Time-of-Use Electricity Plans Explained

What is time-of-use pricing?

With a standard flat-rate plan, you pay the same price per kilowatt-hour no matter when you use electricity. Time-of-use pricing changes that. Utilities divide the day into pricing periods based on demand on the grid: electricity costs more during peak hours when everyone is home and using power, and less during off-peak hours when demand is low.

Peak periods are typically in the late afternoon and evening, when people return home, run appliances, and cool or heat their homes. Off-peak periods cover overnight hours and early mornings. Some utilities also define a shoulder period in between, priced somewhere in the middle. Use our Bill Breakdown Calculator to understand your current rate structure and see how much of your bill is driven by the hours you use the most power.

How peak, off-peak, and shoulder rates work

Rate differentials vary by utility, but peak rates are often two to three times higher than off-peak rates. In some high-demand markets during summer months, the gap is even wider. Seasonal variation is common: many utilities have separate summer and winter TOU schedules because air conditioning shifts when peak demand occurs.

To find your utility's exact TOU schedule, log into your online account, look for a rate comparison tool, or search your utility's name alongside “time-of-use rate schedule.” Most utilities publish their tariff tables publicly. Typical pricing windows look like this:

• Peak: 4 pm to 9 pm on weekdays (highest rate, often 2-3x off-peak)
• Shoulder: 9 am to 4 pm and 9 pm to midnight (mid-range rate)
• Off-peak: Midnight to 9 am and all day on weekends (lowest rate)

Who benefits most from TOU plans

TOU pricing rewards households that can shift their high-energy activities away from peak windows. If your lifestyle or equipment gives you that flexibility, the savings can be substantial.

• EV owners: Charging overnight during off-peak hours can cut charging costs by 50% or more compared to peak rates
• Solar owners with battery storage: Store solar energy during the day and discharge during peak hours to avoid high rates entirely
• Work-from-home households: Running errands or doing chores during off-peak hours is easier when your schedule is flexible
• Smart appliance owners: Programmable thermostats, smart water heaters, and connected washers can automatically shift usage to off-peak windows

EV owners especially stand to gain. See how much you could save by charging off-peak with our EV Charging Calculator.

How to shift your usage

Shifting usage does not have to mean sacrificing convenience. Most of the highest-impact changes involve setting a timer or adjusting a schedule once, then letting automation handle the rest.

• Run your dishwasher and laundry after 9 pm or set a delay start for early morning
• Pre-cool or pre-heat your home before the peak window starts so your HVAC barely runs during expensive hours
• Set your EV charger to start after midnight and finish before your morning commute
• Put your electric water heater on a timer to heat water overnight rather than on demand during the day
• Batch high-energy cooking tasks on weekends when off-peak rates typically apply all day

Curious how much individual appliances cost to run at different times of day? The Appliance Cost Calculator lets you model the exact cost difference between running an appliance at peak versus off-peak rates.

TOU vs flat-rate: which saves more?

TOU is not a universal win. For some households, a flat-rate plan is actually cheaper. The right answer depends entirely on when you use electricity and how much flexibility you have.

A flat-rate plan tends to be better when your household has high, unavoidable peak-hour usage. If you work shifts that mean cooking, laundry, and TV all happen between 5 pm and 9 pm every night and you cannot change that, the premium TOU peak rates will cost you more than a flat rate would.

TOU wins when you have genuine flexibility: an EV you charge overnight, solar with a battery that dispatches during peak hours, or a household that is largely empty during peak windows. The more of your heavy consumption you can push to off-peak, the larger your savings. Use our TOU Savings Calculator to model your specific situation before calling your utility to switch plans.