What are off peak electricity hours? The popularity of Time-of-Use (TOU) plans for residential customers is on the rise. Unlike standard electricity plans that charge a flat rate regardless of the time, TOU plans to introduce a variable pricing structure based on when energy is consumed from the grid. Under this system, your utility company has developed a specific schedule with different rates for peak hours, off hours, and in some cases, super off or partial peak hours.
Understanding these distinctions is crucial as they directly affect your electric bill.
What Is the Difference Between Peak and Off-Peak Hours for Electricity?
You’re charged for the actual electricity you use. In Time-of-Use (TOU) rates, your utility will charge you more for electricity consumption during “peak” afternoon hours when electricity demand is high. The cheapest electricity is available during “off-peak” hours when demand is low. For example, on the East Coast, off-peak summer hours might be between 6 pm and 2 am when temperatures are lower, and people don’t need to cool down their homes, resulting in less electricity demand.
You can reduce your electricity bills by waiting until the lowest time of day if you have TOU rates. You can plan when to run the clothes dryer, and dishwasher, or charge your electric vehicle around these times. The off-peak times are typically at night, but it depends on the specific rate plan of your utility. Utilities use TOU plans to encourage customers to reduce their electricity consumption during peak hours.
Some utility companies offer TOU rates to residential customers, but not all. California was the first state to require everyone installing solar panels to switch to TOU rates under its net-metering 2.0 programs. Commercial buildings often use time-of-use pricing, particularly if their tenants are flexible about when they want to use the most energy.
Considerations to Make Before Signing Up for a Time-Of-Use Electric Rate
Some TOU plans may cost more over time, but there are also significant savings to be made. Ask yourself these questions before you choose a TOU rate plan:
What Are the Electricity Rates Plans That Your Electricity Provider Offers?
There are many residential rate plans available from utilities, including:
- Rate plans based on time-of-use: Determine by the season and time of day. The exact price is determined by the peak and off-peak times.
- Tiered rate plans: Some utility companies charge a higher rate for electricity if you use a lot of energy. They compare your rate to a benchmark to determine the cost. These rates can also be used with TOU plans.
- Solar rate plan: If you have or are considering installing solar panels, your utility may offer a special rate plan that includes net metering. Net metering allows you to receive credit for the energy generated by the solar panels that you do not use.
- Special rates for other utilities: Some utilities offer special rates if you charge an electric vehicle during off-peak times or reduce energy consumption for a specific number of days per year. You can check with your utility to see if there are any special rates available. These special rates are often included in any TOU rate plan.
Reviewing your options online is the best way to find out which plan works best for you. When deciding which plan to choose, it is important to take into account whether you have a solar panel, an EV charging station, or a storage battery.
What Are the Peak Electricity Hours?
The cost of your electricity is always higher during peak hours. You’ll be charged an extra fee for using electricity at those times, but the exact timing and cost depend on your utility provider and rate plan.
The best time to buy electricity at a lower cost depends on where you live and the operational hours of the utilities. For instance, on the East Coast, the demand for air conditioning increases after 2 pm due to the rising summer temperatures. This makes the period between 2 pm and 6 pm the busiest in that region.
During winter, however, the peak hours shift to the early mornings as businesses and homeowners raise their heating to create a more comfortable environment. Regardless of the region or time of year, energy costs generally tend to be lower at night. The specific weekdays and times when rates are higher will vary depending on your location and the season.
Understanding Off-Peak and On-Peak Hours
The determination of off-peak and on-peak hours is made by the state you live in and your energy provider. It’s advisable to check with your electric company to find out their specific off-peak and peak hours, as well as which holidays are considered off-peak.
Many utility companies offer multiple rate plans to choose from, such as time-of-use (TOU) plans. These plans may have different peak hours or even “partial peak” hours with rates lower than peak but higher than off-peak. Rate plans can also vary based on the time of day and the season. Generally, summer rates are higher due to the increased energy consumption from air conditioners during hot weather. Some plans might offer lower peak rates or fewer peak times on weekends.
Peak hours of electricity usage typically align with the times when the majority of people consume electricity. They generally commence in the late afternoon and extend into the evening, coinciding with people returning home from work and utilizing more appliances and lights.
What Are the Peak Hours During Holidays and Weekends?
Most electric companies impose lower charges for hours of minimal usage during holidays and weekends, such as Memorial Day, Labor Day, Thanksgiving, Christmas Day, and New Year’s Day. Additionally, if you have a Time-of-Use (TOU) plan, you may be subject to a demand-based fee based on your highest energy usage, regardless of when it occurred, even during off-peak hours.
When Can I Get Cheap Electricity With Tou Rates?
You can save money on your electricity bill by running your heavy loads late at night and early in the morning. This is typical off-peak times when not many people use electricity. This is often between 10 p.m. to 8 a.m., but it can vary depending on your location and utility provider. During these periods, the cost per kilowatt-hour (kWh) of electricity is generally lower than during peak hours.
How Can I Switch to Using Electricity at Off-Peak Times?
Do you have the flexibility and willingness to make changes in your daily habits during peak hours, even if you do not use much electricity during off-peak times? It may seem impossible for homeowners to schedule their energy use and time of use outside of peak hours, especially if they leave for work every day and return home in the evening.
Many appliances, such as dishwashers, washers, and dryers, have scheduling features that allow you to set up the time in advance. If you have an electric car, you can charge it at night during off-peak times. Additionally, you can reduce your costs by keeping your air conditioner at 78 degrees and above, particularly during peak hours. Taking these actions will help you reduce your energy consumption during peak hours.
What Other Effects Will Switching to TOU Rates Have on Your Bill?
Compare the rate of electricity you are currently paying, including the supply and delivery charges, with the rate offered under a time-of-use plan. Does off-peak pricing offer a lower rate than your current plan? Even if your usage changes, if the rates are similar, you will only save a little by switching to a time-of-use plan.
There Are Other Ways to Save Money on Electricity When You Use TOU Billing
It’s impossible to completely stop using electricity at other times of the day, even if you change your habits to use more during off-peak periods. However, other measures can be taken to keep your electricity bills as low as possible under a time-of-use plan. These measures include developing an energy schedule and using a thermostat that adjusts temperatures during peak times.
Installing a Battery Is a Good Idea
Many homeowners consider installing storage units to provide backup power during outages or peak electricity hours. You can use a backup battery to charge it during off-peak times when electricity is the cheapest. Then, you can discharge the battery and use the stored electricity during peak hours. By doing this, you can take advantage of lower Time-of-Use (TOU) rates and rebates, making energy storage more affordable.
Consider Going Solar
Using clean energy can help you reduce energy costs. Solar panels could save you thousands of dollars over 30 years because they allow you to generate your electricity instead of purchasing it from your utility. The credits you receive for returning excess solar power to the grid depend on when it is generated. You will receive credits based on the peak-hour rate if your solar panels generate a lot of electricity during peak hours. This also means that you will be credited at lower rates for electricity sent back during off-peak times.
In the Northern Hemisphere, solar panels facing west will produce the most electricity during peak hours.
It’s important to discuss with your solar installer the most efficient design for your system to maximize your savings. Get in touch with the solar experts at ESD Solar to know more about your solar needs and start saving on energy bills today!
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