Key takeaways
- Time-of-use rates charge more per kWh during peak hours — often late afternoon and early evening — and less at other times.
- Most California utility customers are on TOU plans with a 4–9 pm peak; several utilities elsewhere have adopted TOU defaults too.
- Shifting dishwashers, laundry, EV charging and pre-cooling out of the peak is the biggest free win.
- Under TOU, west-facing solar and small batteries can be worth more than their raw kWh suggest.
- Your bill and your utility's rate page tell you your exact plan and hours — check before changing anything.
On a flat electricity rate, a kilowatt-hour costs the same at 3 am and 6 pm. On a time-of-use (TOU) rate, it doesn't. Understanding which plan you're on — and when your expensive hours are — is one of the easiest ways to cut your bill without using less overall.
How time-of-use works
Utilities pay more for electricity when demand is highest, typically on hot late afternoons and early evenings when people come home, turn on air conditioning and cook — just as solar output across the grid fades. TOU rates pass that pattern on to customers:
- Peak hours: the most expensive price.
- Off-peak hours: cheaper, often overnight and midday.
- Some plans add a super off-peak window or a mid-peak shoulder.
- Prices and hours often differ between summer and winter, and sometimes between weekdays and weekends.
Who's on TOU?
- California: the large investor-owned utilities (PG&E, SCE, SDG&E) moved most residential customers to TOU plans by default, typically with a 4–9 pm peak every day.
- Elsewhere: a growing number of utilities offer TOU plans, and some have made them the default — for example, several Michigan and Arizona utilities use late-afternoon/early-evening weekday peaks.
- Everyone else: many utilities offer TOU as an option. It may save you money if your usage pattern fits.
Your bill names your rate plan. Search your utility's site for that plan name to see its exact hours and prices.
How to read your TOU plan
Look for four things:
- Peak hours — the window to avoid.
- Peak vs. off-peak price — the bigger the gap, the more shifting pays.
- Seasons — summer peaks are usually pricier.
- Weekends and holidays — some plans have no peak on weekends.
Free ways to beat TOU
Shift the big, flexible loads
- Dishwasher: delay-start to after the peak or run it midday.
- Laundry: wash and dry outside peak hours.
- EV charging: schedule overnight or during super off-peak windows.
- Water heater: if it's electric with a timer or smart controls, heat outside the peak.
Pre-cool (or pre-heat)
Cool your home a few degrees more before the peak starts, then let the thermostat drift up during it. A smart thermostat can automate this.
Avoid peak-time cooking
Use the oven earlier, or switch to microwaves, slow cookers and air fryers in peak hours.
Watch the always-on loads
Phantom loads run through the peak too. Smart plugs that cut entertainment centers and office gear when not in use help around the clock.
Solar under TOU
Under TOU, when solar produces matters as much as how much.
- South-facing panels produce the most energy, peaking around midday — often during cheaper hours.
- West-facing panels produce less in total but more in the late afternoon, overlapping the expensive peak. On many California plans, a west-facing plug-in kit can save as much or more money than a south-facing one. See best direction and angle.
- A small battery stores cheap midday solar and releases it in the evening peak — the scenario where plug-in batteries make the most financial sense. Read plug-in solar with a battery.
Should you switch to (or away from) TOU?
Many utilities offer a free rate comparison tool that uses your actual hourly data from your smart meter. Run it before switching. As a rule of thumb:
- TOU tends to help households that are out in the late afternoon, have flexible loads, charge an EV overnight or have solar.
- TOU tends to hurt households that run lots of air conditioning, cooking and laundry during peak hours and can't shift them.
The bottom line
TOU rewards timing. Find your peak hours, move flexible loads out of them, pre-cool before the peak and — if plug-in solar is legal where you live — consider orienting panels west or adding a small battery. For more ways to save, see how to lower your electric bill.
Frequently asked questions
What are typical time-of-use peak hours?
They vary by utility and season. Many California plans have a 4–9 pm peak every day; some utilities elsewhere use windows such as 3–7 pm or 4–7 pm on weekdays. Your bill or your utility's rate page lists your plan's exact hours.
Is time-of-use cheaper than a flat rate?
It can be if you use relatively little power during peak hours or can shift usage. Households that run air conditioning, cooking and laundry in the late afternoon and evening may pay more. Many utilities offer an online rate comparison based on your actual usage.
Does solar help on a time-of-use plan?
Yes, especially production that overlaps the peak. South-facing panels produce most at midday; west-facing panels shift output into the late afternoon. A small battery can move midday solar into the evening peak.