Take 900 kilowatt hours over a 90 day quarter, at 30 cents a kilowatt hour with a $1.10 daily supply charge. The usage costs $270.00, the supply charge adds $99.00, and the bill is $369.00.
Divide the whole bill by the units used and the effective rate is 41 cents a kilowatt hour, not 30. More than a quarter of the bill was never about consumption at all.
Why the fixed charge changes the comparison
The supply charge is per day, so it does not scale with usage. In percentage terms it hits light users hardest: the same $99.00 against a small quarter of usage can approach half the bill, while against a heavy quarter it is a modest share.
That is why a plan with a low usage rate and a high daily charge can be the cheaper option for a large household and the more expensive one for a single person in a flat. Comparing only the cents per kilowatt hour cannot detect this.
The right way to compare plans
Take your actual annual usage from last year's bills, run it through both tariffs including the supply charges, and compare the totals. Anything less is comparing one component of a two part price.
It also puts a floor under what efficiency can achieve. Reducing usage to zero on the bill above would still leave $99.00 a quarter, which is the number worth knowing before assuming any measure can eliminate a power bill.
Where the small savings actually are
Replacing a 60 watt bulb with a 9 watt LED running five hours a day saves $16.24 a year at 16 cents a kilowatt hour, and the bulb pays for itself in about three months. That is a genuine return, and it is small in absolute terms.
Scaled across twenty fittings it becomes real money, which is the honest framing: lighting savings are worthwhile and incremental, while heating, cooling and hot water are where the large numbers live, because they run for long periods at high power.
Solar and the fixed charge
Solar reduces the usage component and leaves the supply charge untouched, so payback estimates built from usage savings alone are optimistic. A system costing $12,000 net that saves $1,500 a year pays back in 8.0 years, and that arithmetic depends entirely on how much of the generation you use yourself rather than export.
The electricity bill calculator keeps usage and supply charges separate, the LED savings calculator covers the lighting case, and the solar payback calculator takes the net cost and annual saving as inputs rather than assuming either.