As many as half of all households are overpaying for their electricity as they subsidise the electricity bills of all other households.

Detailed research of electricity consumption patterns of Victoria's households by energy company AGL found that the existing electricity tariff is resulting in the distortion, with households in financial hardship the most adversely affected.

The research follows a paper released by the Grattan Institute earlier this month that argued the tariff structure does not truly charge consumers – especially heavier electricity users – the full cost associated with their usage.

As a result, some households, those without airconditioners for example, are typically subsidising those with the units installed. Similarly, households without solar panels are subsidising those with them.

"Most electricity customers pay network charges based on the volume of energy they use, regardless of what time of day it's used or how much it costs to supply," said John Bradley, the head of the Electricity Networks Association. "This creates unfair cross-subsidies.