Time-of-Use Rates Explained: How to Maximize Solar Savings

If your utility charges time-of-use (TOU) rates, when you use electricity matters as much as how much you use. Here's how to maximize savings with solar.

What Are Time-of-Use Rates?

Time-of-use pricing means your electricity rate varies by time of day:

• Peak hours (4–9 PM typically): Highest rate ($0.25–$0.45/kWh)
• Off-peak (10 PM – 3 PM): Lowest rate ($0.08–$0.15/kWh)
• Mid-peak (3–4 PM, 9–10 PM): Moderate rate ($0.15–$0.25/kWh)

TOU rates reflect the actual cost of electricity on the grid — demand (and prices) spike in the evening when people come home and turn on AC, TVs, and appliances.

States With TOU Rates

TOU rates are common in:

• California (PG&E, SCE, SDG&E — mandatory for solar customers)
• Arizona (APS, SRP)
• Nevada (NV Energy)
• New York (ConEd, some plans)
• Massachusetts (some plans)

How TOU Affects Solar Savings

Without Solar

You pay the highest rate during peak hours — exactly when families use the most electricity (cooking dinner, watching TV, running AC).

With Solar (Grid-Tied)

Your solar produces energy during the day (off-peak/mid-peak), reducing your electricity purchase at lower rates. But you still buy peak-hour electricity at the highest rate.

With Solar + Battery

The battery stores daytime solar production and powers your home during expensive peak hours. This is the most effective way to save with TOU rates:

1. Daytime: Solar powers your home + charges the battery
2. Peak evening (4–9 PM): Battery powers your home (avoiding peak rates)
3. Night: Pull from grid at off-peak rates

This strategy can reduce your electricity costs by 70–90%.

California NEM 3.0 Makes Batteries Essential

Under California's NEM 3.0, solar exports are credited at very low rates ($0.08–$0.12/kWh) compared to retail rates ($0.25–$0.40/kWh). This means:

• Without a battery: You export cheap solar and buy expensive peak power
• With a battery: You store your own solar and avoid buying peak power

A battery can double your savings under NEM 3.0 compared to solar-only.

Strategies to Maximize TOU Savings

1. Shift Energy Use to Off-Peak

• Run the dishwasher at 10 PM
• Charge your EV overnight
• Do laundry on weekends (if weekend rates are lower)
• Pre-cool your home before peak hours

2. Install a Battery

• Size it to cover your peak-hour usage (typically 10–15 kWh)
• Set it to charge from solar during the day and discharge during peak
• Even a single battery can cover essential loads during peak hours

3. Maximize Solar Production

• Ensure panels are oriented to produce during peak hours (west-facing panels are better than south-facing for TOU)
• Keep panels clean
• Monitor production regularly

4. Consider an EV

• Charge your EV overnight at off-peak rates ($0.08–$0.12/kWh)
• If you have solar + battery, charge during the day from solar
• Compare with our EV Charging Cost Calculator

Calculating Your TOU Savings

Your actual savings depend on:

• Your utility's TOU rate structure
• Your daily usage pattern
• Your solar system size and orientation
• Whether you have a battery

Use our Solar Savings Calculator for a baseline estimate, then run our free AI Home Energy Advisor for a personalized analysis that factors in your utility's TOU rates.

The Bottom Line

If your utility offers TOU rates, a solar + battery system is almost always the best investment. The battery lets you avoid the most expensive electricity by using your own stored solar energy during peak hours — potentially doubling your savings compared to solar alone.