How To Read Your Power Bill
Power bills can be confusing, we break down what each charge means and show how solar can help bring your costs down.
Written by
Dean Dunning
Published on
February 10, 2023
What Makes Up Your Power Bill?
Power bills are challenging to make head or tail of – they are confusing to read, let alone interpret what they mean. Hopefully here’s where we can help you understand your power bill, and also show you how solar can assist in reducing it.
No matter which electricity retailer you are with, your bill will be made up of several components. You may find that retailers charge different amounts for these components. They all have different pricing structures. Different retailers will put different margins on different components, this is what makes it really difficult to compare power bills between retailers.
We will use a power bill from Ecotricity to break down what everything means. On the first page of the bill there will usually be a summary followed by a breakdown of charges on the second page.
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What Are Network Charges?
These are the charges the network (such as Aurora or Powernet) charges for the use of their power poles and wires.
The network will charge a usage fee for every unit of energy (kWh) that has used their lines to get to your house. This is shown below as Uncontrolled usage at a charge of $0.1088 per kWh (10.88c).
So for every time a unit of electricity is used from the grid there is a charge of 10.88c. Solar will work to counter this charge during the day. As when you are producing electricity from Solar, it will be fed straight into your home electrical system, therefore you won’t require any/much electricity from the grid.
There can also be a daily charge fee for the network infrastructure. This is shown below as DUNE + Daily charges. This fee is charged per day of the month, as you can see there is a charge of 15c per day x 31 days, totalling $4.65. Fees for the daily charge can range quite a lot between retailers and plans. Ecotricity passes the network charges on at cost, so there’s no hidden margins. You can find what and how the Aurora network charges apply to you here.
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What Are Energy Charges?
This is the actual electricity you buy from or sell to the retailer (Ecotricity) in this case. This is measured in kWh (units) of electricity.
You can see “Low ecoANYTIME”, this is electricity that has been used from the grid and purchased from the retailer, this is the energy consumed. Just like the network usage fee, this grid usage can be lowered by using solar, as for every unit of solar electricity you generate during the day, it’s one less unit you have to buy from the retailer.
Below you can see Export, this is Solar Export, the energy that has not been consumed in the household and therefore sold back to the retailer. This electricity will power one of your neighbour’s homes. The price ranges between retailers on what they will pay for Solar export, you can see below it is 9.49c per unit. The brackets mean minus, it’s what they pay you.
Take a look at our ‘Buy Back Rates’ to see what retailers are currently paying for solar export.
Solar export will get taken away from your total bill cost, therefore reducing your power bill. If you build up enough Solar export to completely offset your bill and more (like below $70.24), then this will get stored as a credit and taken off any future bills, say in Winter.
If you don’t want to send power back to the grid, then you can use a battery or hot water diverter to store that excess energy and offset night-time or hot water electricity usage.
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Other Charges On Your Power Bill
Electricity Authority Levy is a charge the Electricity Authority charges on each unit(kWh) of electricity used from the grid.
‘The Electricity Authority (Authority) is an independent Crown entity responsible for overseeing and regulating the New Zealand electricity market.’
This is a very small fee put on each unit to fund the regulation of electricity distribution in New Zealand. Solar generation will also offset this fee as its charged per kWh used.
The last charge is the Metering Daily Charges. This charge covers the cost of meter reading. Metering fees are charged daily, just like the network daily charges. Retailers will charge different amounts for this fee. Ecotricity passes this on at cost.
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Putting It All Together
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We have been through all the components that make up your bill, so let’s pull it all together. In the bill above we have:
Delving A Little Deeper Into Your Power Bill
Some electricity retailers provide some more helpful information to help you understand your energy use.
Average Daily Energy Usage
This is really helpful when sizing a solar system as it shows the difference between energy use throughout the year. Generally, a more efficient house will have a smaller difference between Summer and Winter usage, as less electricity will be needed for heating.
Carbon Emissions Avoided
This one is pretty unique to Ecotricity as they provide carbon zero electricity, so for every unit of electricity you buy from them, you avoid the emissions you would have caused buying from another retailer.
Average Weekday Breakdown
This information is great when looking to install solar panels. It can help us determine how much consumption happens during the day, which in turn helps design the best solar system for your energy profile.
Need Help Understanding Your Bill?
So there you go, you now should have everything you need to understand your power bill. If you have any trouble, reach out to us and we can help you make sense of yours.
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