Time of use electricity rates may disadvantage older homes, study finds

New research has revealed that time of use electricity rates could be leaving some Australian households worse off, particularly those living in older, less energy-efficient homes.

Dr Lee White from the University of Sydney’s School of Social and Political Sciences conducted the study, which examined how people respond to time of use rates based on their home’s energy efficiency.

“People should have an informed choice about how much energy their home is likely to use,” Dr White said.

The study found that residents of low energy efficiency homes tend to reduce their electricity consumption when on time of use rates, potentially compromising their comfort.

In contrast, those in high energy efficiency homes maintained their energy use patterns.

Time of use rates, which offer lower prices during off-peak hours, are becoming increasingly common among Australian electricity retailers.

However, Dr White’s research suggests these rates could exacerbate the disparity in home comfort between energy-efficient and inefficient dwellings.

Houses built after 2003 are required to meet minimum energy efficiency standards, while older homes often fall short.

Energy-efficient homes typically require less electricity for heating and cooling due to features like better insulation and double-glazed windows.

In New South Wales, there is no requirement for sellers to disclose a home’s energy efficiency rating, leaving potential buyers uninformed about possible energy costs.

Dr White argues that the implementation of time of use rates should be accompanied by additional measures.

“Time of use rates should be accompanied by more immediate feedback on energy use, more supports to upgrade energy efficiency, and ways for people to opt out of time of use rates if it isn’t working for them financially,” she said.

The research highlights the need for greater transparency in the housing market regarding energy efficiency and potential energy costs.

It also raises questions about the equity of time of use rates, particularly for those unable to afford more energy-efficient homes.

As Australia moves towards more complex electricity tariffs, the study underscores the importance of considering the diverse housing stock and its impact on household energy consumption patterns.