Time-of-use electricity rates
Last updated 2026-10-21
On a time-of-use (TOU) plan, each kWh costs more during a few peak hours and less the rest of the day. Whether you save depends on how much of your use you can move out of the peak window.
1. Plan types
| Plan | How you are billed | Best for | Risk |
|---|---|---|---|
| Time-of-use (TOU) | Fixed peak and off-peak prices by hour, every day. Some add a mid-peak tier. | Homes that can move laundry, dishes, pool pumps and cooling | Medium |
| EV / super off-peak | TOU with a very cheap overnight window (often midnight to 6 a.m.) | EV owners, battery owners | Medium; peak is often very high |
| Critical peak pricing (CPP) | Normal or discounted rate, plus a very high price on 10 to 20 event days a year | Homes that can go nearly dark during events | High on event days |
| Peak-time rebate (PTR) | Normal rate; bill credit per kWh reduced during events | Everyone | None |
| Demand rate | Lower per-kWh price plus a charge per kW of your highest draw (often during peak hours) | Homes that never run big loads together | High; one hot afternoon sets the month |
| Real-time pricing | Price changes hourly with the wholesale market | Automated homes, batteries | High in price spikes |
Some utilities, including the large California utilities, Xcel Energy in Colorado and DTE and Consumers Energy in Michigan, now put most residential customers on TOU by default. Elsewhere it is opt-in.
2. Typical peak windows
- Summer-peaking utilities (most of the U.S.): weekdays 4 to 9 p.m., 3 to 8 p.m. or 5 to 8 p.m., when AC load is highest and solar output falls.
- Winter-peaking utilities (Northwest, parts of the Southeast): a morning peak around 6 to 9 a.m. plus an evening peak.
- Off-peak: overnight, midday on some plans, and usually all weekend and holidays.
- Peak-to-off-peak price ratios run from about 1.5:1 to over 4:1. A bigger spread means more to gain and more to lose.
3. The math, with examples
Baseline: the current U.S. average residential price of 17.99¢/kWh. Assume a TOU plan with peak at 28.78¢ (1.6×) and off-peak at 13.49¢ (0.75×), and a home using 900 kWh a month.
| Household | On-peak share | Flat bill | TOU bill | Monthly change |
|---|---|---|---|---|
| Typical home, no changes | 25% | $161.91 | $155.84 | saves $6.07 |
| Shifts laundry, dishwasher, pre-cools | 15% | $161.91 | $142.08 | saves $19.83 |
| Heavy afternoon AC, works from home | 35% | $161.91 | $169.60 | costs $7.69 |
Break-even: on this plan, TOU wins if less than 29% of your kWh fall in peak hours. Formula: (flat − off-peak) ÷ (peak − off-peak).
EV example: charging 300 kWh a month (about 1,000 miles) costs $53.97 at the flat rate and about $26.98 on an EV plan whose overnight price is half the flat rate, a saving of $26.98 a month, or $324 a year. Check the EV charging cost calculator and Level 2 charging costs.
Run your own numbers with the time-of-use savings calculator.
4. Who saves and who loses
Likely to save
- EV owners who charge overnight
- Homes empty on weekday afternoons
- Homes with a battery or smart thermostat
- Pool owners who can run the pump off-peak
- Electric water heater on a timer
Likely to lose
- Home all afternoon in a hot climate with high AC use
- Medical equipment that must run in peak hours
- Families who cook, wash and bathe mostly 4 to 9 p.m.
- Rooftop solar homes on plans that credit exports at low midday prices (check the net metering terms)
5. What to shift
| Load | kWh per use or day | How to shift |
|---|---|---|
| EV charging | 7 to 12 kWh/day | Set the car or charger schedule to off-peak |
| Central AC | 15 to 40 kWh/day in summer | Pre-cool to 72 to 74°F before peak, raise to 78 to 80°F during peak |
| Electric water heater | 10 to 15 kWh/day | Timer or smart controller; heat before peak |
| Pool pump | 5 to 15 kWh/day | Run overnight or late morning |
| Clothes dryer | 2.5 to 4 kWh/load | Delay-start or weekend |
| Dishwasher | 1 to 1.5 kWh/load | Delay-start after peak |
| Electric oven | 2 to 3 kWh/use | Use a microwave, air fryer or slow cooker during peak |
Refrigerators, routers and lights barely matter; they are small or run around the clock.
6. How to switch
- Download 12 months of hourly or 15-minute usage from your utility account (most smart-meter utilities offer it; look for "Green Button" export).
- Find the TOU tariff's peak hours and prices. Include delivery charges if they also vary by time.
- Use the utility's rate comparison tool if it has one; many show what you would have paid on each plan last year. Or use our TOU calculator.
- Ask about minimum stay, switching back, and bill protection.
- Enroll online or by phone. The new rate usually starts at the next billing cycle.
- Set schedules on your thermostat, EV, water heater and dishwasher the same day.
- Check the first two bills against your old rate.
Find your utility's average rate and whether it offers TOU on the utilities pages. In Texas, retail providers sell TOU and "free nights" plans; see Texas plans and check the EFL for the daytime price.
Frequently asked questions
Do time-of-use rates save money?
Only if most of your use falls outside peak hours. With a peak price 1.6× the flat rate and off-peak at 0.75×, you break even when about 29% of your kWh are on-peak. Typical homes use 20% to 30% on-peak, so savings are small unless you shift loads or charge an EV overnight.
What are typical peak hours?
Most residential TOU plans set peak in the late afternoon and evening on weekdays, commonly 4 to 9 p.m. or 5 to 8 p.m. in summer. Some winter-peaking utilities add a morning peak, such as 6 to 9 a.m. Weekends and holidays are usually off-peak. Your tariff sheet lists the exact hours.
Can I switch back if TOU costs more?
Most utilities allow it, but some require you to stay 12 months or limit switching to once a year. Several offer a first-year bill protection guarantee that refunds the difference if TOU costs more than your old rate. Ask before enrolling.
What is the difference between TOU and a peak-time rebate?
TOU changes your price every day by hour. A peak-time rebate keeps your normal rate and pays a credit for each kWh you cut below your baseline during a few announced event hours a year. Rebates have no downside if you do nothing; TOU does.