Three ways a granny flat gets power
A secondary dwelling — a granny flat, studio or garden unit — can be connected to electricity in one of three broad ways, and which one you have decides everything about billing. It can have its own separate meter and its own account with a retailer; it can be sub-metered off the main house so the owner reads a private meter and bills the occupant; or it can simply run off the main house's power with no separate measurement at all, folded into one household bill.
Each option has trade-offs in cost, flexibility and legality. A separate meter is the cleanest but costs the most to install; a shared account is the cheapest to set up but the hardest to split fairly and can create tax and tenancy complications if you rent the flat out. Knowing which you have — or want — is the first step.
Separate meter vs sub-metering
- Separate (parent) meter
- The granny flat has its own meter and NMI and its own retailer account. The occupant is a normal customer who can compare and switch. Costs the most to install but gives full independence and clean billing.
- Sub-metering (check meter)
- A private meter downstream of the main house meter measures the flat's usage. The owner reads it and bills the occupant. Cheaper to install, but the owner cannot legally charge more per kWh than they are charged, and rules on on-charging vary by state.
- Shared / no sub-meter
- The flat runs off the house with no measurement. Usage is estimated or bundled into rent. Simplest to set up, but impossible to bill precisely and often a source of disputes.
Billing a granny flat fairly and legally
If you sub-meter and on-charge an occupant, the golden rule almost everywhere in Australia is that you cannot profit from selling them electricity — you can recover the cost at the same rate you pay, but not mark it up. Charging more can stray into acting as an unlicensed energy seller, which is regulated. The specifics differ by state and depend on whether the occupant is a family member or an arm's-length tenant, so check your state's tenancy and energy rules before you set a rate.
For a rented granny flat, a separate meter is usually the cleanest arrangement: the tenant holds their own account, pays the retailer directly, and can choose their own plan — which also removes any awkwardness about the owner marking up power. If a separate connection is not practical, a transparent sub-meter reading shared with the occupant each period is the fairest fallback. Bundling power into rent is easiest but tends to over- or under-charge and offers the occupant no way to save by using less.
Whichever way it is metered, if the granny flat occupant has their own account they have the same right as anyone to compare and switch retailer. A whole-of-market comparison on their real usage — EnergySorted does this for a flat annual fee with no retailer commissions — will usually beat the default plan a new connection is set up on.
Which setup should you choose?
- Renting the flat to a tenant? Favour a separate meter so they hold their own account and choose their own plan — cleanest legally and for billing.
- Housing family informally? Sub-metering lets you split cost fairly at your own rate without the expense of a new connection.
- Very light or occasional use? A shared arrangement bundled into a fair contribution may be simplest, but agree it in writing.
- Before installing anything, get a quote for a separate meter and check your council and network requirements — a secondary dwelling sometimes needs an upgraded supply.
- If sub-metering, confirm your state's rules on on-charging so you recover cost without unlawfully marking it up.