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Everything you need to know about energy

Whether you’re reading a power bill or dealing with your gas or solar provider, you’re guaranteed to come across some jargon. To help you, we’ve compiled a list of some common terms relating to electricity, gas and solar.

Amperage (amps): A measure of the amount of electricity used.

Distributor: Electricity and natural gas distributors own and maintain the distribution networks, electricity power lines, power poles and the natural gas pipelines that distribute the electricity and gas to households and businesses.

Electricity grid: An interconnected network that carries and delivers electricity from power suppliers to consumers.

Energy rating label: This is a mandatory comparative energy label that provides consumers information about the product’s energy performance. When you are comparing appliances, the higher number of stars means the product is more efficient and will have better annual energy consumption.

Energy retailer: The energy retailers buy the electricity from the distributors and sell it to homeowners and businesses. They are responsible for meter reading and billing services.

Exit fee: If you end your electricity or gas contract before it is due to expire, you may have to pay an exit fee which can also be ‘cancellation’ or an ‘early termination’ fee.  These will vary between energy retailers.

Feed-in tariffs: This is a payment made to households or businesses who use solar panels to generate their own electricity.

Fixed charge: The fixed charge (otherwise known as service to property or daily supply charge) is identified separately on your bill and is not based on how much energy you use. Fixed charges can vary between distributors.

Kilowatt (kW): Used to measure electricity. One KW = one thousand watts.

Kilowatt hour (kWhour): This is a standard unit of electrical energy that represents the consumption of one kilowatt in one hour.

Meter reading: The amount of electricity and gas you use in your household or business is read by meter readers. Someone employed by your energy retailer will take quarterly readings and use this information for billing purposes.

Natural Gas: Natural gas is (you guessed it), a naturally occurring gas. It is used in the home for cooking and heating. As one of the cleanest of all fossil fuels, it works more efficiently and produces less waste.

Non-renewable energy: Coal, natural gas and crude oil are example of non-renewable energy sources. Once they are used, they cannot be replaced.

Off-peak: Off-peak electricity refers to a lower, discounted price during specific times. Off-peak times are generally when businesses and homeowners are using less electricity.

Peak: Refers to a set time during the day when electricity demands are at their highest.

Photovoltaic (PV) panels: PV or Photovoltaic panels are the solar panels that are installed to generate electricity from the sunlight.

Renewable energy: Energy that comes from sources that can be renewed or won’t run out including sunlight (solar), wind, tides and geothermal heat (heat from the earth).

Renewable energy certificates (REC): These are distributed by the Australian Government’s Clean Energy Regulator. Energy retailers will purchase a set amount of certificates each year to ensure there is a constant demand for them. You can be eligible to trade in certificates under the Small-scale Renewable Energy Scheme (applies to residential solar PV systems) or the Large-scale Renewable Energy Target.

Standby power: Products with standby power (such as a TV) will have an Off mode, Standby Mode and an Active Mode (when it’s on). Standby mode refers to when an appliance is connected to a power source and has a continuous function such as displaying information or status displays including clocks. A great example of this is a microwave. Even when you aren’t using it, you can see a time displayed. You might notice a red light on your TV even when you’ve turned it off on the remote. This is on standby power. To turn appliances off standby power, you need to switch the appliance off at the wall.

Supply charge: This is a fixed charge and the cost is associated with supplying electricity to a home.

Switching: Refers to when a customer switches to a new offer for the supply of electricity and/or gas, usually with a different energy retailer.

Tariff: This refers to the pricing structure a retailer will charge a customer for electricity consumption. Tariffs will usually differ between energy retailers.

Traditional meters: Meters that are not digital. They use a mechanical spinning metal disk to measure the accumulated amount of electricity used.

Turbine: A machine designed to revolve by a fast-moving flow of water, steam, gas, air or another fluid to produce mechanical energy. 

Usage charge: This is a variable charge which is dependent on the amount of power you use and what the price of energy is

Variable charge: This will be based on the amount of energy you use.

Voltage (volts): A unit used to measure the electric field strength or force that moves electric current through a circuit.

Watt (W): The amps multiplied by the volts give you the wattage (watts). This is a measure of the work that the electricity does per second.

About energy sources

Energy plays an important role in every Australian household and business. We rely on various types of energy for heating, cooling, cooking, transport and machinery operation. Honestly, where would we be without it? There are a number of different energy sources you can use in your home. For years, gas and electricity have competed for people’s attention. Then, over the past few years there has been a spike in interest about solar.


Introduced in the nineteenth century, electricity has become a well-developed utility we rely on in our everyday lives to power household appliances, machinery, lights and technology.  It’s a form of energy that can be generated by natural resources such as coal, gas, hydropower and wind. In Australia, 86 percent of our electricity is generated from fossil fuels which include 73 percent from coal and 13 percent from natural gas.

How is electricity produced?

In power stations, there are large turbines which rely on the heat energy produced from burning coal (others are wind energy or moving water). As the turbines spin, this causes large magnets to turn within wire coils. As the magnets move within the coil, this causes charged particles (electrons) to move within the coil of wire creating what we know as electricity.

From the power station to your home

When the spinning turbines produce the electricity, your electricity is transported via a transmission line which carries the electricity long distances to substations in cities and towns. Once the electricity has reached this point, distribution lines carry small amounts of the electricity from these substations to your home.

How much electricity do we use?

The amount of electricity we use in households alone accounts for a quarter of all energy in Australia. Others include;

  • Manufacturing sector: Largest user with 27%
  • Transport: 15%
  • Mining: 13%

Read more in our article about How does electricity work?


Gas was introduced well before electricity in the eighteenth century and is one of the world’s most important fuel sources. While electricity can be used to run any household appliance, gas is used in the home for heating, cooking and providing hot water.

How is natural gas formed?

Along with coal, natural gas is non-renewable source formed from the decaying remains of pre-historic plant and animal life. It’s described as a colourless and odourless mixture of gases, mostly made up of methane and small amounts of ethane, propane and butane.

Natural gas in Australia

Australia is naturally a gas-rich country. However, current reserves are dwindling and expected to supply Australia with gas until 2050. It’s expected that further gas exploration will lead to the discovery of more large gas-bearing basins.  Read more about gas use in Australia.

Using gas in your home

Most homes have access to electricity however the availability of gas can be dependent on whether a gas pipeline runs down your street or is connected into your building. If you do use gas in your home, you probably find the level of control you have over your cooking is hard to beat. As we explain in how to cook with gas, gas stoves use an actual flame which can heat both the bottom and the sides of the pot. This makes cooking in the home a lot more efficient.

Debating on electricity or gas?

Read What’s cheaper: electricity or gas?, where we take a look at the pros and cons of each and help you decide which one will be more cost-effective.

Solar Power

Solar is referred to as an intermittent energy source because it relies on natural sources (the sun). With the sun’s energy, solar energy can be converted directly into heat and electricity.

How does solar work?

A solar cell (which makes up a solar panel), utilises a photovoltaic effect where an electrical current is generated when the solar cells are exposed to solar radiation (sunlight). When the solar panel absorbs the sunlight, this energy is converted into direct current (DC) electricity. This energy flows into an inverter (this is installed near your electricity meter). The inverter then converts this DC electricity into Alternate Current (AC) electricity. This is the type of electricity you can use in your home.

Read more on the science of solar and the solar rebates available.

Solar energy in Australia

With the realisation that burning fossil fuels for electricity was contributing to climate change, this has driven demand for renewable energy sources such as solar. Renewable energy (hydropower, wind, rooftop solar and bioenergy) makes up only 14% of Australia’s electricity mix with rooftop solar only contributing 2%.

How solar is evolving energy usage in Australia

Consumers want to take more control of their energy usage and find ways to drive the cost of their bills down. As we mentioned in Solar storage: the future is here, the biggest news in solar is the emerging development of battery storage capability. This means household owners will be able to use this technology to store energy while the sun is shining and use that energy at night or on cloudy days.

Read more on what to think about before going solar.

Comparing energy providers

Whether you’re looking for an electricity or gas supplier, comparing energy providers can be a time-consuming process. This is why we have sourced the information you need to help you make your decision. Start comparing electricity and gas suppliers in your state with our customer satisfaction ratings.

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