TOU, meaning “Time of Use rates,” is a metering plan that charges customers for the energy they use at a particular time of the day. Customers pay more to use during peak hours while less during non-peak hours. This is important for providers and customers for multiple reasons: reduced bills, decreased reliance on the electrical grid, and smart scheduling of electricity usage.
One of the best ways to reduce peak-hour electricity usage is to invest in a Jackery Solar Generator to power most of your household appliances. This generator combines a portable power station and solar panels to convert the sun’s rays into usable electricity and minimize your reliance on the electrical grid during peak hours.
Key Takeaways
Here are a few essential facts about the time of use rate:
- The rates vary considerably from season to season.
- A TOU rate is different from a standard electrical rate and, in some cases, costs much less than the latter.
- Opting for the pricing structure is beneficial for consumers in terms of saving costs, taking control of energy use, and achieving environmental benefits, as well as for providers.
- Summer is the costliest time of the year in terms of electricity bills
- There are multiple ways to save with TOU rates, especially if you invest in solar power.
TOU Meaning: What Is the Time of Use Rate?
Utilities across the country have different rate structures for their residential customers, intending to provide them with more saving opportunities. And the most popular amongst all is their time-of-use (TOU) rate. So, to answer the question, what does TOU mean, it’s a kind of electricity billing arrangement by the utilities where the prices change based on the time of day. For example, the rates are typically cheapest at night while most expensive during the day, while the rates differ on weekdays and weekends.
The companies classify these times as peak and off-peak hours.
Peak Hours: During peak electricity hours, or, as mentioned, during the daytime (5 pm-9 pm), electricity consumption is at its peak, hence high electricity prices. During this time, users typically come from work and use electricity to do chores, cool down by turning on the air conditioner, make dinner, and watch television.
Off-Peak Hours: Off-peak electricity hours, on the other hand, are when the demand is low and typically include early in the morning or midnight when most people are asleep. In this way, TOU encourages customers to consume electricity during off-peak hours, which reduces strain on the electric grid and prevents potential blackouts.
Now the question is, how different is it from standard rates? Most people opt for a standard electric bill, which adds up to total kilowatt-hours of usage in a month; for example, if the average rate is 47.63¢ per kWh and you consume around 1000 kWh of energy in a month, your bill stands at $476.
On the other hand, with a time-of-use rate, you’re billed with different amounts based on usage at different times of day.
How Does A Time of Use Rate Work?
Time-of-use rates are fairly straightforward: A utility charges you for the electricity you consume at a specific time in the day. As mentioned earlier, these rates are high during peak hours and low during off-peak hours.
For example, a company charges 63¢ per kWh during peak hours while 35¢ per kWh during off-peak hours. And you consumed around 400 kWh and 600 kWh per month during peak and off-peak hours, respectively. The calculation is as follows: 400 * $0.63 +600 * $0.35= $462.
Note: The TOU rates vary from one utility to another. For example, the peak and off-peak hours rate for SDG&E is 63.67¢ per kWh and 41.34¢ per kWh, respectively. While respective rates for PG&E are 62¢ per kWh and 53¢ per kWh. Even the rates might vary with seasons, i.e., average rates are typically higher in summers than winters. And although the time of use rate seems a good decision, things can go sideways if you don’t smartly consume the electricity.
Now, a solar panel can be a massive help in this respect. The battery can charge up when the solar energy is plentiful during the day or off-peak hours. Then, as the sun goes down, you can use the available charge to power up your home during peak hours and cut down a chunk of your electric bills.
Why Time of Use Rate Necessary?
Time of use rates are important for the residents in the following manner:
- Cost Savings: As mentioned beforehand, the primary aim of the time-of-use plan is cost saving, and with differing rates for different times of day, residents have the opportunity to manage their electricity usage and cut down their electricity bill. For example, you can run most of your appliances during off-peak hours when rates are the lowest.
- Taking Control of Energy Use: By adopting TOU rates, consumers stay aware of their consumption patterns and decide when to use energy-hogging appliances. This encourages them to invest more in energy-efficient appliances and consume energy more responsibly.
- Environmental Benefits: When residents use more electricity during off-peak hours, it puts less load on peaker plants, which are typically less efficient and generate more pollutants than standard ones. The shift from a traditional to a time-of-use plan potentially minimizes the emission of such harmful pollutants and contributes towards a cleaner environment.
Aside from the residents, adopting TOU is beneficial for utilities in many respects, which are as follows:
- Grid Efficiency: With the application of TOU rates, more people tend to be involved in smart electricity consumption or sway away from using heavy appliances during peak hours. Thereby, electricity grids are not under the stress of fulfilling heavy electricity demand during peak hours and don’t run into the risk of failing and blackouts. Besides, there’s no need for the utilities to invest in additional infrastructure to maintain the demand curve.
- Encouraging Use of Renewable Energy: TOU rates have the potential to encourage the adoption of renewable energy sources. For example, you can charge your solar batteries throughout the day and discharge the power when the sun goes out. This reduces reliance on traditional grids, making them cleaner and more stable.
- Encouraging Adoption of Technology: With time-of-use rates, there’s a possibility of increasing technology adoption. For example, smart thermostats learn your energy usage schedule and integrate with other smart appliances to increase efficiency. Also, consumers will be encouraged to invest more in ENERGY STAR-certified appliances and energy monitors to monitor their usage.
- Regulatory Compliance: The regulatory bodies across the country are pushing towards more sustainable and efficient energy practices and, in turn, increased adoption of solar energy. As mentioned earlier, TOU encourages more renewable energy integration and lets utilities comply with the agencies.
What Is The Cheapest Time of Day to Use Electricity?
Energy is typically the cheapest at night or early morning, irrespective of where you live or the time of the year. But the exact timing depends on multiple factors: the energy provider you opt for, the off-peak period they set, and your location. Not only that, electricity rates vary from one season to another. The rates are higher during summer than winter as people mainly use energy-hogging appliances like air conditioners, freezers, and ceiling fans.
For example, SDG&E offers the same rate from 4-9 pm (63.67 ¢ per kWh) and 6 am – 4 pm & 9 pm-midnight (41.34 ¢ per kWh) during on and off-peak hours in summer. While during winter, the rates for respective time slots are 43.55 ¢ per kWh and 38.89 ¢ per kWh, respectively. The time range and rates differ much for PG&E customers.
That’s not it. You also might notice changes in the rates on holidays. As most businesses are shut down during major holidays like Christmas, New Year’s, Thanksgiving, Labor, and Memorial Day, and the demand isn’t very high, you can expect some discount in cents per kWh rates.
How to Save Money with TOU Rates?
To maximize your savings with the TOU rates, you must take a strategic energy consumption approach. Here are a few tips to help you with it:
Understand the TOU Structure: The first thing in your savings journey is to understand the TOU rates offered by your energy provider. Time and rates potentially vary from one provider to another, so take a look at their detailed pricing tiers and the designated on-peak, off-peak, and super off-peak hours.
Shift Your Energy Usage: Now that you’re well-versed in the provider's pricing structure, it’s time to create a smart schedule for your energy usage. In simple words, shift the tasks that involve the use of energy-consuming appliances, such as heating or cooling appliances, washing clothes, and charging electric vehicles, primarily during off-peak and even super off-peak hours.
Optimize Lighting: Make a switch to energy-efficient LED bulbs and install motion sensors or timers to control the lighting usage. In this way, you ensure that lights stay on only when needed and potentially cut down energy usage during peak hours. Not only lights, invest in 5-star rated energy appliances that consume up to 30% less energy than traditional ones, in turn saving on electricity bills.
Monitoring Energy Usage: You can also choose to monitor your energy consumption patterns by investing in curated mobile apps or online tools provided by utilities. This way, you can take note of the areas that need adjusting and make changes accordingly.
Aside from these, there are some general guidelines to reduce your electric bills, irrespective of the plans you’ve opted for, which are as follows:
Reduce Energy Consumption: In this step, it’s important to tweak your personal energy usage habits, like turning the lights/fans off when you leave the room or when there’s ample natural light available.
Air conditioners, freezers, and other similar appliances single-handedly soar your electric bills during summer. You can’t cut it off completely, but what you can do is keep the temperature to 25℃ and use a ceiling or portable fans to cool yourself. The temperature can be kept even higher when you leave your dwelling for several hours. Or install a smart thermostat to control energy consumption according to your set schedule.
Switch Energy Providers: As mentioned, different providers charge different rates from their customers, so aside from changing your energy usage pattern, try switching to a provider that offers lower rates per kWh. You can visit the online communities and try asking what the best and cheapest utility provider is or consult your neighbors in this respect.
Irrespective of the provider, be smart with the plan you subscribe to. If you're confident enough, always consider simple fixed-rate plans or TOU plans, and avoid gimmicks like free nights, free weekends, or bill credits. These plans might seem alluring, but you might end up paying more.
Go Solar and Save: Be it a fixed-rate or time-of-use plan, switching to solar energy potentially removes a chunk from your electricity bills. With the installation of solar panels, you’re generating electricity at home and potentially minimizing dependence on the electric grid. This is especially beneficial during the daytime when the sun is at its peak to charge your battery to full, which you can use later to run even heavy appliances like air conditioners, freezers, etc.
Now, Jackery Solar Generators are probably one of the best ones in the space. Its offerings, like Jackery Solar Generator 3000 Pro, can charge 99% of your appliances during power outages and other emergencies.
Jackery Solar Generators to Save Money
Jackery Solar Generators with Jackery SolarSaga Solar Panels and Jackery Explorer Portable Power Stations collect, convert, and supply electricity produced from the sun’s rays to power basic and high-end home electrical appliances. The rays fall on solar panels, which get converted to DC electricity and are passed onto a pure sine wave inverter that further converts it to usable AC electricity.
It can be a great asset to pair up with your time-of-use plan, where you can charge it fully during the daytime or off-peak hours and discharge it during the peak hours. In other words, you take power from the electrical grid mainly during off-peak hours and thereby will notice a major drop in electric bills.
Jackery Solar Generator 3000 Pro
Jackery Solar Generators come in multiple sizes, and its Jackery Solar Generator 3000 Pro is one of the highest-capacity generators available. And going by the size, it can charge up to 99% of your home-based electrical appliances for hours. The home battery backup boasts a portable design with double wheels and pull roads, so shifting to a new area with it won’t be a problem at all, and you can charge appliances on the go. Besides, it’s one of the safest products and can even charge heavy-duty appliances during peak hours.
Here are some common household appliances and their average runtime:
- Window AC (1800W): 1.4H
- Refrigerators (1000W): 2.5H
- Sump Pump (800W): 3.2H
- Dishwasher (250W): 10H
- Microwave (1300W): 1.9H
Customer Review
“This Generator is a game changer. The battery lasts for hours. Solar panels work great and can be used ANYWHERE.”- Kenney Barrett.
Jackery Solar Generator 2000 Plus
Jackery Solar Generator 2000 Plus is another home battery backup with a large capacity and can be charged with a wall outlet, car battery, and 6*Jackery SolarSaga 200W Solar Panels in a few hours. Aside from its safety feature, its LiFePO4 battery can be expanded from 2kWh to 24kWh with an additional Jackery Battery Pack 2000 Plus. It is a great one to pair with your TOU plan, as it can power up heavy-duty appliances up to 6000W, so you can go by the peak hours without obtaining a single kWh from electrical grids. Moreover, expanding its battery capacity can power up your home appliances for up to 2 weeks.
Here are some common household appliances and their average runtime:
- Window AC (1800W): 58 min
- Refrigerators (1000W): 1.7H
- Sump Pump (800W): 2.1H
- Dishwasher (250W): 7H
- Microwave (1300W): 1.3H
Customer Review
“Very good quality, battery lasts a very long time. Very easy to move around with the built-in tires. Love the upgradeability. The best solar generator I have ever had.”- Marc
Jackery Solar Generator 2000 Plus Kit (4kWh)
Jackery Solar Generator 2000 Plus Kit (4kWh) is another with a high-capacity battery and can power 99% of your home appliances for hours. It's a portable solar battery backup for your homes and a great companion to cut down your reliance on electrical grids during peak hours, which, in turn, saves a lot on electric bills. And for tiny homes, apartments, and condos, a single charge might last for a week.
Here are some common household appliances and their average runtime:
- Window AC (1800W): 1.9H
- Refrigerators (1000W): 3.4H
- Sump Pump (800W): 4.3H
- Dishwasher (250W): 13.9H
- Microwave (1300W): 2.6H
Customer Review
"I like this thing. It's got a lot of power. It powered my air conditioner on high. It powered power tools. It's really not that heavy. It doesn't take too long to charge. And I'll be buying everything to expand the whole system eventually." — Michael Wheeler.
What Are Misconceptions About TOU Rates?
Although TOU rates seem like a fair deal and provide multiple opportunities to save on electric bills, people have multiple misconceptions about these. Some of them are as follows:
Misconception 1: TOU Rates Are More Expensive
One common misconception among consumers is that time-of-use rates are always more expensive than standard rates. Although electricity is expensive during peak hours, it's much cheaper during off-peak hours. So, if you schedule your electricity usage smartly, you can probably save a lot on your bills.
Misconception 2: TOU Rates Only Benefits Businesses
Many believe that businesses with higher electricity consumption are benefitted from TOU rates. But that’s not entirely true. Although businesses can take advantage of these, residents can exploit these and save a chunk by shifting their energy usage to off-peak hours.
Misconception 3: TOU Rates Are Too Complicated To Understand
There’s also a common belief that TOU rates are complicated to understand and manage. It might take some planning with respect to altering your energy usage patterns, investing in appliances, and others, but they aren’t overly complex. Many providers have resources and tools to understand it, so all that’s needed is a little bit of an effort.
Misconception 4: TOU Rates Availability is Limited
With providers increasingly promoting their TOU plans, its popularity is on the rise, and it is available in multiple regions nowadays. It’s important that you check with your local provider to see if such is available in your area and if it is beneficial for you.
Time of Use Rate FAQs
What size of solar generator do I need for my house?
The size of a solar generator for a typical home depends on the type of appliances you plug into it simultaneously. Typically, a 2000-watt generator is an ideal choice for most homes.
Let’s understand it by an example:
Suppose you’re running a TV (100W), a freezer (200W), and a sump pump (800W) at the same time with Jackery Solar Generator 2000 Plus. So, the working time will be:
Working Time = Battery Capacity * 0.85 / Wattage Consumption of Appliances = 2042.8 * 0.85/1100 = 1.86H
Note: Here, we’ve multiplied the battery capacity by 0.85 to denote some power loss when charging appliances.
What is the cheapest time of day to use electricity?
If you’re enrolled in a time-of-use plan, late night or early morning is typically the cheapest time of day to use electricity.
What is a tou meter?
A TOU meter or smart meter is a device that separates energy rates based on energy consumption time. It helps customers control their electricity bills and helps providers manage demand during peak hours.
What is the most expensive time to use electricity?
As per the TOU plan, evening or peak hours are the most expensive time to use electricity.
Is the time-of-use rate worth it?
Yes, it's definitely worth it if you can adjust your usage pattern according to the rate slab.
Final Thoughts
Investing in the right appliances and adjusting your energy usage patterns by understanding the right TOU meaning is the best way to cut down your electricity bills. Investing in solar-powered home battery backups like Jackery Solar Generator 3000 Pro and Jackery Solar Generator 2000 Plus, which have large battery capacities during peak hours, stays on top of the list. You can rely on them to power up most of your home appliances and save on average bills.
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