Peak and off-peak electricity: Cheapest time to use energy

Most homeowners know the basics of conserving energy – turn off lights when not in use, install efficient appliances, and keep the thermostat at reasonable temperatures. But fewer understand that smart energy usage isn't just about how much power you use – it's about when you use.

Time-of-use pricing: What it is and how it works

Time-of-use or TOU pricing is a rate structure where electricity costs change depending on the time of day, day of the week, and season. Under TOU plans, your utility company divides the day into different time periods and charges different rates for each. 

Peak hours represent the most expensive periods when demand for electricity is highest. Off-peak hours are the cheapest periods when demand is lowest. Many utilities also include mid-peak or shoulder hours, which are periods with moderate demand and intermediate prices.

Instead of paying a flat rate for every kilowatt-hour you use, you'll pay premium rates during high-demand hours and enjoy discounted rates during low-demand periods. This pricing structure encourages consumers to shift their usage to times when the electrical grid is under less stress.

Peak vs. off-peak hours: Time is money

The difference between peak and off-peak rates is huge. In many regions, peak rates can be 2-3 times higher than off-peak rates. Peak rates often range from $0.30 to $0.50 per kWh, while off-peak rates typically fall between $0.10 and $0.20 per kWh.

For a household that consumes 30 kWh daily, shifting just half of your usage from peak to off-peak periods could save $1,000+ annually. For energy-intensive homes with EVs, pools, or larger square footage, savings can be even greater.

When electricity is cheapest

Peak hours occur when most people are active and using electricity simultaneously. For most regions across the United States, weekday peak hours fall between 4 PM and 9 PM – when people return home from work, cook dinner, and use entertainment devices. Off-peak hours generally include overnight periods from 9 PM to 6 AM when most households are sleeping and weekend hours when commercial demand drops. Some utilities also designate "super off-peak" hours in the early morning from 2 AM to 6 AM with the absolute lowest rates available.

Summer vs. Winter

TOU rates don't just vary by time of day – they also change with the seasons. During summer months, peak hours occur in late afternoon and early evening when air conditioning demand soars. In winter, some regions have morning and evening peak periods of 7-9 AM and 5-8 PM when heating and lighting demands increase. Spring and fall serve as shoulder seasons that often have less dramatic price differences and shorter peak periods. The most significant price differences usually occur during extreme weather seasons when grid demand reaches its highest points.

Weekends vs. Weekdays

Read also

Passive solar: How to use sun’s energy without solar panels

Good news for weekend warriors: Many utilities offer reduced rates or eliminate peak pricing entirely on weekends and holidays. This makes Saturday and Sunday ideal times for energy-intensive activities. You can run multiple loads of laundry, charge electric vehicles, deep clean with energy-intensive appliances, and tackle batch cooking or meal prep with electric ovens – all without worrying about premium rates.

Quick wins: Three changes you can make today

These simple changes require no investment and can be implemented immediately. Together, they could reduce your monthly electricity bill by 15-25% without any reduction in comfort or convenience. Once you establish these new habits, they'll become second nature while continually generating savings. 

#1 Shift your major appliance usage

Most modern appliances come with delay start features specifically designed for TOU rate plans. For washers and dryers, try running loads before bed or setting them to finish when you wake up. With dishwashers, load them after dinner but set them to run after 9 PM when rates drop. 

Read also

How many watts does a washing machine use? Clean data

Even without smart features, you can manually time these activities – for example, start your laundry right before bedtime instead of immediately after dinner. A family of four typically runs 5-8 loads of laundry and 4-7 dishwasher cycles weekly, so shifting these alone can save $15-25 monthly.

#2 Adjust your thermostat settings

Heating and cooling account for nearly half of home energy use, making your HVAC system a prime target for TOU optimization. In summer, cool your home 2-3 degrees lower than your usual setting during the afternoon before peak hours start. Then switch your thermostat up by 2-4 degrees during peak hours – you'll hardly notice the difference as your home retains its coolness. In winter, warm your home in the morning and let the natural heat retention carry you through early evening peak hours. 

Read also

How much energy does a heat pump use? Pumping down the costs

Even manual adjustments made consistently can reduce your HVAC costs during peak periods by 20-30%, which amounts to roughly $30-50 monthly for the average household. Programmable thermostats can automatically adjust temperatures based on your utility's TOU schedule. 

#3 Charge electronics and EVs overnight

Finally, make it a habit to charge electronics and EVs overnight during the cheapest rate periods instead of plugging them in immediately after use. Electric vehicles represent one of the largest electricity draws in modern homes, but also one of the easiest to shift to off-peak hours. Most EVs and charging stations allow you to program charging times, making it simple to ensure your vehicle only draws power when rates are lowest. 

Read also

How many watts does an electric car charger use? Quick look into EV charging

A single EV charged exclusively during off-peak versus peak hours can save $40-80 monthly. Shifting all household electronics to overnight charging typically saves an additional $10-15.

Long run: Efficiency as lifestyle

For sustained savings, develop a comprehensive approach to energy management in your home that addresses both when and how you use electricity. This systematic approach yields greater benefits than individual tactics alone, often reducing total electricity costs by 40-60% while simultaneously increasing home value and energy resilience.

#1 Audit your energy usage

Read also

Check yourself: How to perform DIY home energy audit

Start with identifying your biggest consumption categories to focus your efforts where they'll have the most impact. Many utility companies offer professional energy audits for free or at reduced costs, providing thermal imaging to detect air leaks and detailed appliance-by-appliance analysis. Once you've identified your top energy consumers, you can develop targeted strategies for each. This focused approach ensures you're investing your time and money where they'll generate the greatest returns.

#2 Invest in smart thermostats that respond to rate changes

Read also

How many watts does an electric furnace use? It’s a bottomless pit

Advanced smart thermostats can now integrate directly with utility TOU schedules, creating automated savings with minimal effort on your part. These devices automatically pre-cool homes before peak periods begin and adjust temperatures during high-rate hours to minimize expensive energy usage. Many models also learn occupancy patterns to maximize both comfort and savings while providing detailed energy usage reports and savings estimates to help you track your progress.

#3 Consider buying home energy management systems

Read also

Smart electrical panels: Energy management in your home

Comprehensive energy management systems take automation to the next level by coordinating multiple devices based on real-time electricity pricing. These sophisticated systems automatically shift flexible loads to optimal times and integrate seamlessly with solar and battery systems for maximum efficiency. Many also provide detailed analytics on energy consumption patterns, helping you identify additional savings opportunities you might otherwise miss. While these systems require initial investment, they pay for themselves within 1-2 years through enhanced savings and continue delivering value throughout their operational life.

#4 Opt for simple tech solutions

Read also

How much energy does a boiler use: Budget drain

Not ready for a full smart home system? You can still achieve meaningful savings with more affordable options. Smart plugs can automate smaller devices throughout your home. Timer switches offer an easy way to control water heaters and other fixed appliances based on TOU schedules. Mobile apps from many utilities now provide rate alerts and usage tracking to keep you informed about the best times to use electricity. For immediate feedback, simple power monitors can display real-time consumption data to help you make on-the-spot decisions about energy usage.

#5 Replace aging appliances 

Read also

How many watts does a refrigerator use? Cold numbers

When your existing appliances approach the end of their useful life, prioritize replacements with both Energy Star ratings and smart features. Modern refrigerators use 40-60% less energy than models from the early 2000s, while high-efficiency washing machines use 25% less electricity and 33% less water than standard models. Look specifically for appliances with delay start and smart home integration capabilities, allowing them to automatically operate during off-peak hours. 

#6 Upgrade insulation and windows 

Read also

How to make home energy efficient, save money and help the planet

Start in the attic, where improving insulation can reduce heating/cooling costs by 15-25%. Wall insulation improvements can reduce energy losses by another 10-20%. For windows, replacing single-pane with double or triple-pane Energy Star models reduces heat transfer by 30-50%. Focus first on south and west-facing windows that receive the most direct sunlight. These improvements work by creating thermal mass that maintains comfortable temperatures without constant energy input, allowing you to "coast" through peak rate periods without running HVAC systems at full capacity.

#7 Consider solar + storage 

Solar production peaks in the middle of the day from 10 AM to 2 PM, while electricity rates often peak later from 4 PM to 9 PM. This misalignment creates both challenges and opportunities. Without storage, this means you're selling power at lower rates and buying it back at premium prices – a situation that calls for strategic management.

Read also

Take my energy: What is net metering and how it works

Residential battery systems transform the equation by giving you unprecedented control over your energy usage patterns. These systems allow you to store excess solar production during midday hours and discharge that stored energy during expensive peak periods. While the upfront investment is substantial, the combined solar+storage approach can eliminate 80-95% of peak-hour electricity purchases and provide energy security during outages. 

Some utilities offer favorable net metering policies that credit you at the prevailing rate when you export solar power to the grid. In these scenarios, you're financially incentivized to export power during peak periods when electricity is most valuable. By carefully timing your household consumption to use less electricity during these high-value export windows, you can maximize the financial return on your solar investment. 

Start saving money with solar panels!

Check what solar panels we have in stock or get a quote for a system from our engineer.

Shop solar panels

Julia Zaraeva

Author

Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.

More articles from this author