What is a tariff?

We charge a network ‘tariff’ to recover the costs of delivering electricity to the homes, hospitals, schools, businesses and community services across 95 per cent of NSW and parts of southern Queensland.

The word ‘tariff’ can mean the same thing as ‘price’, but tariffs are more than just a single price. The price you pay for electricity is made of a number of components and packaged together by retailers. For more information about your electricity bill, visit Network Pricing Explained.

What is the default tariff?

With a growing number of Essential Energy customers having rooftop solar panels, we have introduced the Sun Soaker tariff as the default tariff for new low voltage residential and small business connections, as well as anyone with meter or energy resource changes from 1 July 2024.

For the first year, it will only have a consumption (usage) component, similar to our legacy time of use tariffs.

From 1 July 2025, an export component will be added to the default Sun Soaker tariff that contains an export charge and an export rebate.

Customers will transition to our two-way tariff:

• as they make a new connection to our network, or
• when their meter is upgraded to a smart meter, or
• when they connect a new solar system or battery, or upgrade an existing one, or
• on 1 July 2028 for all existing customers with a smart meter.

Existing customers may choose to opt-in early to this two-way tariff or stay on their current network tariff until 1 July 2028.

This change was included in Essential Energy’s Tariff Structure Statement submitted to the Australian Energy Regulator as part of the Regulatory Determination process - it was approved on 30 April 2024.  Essential Energy undertook extensive customer consultation across NSW to design a plan to transition to two-way pricing.

What is a two-way tariff?

A two-way tariff consists of a consumption price and a price for exporting electricity to the grid - which will be either a rebate or a charge, depending on when and how much customers export into the network.

The export charge reflects the need to recover costs for upgrading the network to facilitate high levels of solar exports that the network experiences between 10am and 3pm.

An export rebate will incentivise customers to send the power they generate to the grid when it is needed most, during the peak demand period between 5pm-8pm.

How will the two-way tariff impact customers?

From 1 July 2025, the export charge and rebate element will be enabled. Pricing will be settled closer to that date; however, we expect the export rebate to be set at a very generous level compared to the export charge. Customers are also able to export a basic level without charge each day.  For illustrative purposes indicative prices for 2024-25 are:

• The indicative export charge for 10am-3pm is less than 1 c/kWh (only applies to exports above the free threshold of 7.5kWh/per day)
• The indicative export rebate for 5pm-8pm will be around 11 c/kWh.

It is important to note that electricity retailers package network charges in different ways for customers, and networks cannot control how retailers apply our network charges to their customers.

Essential Energy will not make more money from introducing an export charge. Funds received will be used to offset export rebates to customers and supplement the costs of upgrading the network. The total amount Essential Energy can earn each year, is set by the Australian Energy Regulator. Anything above this is given back to customers via lower network charges.

We encourage customers to become more involved in their energy usage, shop around for a retail package that best suits their needs and, if interested, consider home energy monitoring systems. Retailers and distributors can provide customers with 12 months of their usage data (with a smart meter) to help understand more about their energy consumption (and export) to inform their choices. 

Essential Energy has introduced two-way pricing tariffs to improve fairness for customers for how they use the network to consume and export electricity. Two-way tariffs provide price signals to encourage customers with rooftop solar panels or household batteries (known as behind-the-meter generation) to export power into the grid when it is needed during peak demand periods.

The grid was built for a one-way flow of power for people to consume. Too much electricity being exported, without people consuming it, causes voltage and heat issues and means we need to spend money upgrading the network. For fairness, customers without the capacity to export electricity should not have to pay more. The two-way tariff encourages customers with export capacity to self-consume more of their own generation when the sun is shining, and where possible, export when it is needed by others.

To learn more about peak demand, visit Timing is Everything.

Other tariffs

In addition to the default tariff, Essential Energy also has a demand charge tariff that customers can opt into. This tariff includes a charge for the maximum demand in one half hour period within the month. For the residential tariff this half hour period must be within 5pm – 8pm on weekdays. The demand tariff rates are cheaper for consumption than the default time of use tariff.

Residential and small business customers can opt into a demand charge tariff instead of their time-of-use tariff. This is beneficial for customers who tend to use a large amount of electricity during off peak periods.

Some customers may be on obsolete tariffs. For more information about these tariffs, visit Tariff Structure Statement.

Network tariffs are regulated by the Australian Energy Regulator and are charged to retailers. How these tariffs are packaged up, along with generation and administration costs, is determined by the retailer and offered to customers.

Customers can ask their retailer to change their network tariff structure once in a 12 month period.