your tariff's peak window, then compare options across retailers.

What are peak and off-peak electricity rates?

Peak and off-peak rates are two prices applied to the electricity a business uses, depending on the time of day. You pay more during peak hours, when many customers are drawing power from the grid at once, and less during off-peak hours, when demand is lower. Some tariffs also include a shoulder period, which sits between the two. This pricing structure encourages customers to save money by shifting their energy consumption from peak periods, when demand for electricity is high, to off-peak periods.

The structure only works if your meter can measure when you used electricity, not just how much. That's why time-of-use tariffs are tied to interval meters, also known as smart meters. Older accumulation meters record a single total, so they can't support time-of-use pricing.

When do peak periods apply?

Peak windows are not the same everywhere. Each state's distributor, the network company that runs the poles and wires, sets its own peak, shoulder and off-peak periods. Your retailer can then pass through these windows directly or set slightly different ones in your retail contract.

Here are the peak windows network distributors use across four of the largest Australian markets in 2026:

Two things to notice. First, the common pattern is late afternoon and early evening, though some distributors, like Powercor and CitiPower in Victoria, run a much wider 9am to 9pm peak. Second, your retailer can choose whether to mirror the distributor's windows or apply different ones, so the times on your bill may not match the network times exactly.

Worth noting Ausgrid simplified its structure in 2024, merging the shoulder window into off-peak, and there are no peak periods at all in April, May, September or October.

Why are peak rates higher than off-peak?

Peak rates reflect what it costs to supply the grid when it is under the most strain. Most Australian electricity is bought and sold through a wholesale market run by the Australian Energy Market Operator, and wholesale prices in that market rise when demand spikes in the evening peaks and fall when low-cost solar and wind are plentiful. That cost flows into retail and network charges.

There is also a long-term driver. The Australian Energy Regulator uses tariff reform to push more cost-reflective pricing, on the basis that if customers reduce peak demand, everyone benefits from lower network investment. Higher peak prices are a signal, not a penalty. They tell your business when electricity is most expensive to supply.

A short-term point: the National Electricity Market hit a renewable energy share of 51 per cent including storage in Q4 2025, with evening peak prices coming off as wind and battery discharge displaced gas. Peak periods still cost more than off-peak, but the gap is moving.

How do time-of-use rates work for businesses?

A time-of-use tariff has at least two rates per kilowatt-hour (kWh, the standard unit of electricity you pay for). One rate applies during peak hours, one during off-peak, and some tariffs add a third shoulder rate in between. Every 30 minutes, the interval meter records how much electricity you used, and that usage is priced against whichever window it falls in.

For a small business, the behavioural lens is simple. If most of your load is during business hours on weekdays, more of your usage will sit in peak or shoulder windows. If you run overnight or on weekends, more will fall in off-peak.

How can a business lower bills under time-of-use?

You don't need to switch retailers to benefit. The fastest levers are behavioural. Work out which of your loads are flexible, meaning they don't need to happen at a specific time, and move them. Things like water heating, pre-cooling a space before peak, battery charging, warehouse pump cycles and non-urgent equipment tests often qualify.

The intent of time-of-use pricing, as Ausgrid describes it, is to encourage customers to shift consumption from peak to off-peak. That is the whole play. Mapping a week of 30-minute data from your smart meter against your tariff's peak window is usually the quickest way to see where the savings are.

Peak vs off-peak vs demand charges: What is the difference?

Time-of-use pricing is often confused with demand charges. They are related but not the same. Time-of-use charges you per kWh based on when you used it. A demand charge is billed on your highest short burst of power draw in a 30-minute window, measured in kilowatts (kW), regardless of how many hours you ran at that level.

Many medium and larger business tariffs combine time-of-use with a demand charge on top. Work out which one is hitting you hardest before you plan changes.

Who is time-of-use pricing best suited to?

Time-of-use suits businesses with operational flexibility. Cafes and retail stores that only trade in daylight hours tend to sit mostly in shoulder or early-peak windows with limited room to move. Sites that run overnight, run at weekends, or have discretionary loads like battery storage or high-draw equipment can often benefit.

SA Power Networks classifies small business customers as those using under 40,000 kWh a year, and medium business between 40,000 and 160,000 kWh a year. Once a business is in the medium category, tariffs often include a demand component in addition to the time-of-use energy charge.

Next step

If you have a smart meter and a few months of 30-minute data, you already have the raw material for a rate review. Pull your usage profile, overlay your current tariff's peak window, and look for the largest blocks of peak-hour consumption you could actually shift. If the profile shows little flexibility, a competitive flat-rate or structured contract may suit your load better than a time-of-use tariff.

From there, a rate comparison across retailers can confirm whether the tariff and retailer you are on are aligned with how your business actually uses power.

Frequently asked questions

What does time-of-use mean on an electricity bill?

Time-of-use means your electricity is priced differently depending on the time of day it is used. Instead of a single rate per kWh, you pay a higher peak rate during busy hours and a lower off-peak rate at quieter times. The windows are set by your distributor and can be passed through or adjusted by your retailer before they reach your bill.

What are typical peak hours for businesses in Australia?

Peak hours usually fall on working weekdays in the late afternoon to early evening. In New South Wales, Ausgrid's small business peak window is 3pm to 9pm in the June to August and November to March periods. Other distributors set different windows. Your retailer can also apply their own times, so it's worth checking the tariff section of your bill or contract.

Do peak and off-peak rates apply on weekends?

Not usually for small businesses. Most distributor peak windows apply only on working weekdays. For Ausgrid, small business peak pricing occurs on working weekdays only. Weekends and public holidays tend to fall into off-peak or shoulder rates. Retail contracts can vary, so check how your retailer defines working weekdays before planning around them.

Is a time-of-use tariff always cheaper than a flat rate?

No. A time-of-use tariff is cheaper only if enough of your electricity use lands outside peak windows. A business trading 9am to 6pm on weekdays may see most consumption inside peak or shoulder hours, and a flat rate can work out stronger. A review of 30-minute meter data against the two rate structures is the cleanest way to test it.

Can I move off a time-of-use tariff once I'm on one?

It depends on your meter and your retailer. Once a smart meter is installed, SA Power Networks is required to charge the retailer a time-of-use network tariff, but the retailer can still choose to offer a single-rate retail product. Speak to your retailer about available retail structures before assuming you are locked in.

How is a demand charge different from a peak rate?

A demand charge is billed on your highest 30-minute power draw in kilowatts, not on total energy used. A peak rate is a higher per-kWh price during a defined time window. Demand pricing as a charge based on the peak amount of power you draw at one time. A single large spike can set the demand charge for a whole billing cycle.

Why do peak rates vary between states?

Each state's distributor sets its own peak windows based on local grid conditions and demand patterns. The Australian Energy Regulator approves these network tariff structures through its tariff reform framework. Evening peaks are common because that's when residential and commercial demand overlap with lower solar generation.