LED bulbs use 75% less energy than incandescent bulbs — DOE
    Turning off lights when leaving saves $30-50/year per household — ENERGY STAR
    Standby power ('vampire load') can account for 5-10% of home energy use — DOE
    ENERGY STAR certified TVs use 25% less energy than standard models
    Programmable thermostats can save about 10% on heating/cooling — DOE
    Sealing air leaks can save 10-20% on heating and cooling costs — ENERGY STAR
    Heat pumps can reduce heating energy use by 50% vs. electric resistance — DOE
    Ceiling fans allow you to raise AC settings 4°F with no comfort loss — DOE
    Heating water accounts for about 18% of home energy use — DOE
    Low-flow showerheads save 2,700 gallons/year for a family of four — EPA
    Washing clothes in cold water can save $60+/year on water heating — ENERGY STAR
    Fixing a leaky faucet can save 3,000+ gallons/year — EPA
    ENERGY STAR refrigerators use 9% less energy than standard models
    Clean refrigerator coils annually for optimal efficiency — DOE
    Air-drying dishes instead of heat-dry saves 15-50% on dishwasher energy — DOE
    Proper attic insulation can cut heating/cooling costs by 15% — ENERGY STAR
    Windows can account for 25-30% of home heating/cooling energy use — DOE
    Window film can reduce solar heat gain by up to 70% — DOE
    Average US home solar system offsets 3-4 tons of CO₂ annually — EPA
    Solar panel costs have dropped 70%+ over the past decade — SEIA
    EVs cost about 60% less to fuel than gas vehicles — DOE
    Proper tire inflation improves gas mileage by 0.6% on average — DOE
    The average US household spends $2,000+/year on energy — EIA
    ENERGY STAR products have saved Americans $500 billion on energy bills
    LED bulbs use 75% less energy than incandescent bulbs — DOE
    Turning off lights when leaving saves $30-50/year per household — ENERGY STAR
    Standby power ('vampire load') can account for 5-10% of home energy use — DOE
    ENERGY STAR certified TVs use 25% less energy than standard models
    Programmable thermostats can save about 10% on heating/cooling — DOE
    Sealing air leaks can save 10-20% on heating and cooling costs — ENERGY STAR
    Heat pumps can reduce heating energy use by 50% vs. electric resistance — DOE
    Ceiling fans allow you to raise AC settings 4°F with no comfort loss — DOE
    Heating water accounts for about 18% of home energy use — DOE
    Low-flow showerheads save 2,700 gallons/year for a family of four — EPA
    Washing clothes in cold water can save $60+/year on water heating — ENERGY STAR
    Fixing a leaky faucet can save 3,000+ gallons/year — EPA
    ENERGY STAR refrigerators use 9% less energy than standard models
    Clean refrigerator coils annually for optimal efficiency — DOE
    Air-drying dishes instead of heat-dry saves 15-50% on dishwasher energy — DOE
    Proper attic insulation can cut heating/cooling costs by 15% — ENERGY STAR
    Windows can account for 25-30% of home heating/cooling energy use — DOE
    Window film can reduce solar heat gain by up to 70% — DOE
    Average US home solar system offsets 3-4 tons of CO₂ annually — EPA
    Solar panel costs have dropped 70%+ over the past decade — SEIA
    EVs cost about 60% less to fuel than gas vehicles — DOE
    Proper tire inflation improves gas mileage by 0.6% on average — DOE
    The average US household spends $2,000+/year on energy — EIA
    ENERGY STAR products have saved Americans $500 billion on energy bills
    LED bulbs use 75% less energy than incandescent bulbs — DOE
    Turning off lights when leaving saves $30-50/year per household — ENERGY STAR
    Standby power ('vampire load') can account for 5-10% of home energy use — DOE
    ENERGY STAR certified TVs use 25% less energy than standard models
    Programmable thermostats can save about 10% on heating/cooling — DOE
    Sealing air leaks can save 10-20% on heating and cooling costs — ENERGY STAR
    Heat pumps can reduce heating energy use by 50% vs. electric resistance — DOE
    Ceiling fans allow you to raise AC settings 4°F with no comfort loss — DOE
    Heating water accounts for about 18% of home energy use — DOE
    Low-flow showerheads save 2,700 gallons/year for a family of four — EPA
    Washing clothes in cold water can save $60+/year on water heating — ENERGY STAR
    Fixing a leaky faucet can save 3,000+ gallons/year — EPA
    ENERGY STAR refrigerators use 9% less energy than standard models
    Clean refrigerator coils annually for optimal efficiency — DOE
    Air-drying dishes instead of heat-dry saves 15-50% on dishwasher energy — DOE
    Proper attic insulation can cut heating/cooling costs by 15% — ENERGY STAR
    Windows can account for 25-30% of home heating/cooling energy use — DOE
    Window film can reduce solar heat gain by up to 70% — DOE
    Average US home solar system offsets 3-4 tons of CO₂ annually — EPA
    Solar panel costs have dropped 70%+ over the past decade — SEIA
    EVs cost about 60% less to fuel than gas vehicles — DOE
    Proper tire inflation improves gas mileage by 0.6% on average — DOE
    The average US household spends $2,000+/year on energy — EIA
    ENERGY STAR products have saved Americans $500 billion on energy bills
    Bill Reduction & MonitoringIntermediate Level#Grid#Bill#Money Saving#Behavior

    Time-of-Use Electricity Rates: A Complete Strategy Guide (2026)

    TOU rates can save you hundreds—or cost you hundreds. Master the art of load shifting to exploit peak and off-peak price differences.

    Marcus Vance
    Updated: Jan 12, 2026
    8 min read

    The Grid's Rush Hour Problem

    Imagine if highways charged different tolls based on traffic. $1 at midnight. $15 during rush hour. Would you change your commute? Most people would.

    That's exactly what Time-of-Use (TOU) electricity rates do. They charge more when everyone wants power (hot summer evenings) and less when demand drops (late night). The price difference can be 2x to 4x—meaning your electricity at 6 PM might cost quadruple what it costs at midnight.

    Utilities love TOU rates because they reduce strain on the grid during peaks. Consumers can love them too—if they play the game right.

    How TOU Pricing Works

    The Basics

    Instead of paying a flat rate (say, $0.15/kWh) all day, TOU plans divide the day into periods:

    Period Typical Hours Rate Example
    Peak 4-9 PM weekdays $0.35-0.50/kWh
    Off-Peak 9 PM - 4 PM $0.12-0.18/kWh
    Super Off-Peak 12 AM - 6 AM $0.08-0.12/kWh

    Weekends and holidays are usually off-peak all day.

    Seasonal variation: Summer peaks are typically more expensive than winter peaks. Some utilities have entirely different rate structures for summer vs. winter months.

    Why the Price Difference?

    The grid is sized for peak demand. Power plants that only run during peaks (called "peaker plants") are expensive to operate. Transmission lines must handle the maximum load, not the average.

    When everyone runs their AC at 5 PM, utilities must fire up inefficient gas turbines, buy expensive power from neighbors, or risk brownouts. Those costs get passed to peak-hour users.

    Who Wins and Loses on TOU

    TOU Winners

    Electric Vehicle Owners: EVs consume 10-15 kWh per day. On flat rate at $0.15/kWh, that's $45-67/month. On TOU with off-peak charging at $0.10/kWh, it's $30-45/month. Annual savings: $150-250.

    Solar + Battery Owners: Charge your battery during off-peak (or from solar), discharge during peak. You're effectively buying low and selling high.

    Night Owls and Early Birds: If your household naturally uses most electricity before 4 PM or after 9 PM, TOU is free money.

    Work-from-Home with Flexibility: If you can shift loads (laundry, dishwasher, cooking) to off-peak hours, you win.

    TOU Losers

    Families Home 4-9 PM: Kids home from school, dinner cooking, AC blasting, TVs on. If this is when your household peaks, TOU will hurt.

    Renters Without Laundry Control: If your building runs shared laundry during peak hours, you pay peak rates.

    The Elderly on Fixed Schedules: If adjusting daily routines is difficult, flat rates provide predictability.

    The Math: Calculating Your TOU Savings (or Losses)

    Before switching to TOU, do the math with your actual usage data.

    Step 1: Get Interval Data

    Contact your utility or log into your online account. Request "interval data" or "Green Button data"—your usage in 15-minute or hourly increments. This reveals when you use power, not just how much.

    Step 2: Apply TOU Rates

    Multiply each interval's usage by the TOU rate that would apply during that hour. Sum it up.

    Step 3: Compare to Flat Rate

    Calculate what you'd pay on your current flat rate. If TOU is lower, switch. If it's higher, stay put.

    Example Calculation

    Household: 900 kWh/month usage

    Current flat rate: $0.16/kWh = $144/month

    Usage distribution (from interval data):

    • Peak hours (4-9 PM): 250 kWh
    • Off-peak: 550 kWh
    • Super off-peak: 100 kWh

    TOU calculation:

    • 250 kWh × $0.38 (peak) = $95.00
    • 550 kWh × $0.15 (off-peak) = $82.50
    • 100 kWh × $0.10 (super off-peak) = $10.00
    • Total: $187.50/month

    Verdict: This household would pay $43 MORE per month on TOU. Bad idea. They use too much during peak.

    But wait: If they shifted 150 kWh from peak to off-peak (dishes, laundry, EV charging):

    • 100 kWh × $0.38 = $38.00
    • 700 kWh × $0.15 = $105.00
    • 100 kWh × $0.10 = $10.00
    • New total: $153/month

    Now TOU is worse by only $9/month. With more aggressive shifting, it could beat flat rate.

    Load Shifting Strategies

    Here's how to move your usage from peak to off-peak:

    High-Impact Shifts

    Electric Vehicle Charging

    • Use your EV's scheduled charging feature to start at 9 PM or later
    • Never charge between 4-9 PM
    • Impact: 10-15 kWh/day shifted = $30-50/month savings

    Dishwasher

    • Run the dishwasher after 9 PM or use a delay-start feature
    • Modern dishwashers use 1.5-2 kWh per cycle
    • Impact: 45-60 kWh/month shifted = $10-15/month savings

    Laundry (Washer + Dryer)

    • Dryers are energy hogs: 3-5 kWh per load
    • Schedule laundry for weekends or after 9 PM
    • Impact: 50-80 kWh/month shifted = $12-20/month savings

    Pool Pump

    • Pool pumps run for hours. Schedule for early morning.
    • Impact: 100-200 kWh/month shifted = $25-50/month savings

    Medium-Impact Shifts

    Pre-Cooling Your Home

    • Run AC aggressively at 3 PM to pre-cool the house
    • Let temperature rise slightly during peak (4-9 PM)
    • Use thermal mass to coast through peak
    • Impact: 20-40 kWh/month shifted

    Water Heater Scheduling

    • If you have an electric tank water heater, use a timer to heat water before peak
    • Heat pump water heaters are ideal—they can be scheduled via app
    • Impact: 30-60 kWh/month shifted

    Cooking Timing

    • Ovens use 2-5 kWh per hour. Cook earlier or use the microwave during peak.
    • Impact: 10-20 kWh/month saved

    Smart Home Automation

    Smart Thermostats (Nest, Ecobee)

    • Pre-cool/pre-heat before peak
    • Accept slightly wider temperature bands during peak

    Smart Plugs with Scheduling

    • Schedule high-draw devices (space heaters, dehumidifiers) for off-peak

    EV Charger Apps

    • All Level 2 chargers have scheduling. Use it.

    Battery Systems (Tesla Powerwall, Enphase, etc.)

    • Configure for "Time-Based Control" to charge off-peak, discharge on-peak

    TOU Pitfalls to Avoid

    Pitfall 1: Summer Peak Shock

    TOU rates often have much higher peak rates in summer. A rate that looks reasonable in March might be brutal in August. Check the seasonal schedule.

    Pitfall 2: Underestimating Peak Usage

    People overestimate how much they can shift. Cooking dinner at 6 PM isn't optional for most families. Be honest about your flexibility.

    Pitfall 3: Ignoring Demand Charges

    Some TOU plans include demand charges—fees based on your highest 15-minute power spike in the month. Running the dryer, oven, and EV charger simultaneously could cost $20-50 in demand charges alone.

    Pitfall 4: Not Re-Evaluating

    Life changes. If you switch from WFH to office, get an EV, or add solar, your optimal rate plan changes. Review annually.

    Solar + TOU: The Optimal Pairing

    If you have solar panels, TOU rates become more interesting.

    Without Battery:

    • Solar generates during the day (off-peak)
    • You export at off-peak rates ($0.08-0.12/kWh)
    • You import at peak rates ($0.35-0.50/kWh)
    • Net result: Often negative. TOU without a battery can hurt solar customers.

    With Battery:

    • Solar charges the battery during the day
    • Battery discharges during peak evening hours
    • You avoid buying expensive peak power
    • Net result: Batteries pay for themselves faster on TOU plans.

    The Arbitrage Math

    A 10 kWh battery can store power worth ~$0.10/kWh (off-peak) and use it when power costs ~$0.40/kWh (peak).

    Daily savings: 10 kWh × ($0.40 - $0.10) = $3.00
    Monthly savings: ~$90
    Annual savings: ~$1,000+ on aggressive TOU plans

    This is why TOU rates accelerate battery ROI dramatically.

    How to Switch to TOU

    Step 1: Request Rate Comparison

    Call your utility or check online for a "rate comparison" tool. Many utilities will model your historical usage on different rate plans.

    Step 2: Start with a Trial

    Some utilities let you try TOU for a few months and switch back. Take advantage of this to validate your real-world savings.

    Step 3: Install Monitoring

    Get an energy monitor (Sense, Emporia Vue) to see real-time usage. Knowing what's drawing power during peak helps you optimize.

    Step 4: Automate What You Can

    Schedule EV charging, adjust thermostat programs, set timers. Manual shifting is exhausting; automation makes it sustainable.

    Step 5: Lock It In—But Review Annually

    Once you're confident TOU is right, commit. But set a calendar reminder to review your rate plan every year. Utilities change rates, and your life changes too.

    The Bottom Line

    Time-of-Use rates aren't for everyone. But for households willing to shift loads—especially EV owners, solar+battery customers, and those with flexible schedules—TOU can save $300-600 annually with minor lifestyle adjustments.

    The grid is begging you to use less power at 6 PM. It's willing to pay you to comply. The only question is whether you'll take the deal.

    References & Citations

    About the Expert

    M

    Marcus Vance

    Senior Systems Engineer & Efficiency Specialist
    BSME (University of Michigan)Professional Engineer (PE) LicenseASHRAE Certified Member
    SPECIALTY: HVAC, Thermodynamics & Industrial Efficiency

    Marcus Vance is a leading authority in thermal dynamics and electromechanical system efficiency. With over 15 years in industrial systems design and a specialized focus on residential HVAC optimization, Marcus is dedicated to debunking common energy myths with rigorous, data-driven analysis. His work has been cited in numerous green-tech publications and he frequently consults for municipal energy efficiency programs.

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