Everything you need to know about off-peak (controlled load) electric hot water in NSW — how the tariff works, what it costs, when it heats, and whether it still makes sense in 2026.
Off-peak hot water is an electric storage hot water system connected to a controlled load tariff (also called "off-peak", "dedicated circuit", or "controlled load 1/2"). Instead of heating water whenever the thermostat calls for it, the electricity supply to the hot water system is controlled by your energy distributor — typically Ausgrid or Endeavour Energy in NSW.
The distributor switches your hot water circuit on during periods of low grid demand (usually overnight, between 10pm and 7am) and switches it off during peak periods. Your hot water tank heats up overnight using cheaper electricity, then you draw from that stored hot water throughout the day.
The key benefit is cost: controlled load electricity in NSW costs approximately $0.17–0.22/kWh compared to $0.28–0.38/kWh for general supply (peak/shoulder). This 40–50% discount on electricity makes off-peak electric storage one of the cheapest ways to heat water — despite electric resistance heating being less efficient than gas or heat pumps.
In NSW, controlled load tariffs are managed by your electricity distributor (not your retailer). The two main distributors are:
The exact switching times vary by distributor and season. The distributor controls when power is available — you cannot override this. If your tank runs out of hot water during the day, you must wait until the next off-peak window for it to reheat (unless you have a "boost" switch that temporarily connects the system to general supply at the higher tariff rate).
| Tariff Type | Typical Hours Available | Cost (2026 NSW avg) | Best For |
|---|---|---|---|
| Controlled Load 1 | ~8 hours overnight (10pm–6am) | $0.17–0.20/kWh | Households with predictable usage, large tanks (315L+) |
| Controlled Load 2 | ~18 hours (all except 2pm–8pm) | $0.20–0.23/kWh | Households needing daytime reheat, smaller tanks |
| General supply (peak) | 24 hours | $0.28–0.38/kWh | Continuous flow or when off-peak is unavailable |
Source: Ausgrid and Endeavour Energy published tariff schedules 2025–2026. Actual rates vary by retailer.
Off-peak electric hot water is surprisingly cheap to run — often cheaper than gas. Here are typical annual running costs for a 4-person household in NSW:
| System Type | Annual Running Cost | Notes |
|---|---|---|
| Electric storage — off-peak (CL1) | $250 – $400/year | Cheapest option if tank is sized correctly |
| Electric storage — off-peak (CL2) | $300 – $450/year | Slightly more expensive but more flexible |
| Electric storage — general supply | $900 – $1,400/year | Very expensive — avoid if possible |
| Gas storage | $350 – $550/year | Includes gas supply charge |
| Gas continuous flow | $350 – $550/year | No standby loss but higher gas rate |
| Heat pump | $150 – $300/year | Cheapest overall but higher upfront cost |
Key insight: Off-peak electric storage at $250–400/year is competitive with gas ($350–550/year) and significantly cheaper than electric on general supply ($900–1,400/year). The only system cheaper to run is a heat pump — but heat pumps cost $3,000–5,000 installed vs $1,200–2,000 for an electric storage tank.
Source: Energy consumption based on Australian Government energy rating data. Costs based on 2026 NSW average tariffs.
Because off-peak systems only heat during restricted hours, the tank must be large enough to store all the hot water your household needs for the entire day (or until the next heating window). If the tank is too small, you run out of hot water in the afternoon — and cannot reheat until overnight.
Sizing guide for Controlled Load 1 (overnight heating only):
| Household Size | Minimum Tank Size (CL1) | Recommended Tank Size |
|---|---|---|
| 1–2 people | 125L | 160–250L |
| 3–4 people | 250L | 315–400L |
| 5–6 people | 315L | 400L |
| 6+ people | 400L | 400L + consider CL2 or boost |
Common mistake: Replacing a 250L tank with another 250L tank when the household has grown. If you are running out of hot water in the afternoon, the solution is usually a larger tank (315L or 400L) — not switching to a more expensive tariff.
For Controlled Load 2 (18-hour supply), you can use a smaller tank because the system can reheat during the morning. A 250L tank on CL2 is typically sufficient for 4–5 people.
Off-peak electric hot water remains a valid choice in 2026 — but it is no longer the automatic default it was 20 years ago. Here is when it makes sense and when it does not:
Off-peak IS still a good choice when:
Off-peak is NOT the best choice when:
The solar panel factor: If you have 5kW+ of solar panels, a heat pump hot water system running during the day (on excess solar) costs almost nothing to run — $50–150/year. This makes off-peak's $250–400/year look expensive by comparison. For homes with solar, a heat pump is now the clear winner.
Use this decision matrix to determine the best hot water system for your situation:
| Your Situation | Best Choice | Why |
|---|---|---|
| No solar, no gas, existing electric tank working | Stay on off-peak | Lowest cost, no capital outlay |
| No solar, no gas, tank needs replacing | Heat pump | Higher upfront but lowest lifetime cost + rebates available |
| Solar panels installed | Heat pump (daytime timer) | Runs on free solar, $50–150/year running cost |
| Gas connection available | Gas continuous flow | Unlimited hot water, moderate running cost, long lifespan |
| Large household (5+), no gas | Heat pump + off-peak boost | Heat pump for most demand, off-peak backup for high-usage days |
| Rental property / budget replacement | Electric storage on off-peak | Lowest upfront cost ($1,200–1,800 installed) |
Not sure if your hot water is on a controlled load tariff? Here is how to check:
If you are on general supply (24-hour tariff) and have a storage tank, switching to controlled load can save $500–900/year. Your electrician can arrange the tariff change with your distributor — it typically requires a meter reconfiguration and takes 2–4 weeks.
In NSW, Controlled Load 1 typically heats between 10pm and 6am (8 hours overnight). Controlled Load 2 heats for approximately 18 hours — all hours except the afternoon peak (roughly 2pm–8pm). Exact times vary by distributor and season.
Your tank is likely undersized for your household. Off-peak systems only reheat overnight, so the tank must hold enough hot water for the entire day. A 4-person household on CL1 needs at least a 250L tank (315L recommended). If you have grown from 2 to 4 people, a tank upgrade solves this.
Some systems have a 'boost' switch that temporarily connects the tank to general supply electricity, allowing it to heat during the day at the higher tariff rate. If your system does not have a boost switch, an electrician can install one. Use it sparingly — it defeats the cost benefit of off-peak.
Often yes. Off-peak electric storage costs approximately $250–400/year for a 4-person household, compared to $350–550/year for gas (storage or continuous flow). However, gas provides unlimited hot water and faster recovery, while off-peak requires a correctly sized tank.
If your tank needs replacing anyway, yes — a heat pump has lower running costs ($150–300/year) and government rebates of $1,000+ are available in NSW. If your existing off-peak tank is working well, the payback period for a heat pump upgrade is 5–8 years.
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