On a time-of-use plan, the same kilowatt-hour can cost 9¢ at 2am and 28¢ at 6pm. That's not a billing error — it's the entire design. Time-of-use (TOU) pricing charges you based on when you use electricity, not just how much, and utilities across the US have been steadily moving customers onto these plans, often by default. California's major utilities made TOU standard for residential customers, and utilities in Arizona, Colorado, Michigan, Massachusetts, and Texas offer or default to similar structures.

That creates a genuinely new way to cut your bill: shifting usage instead of reducing it. Same laundry, same dishes, same EV miles — different hours, smaller bill.

What a TOU Day Actually Looks Like

Exact windows and prices vary by utility, but the shape is remarkably consistent. Here's a representative summer weekday structure:

Price of a kWh across a typical TOU day
Representative summer weekday plan — your utility's exact windows and prices will differ
The 4–9pm peak is when everyone comes home, cooks, and runs AC — while solar generation fades. That collision is what utilities price against.

Why Utilities Price It This Way

The grid must be built for its single worst hour of the year. Late afternoons in summer, demand surges just as solar output declines — utilities fire up expensive "peaker" plants that may run only a few hundred hours a year, and that cost lands on everyone. TOU pricing tries to flatten the spike by making peak power expensive and off-peak power cheap, so that demand moves instead of generation.

Who Saves on TOU — and Who Pays More

✅ TOU usually wins if you…

  • Own an EV (charge overnight — the single biggest TOU win)
  • Have an electric water heater you can put on a timer
  • Run a pool pump
  • Are away from home most weekday afternoons/evenings
  • Have solar + battery storage
  • Can delay-start laundry and dishwasher

⚠️ Flat rate may be better if you…

  • Are home and cooking dinner at 5–8pm every day
  • Need heavy AC in the 4–9pm window with no pre-cooling option
  • Work from home with high daytime + evening usage
  • Have inflexible medical equipment loads
  • Can't move any of your big appliances' schedules

Most utilities publish a rate comparison tool that runs your actual smart-meter history against every plan they offer, and many offer first-year bill protection when you switch — you pay the lower of the two plans while you learn your pattern. Use that before committing.

The Load-Shifting Playbook, Ranked by Impact

  1. EV charging → overnight (saves $20–$40/month). A daily-driven EV uses 250–400 kWh/month. Moving that from 19¢ peak-adjacent hours to a 9¢ overnight window is pure savings, set once in the car's charging schedule and forgotten.
  2. Pre-cool the house (saves $15–$40/month in summer). Run AC harder from 1–4pm at midday rates, then raise the setpoint 3–4°F through the peak. A reasonably insulated home coasts through most of the 4–9pm window on stored "coolth."
  3. Water heater on a timer (saves $10–$25/month). An electric tank heater is a battery that stores hot water. Heat it overnight and after the peak; a $40 timer or a smart heat pump water heater handles this automatically.
  4. Pool pump → overnight or midday (saves $10–$30/month). Pool pumps run 4–8 hours daily and don't care when.
  5. Laundry & dishwasher → after 9pm (saves $5–$15/month). Delay-start buttons exist for exactly this. The electric dryer is the heavy hitter here.
Stack them: a household with an EV, electric water heating, and a pool that shifts all three can realistically cut $50–$90/month without using one fewer kWh. That's the TOU promise — the bill drops because the timing changed.

TOU + Solar: The Battery Question

TOU rates complicate the solar math in one direction and improve it in another. Solar exports happen midday when rates (and export credits) are lowest — that weakens the old "sell high at noon" economics, especially under California's NEM 3.0 rules. But a battery flips it: store your own midday solar, discharge it through the 4–9pm peak, and you're offsetting your most expensive hours with your cheapest generation. This is why battery attach rates on new solar installs have jumped in TOU-heavy states.

Our solar calculator includes battery options in its cost estimate, and the battery storage guide covers sizing and 2026 pricing in detail.

How to Check Your Own Situation This Week

  1. Find out what plan you're on. It's on your bill — many customers were defaulted onto TOU without noticing.
  2. Open your utility's hourly usage dashboard. Look at how much of your usage falls inside the peak window. Under 25%? TOU likely already favors you. Over 40%? Shift or switch.
  3. Run the utility's plan comparison tool on your last 12 months of data.
  4. Automate, don't memorize. Every shift that survives long-term is one a timer, thermostat schedule, or car setting does for you.

Frequently Asked Questions

What are time-of-use electricity rates?
Time-of-use (TOU) rates price electricity differently depending on when you use it. Peak hours — typically 4–9pm on weekdays — cost the most because grid demand is highest. Overnight and midday hours cost the least. The same kWh can cost 9¢ at 2am and 28¢ at 6pm on the same plan.
When is electricity cheapest on a TOU plan?
Overnight — usually between about 11pm or midnight and 6am — is almost always the cheapest window. In solar-heavy states like California and Arizona, midday (roughly 9am–3pm) can also be cheap or even the cheapest period, because solar generation floods the grid.
Will a time-of-use plan save me money?
It depends on when you use power. Households that can shift big flexible loads — EV charging, laundry, dishwasher, pool pump, water heating — away from the 4–9pm peak usually save 10–25%. Households whose usage is locked into evening hours with no flexibility can pay more than on a flat rate.
What appliances are worth shifting to off-peak hours?
In rough order of impact: EV charging (often $20–$40/month), electric water heating on a timer, pool pumps, laundry (especially electric dryers), and dishwashers with delay-start. AC pre-cooling — cooling the house before 4pm and coasting through the peak — is the main strategy for cooling costs.
Do solar panels work well with time-of-use rates?
It changes the math in both directions. Solar production peaks midday, when TOU rates are lowest — so exported power earns less credit. But pairing solar with a battery lets you store cheap midday solar and use it during the expensive 4–9pm peak, which is why batteries have become standard in TOU-heavy states like California.