Home energy terms explained
Tariffs, supply charges and usage charges – these are the energy terms you may recognise on your energy bill. But what do they mean?
According to recent RACQ research, more than two thirds of Queenslanders (70%) are confident they understand their energy bill, but a quarter (26%) are unable to define key energy terms1.
Similarly, the statewide survey found almost one in three (31%) have heard of renewable energy but don’t understand what options are available.
Knowing basic energy terms can give you the confidence to compare plans, question charges and make more informed decisions about your electricity use.
Tariff
A tariff is the price of electricity or gas you pay under an energy plan. The tariff includes a supply charge and a usage charge. There are different types of energy plans that you can choose, and some have usage charges that are dependent on the time electricity is being used (peak, off-peak or shoulder). Peak times are when electricity charges are most expensive due to high demand, shoulder times are slightly less than the peak and off-peak is the cheapest period where consumption is at its lowest.
Usage charges
The usage charge is also known as the consumption charge and is calculated based on the electricity you use within your home. It is calculated in cents per kilowatt hour for electricity.
Supply charges
The supply charge is the fixed, service cost of having electricity connected to your home, even if you don’t use any. It may appear on your bill as a charge calculated in cents per day.
Solar feed-in tariff
This tariff refers to the compensation received for supplying excess energy to the grid via solar panels. The specific amount is influenced by various factors, including the type of solar panels installed, how much they are generating at any given point in time and the rate provided by your retailer.
Home battery
By installing a home battery, you can store excess solar energy to reduce your reliance on the grid and reduce your electricity costs. Many battery systems can also provide backup power during outages. This refers to the electricity supplied to your home when the grid goes down. Backup power can be partial-home (powers selected priority circuits) or full-home (powers every circuity in your home) when the power goes out.
Vehicle to Grid
Vehicle to Grid (V2G) systems in the near future will allow compatible electric vehicles to send energy to, and receive energy back from, the grid during peak energy demand periods. Similar to a home battery, this can be an effective way to power your home during an outage.
1Survey findings from RACQ Quarterly Consumer Omnibus, FY26 Q3, n=510
Australian Government. (2025). Energy Made Easy.https://www.energymadeeasy.gov.au/article/glossary
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Things to note
The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.
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RACQ Operations Pty Ltd (ABN 80 009 663 414 AR 000234978) and Members Travel Group Pty Ltd (ABN 45 144 538 803 AR 000432492) are acting as an Authorised Representative of the issuer of the insurance, Tokio Marine & Nichido Fire Insurance Co., Ltd. (ABN 80 000 438 291 AFSL 246 548). Any advice set out above is general in nature only, and does not take into account your objectives, financial situation or needs. Before purchasing any travel products, please consider the RACQ Travel Insurance Product Disclosure Statement (PDS) and the Target Market Determinations (TMDs) that apply to these products. Whilst the PDS outlines the Terms and Conditions of these products, the TMDs outline the intended class of customers that comprise the target market for these travel products. This will allow you to consider which products best suit your objectives, financial situation and needs and consider the products appropriateness to your personal circumstances. TMDs also outline matters involving the distribution and the review of these products. The PDS, Supplementary PDS and TMDs for each travel product can be found here.