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Learning to take advantage of time-of-use (TOU) rates and adjusting your energy consumption patterns is a great way to save money on your electrical bills. However, don’t just switch to a TOU structure without altering your energy usage, or you could end up paying more.
So, to make it easy for you, we’ll explore TOU rates, explain how they work, compare them to standard electrical bills, and show you how you can save significant money by taking advantage of this system.
What Is a Time of Use Rate (TOU)?
Time-of-use (TOU) rates are a billing structure in which the rate you pay for your power changes throughout the day. These time-varying fees are typically higher than usual when the demand for electricity and the cost of generating it are high, like on a hot summer day when everyone uses their air conditioner.
However, the rates drop much lower when the electricity demand is low, like in the middle of the night when people use less power.
How Do Time-Of-Use Rates Work?
Most people will have to opt into getting a TOU rate; your provider won’t automatically put you on one. So, you must contact your provider to see if they are available in your area. Time-of-use fees are when your electricity provider charges you different power rates depending on the time of day you use it.
Power will be the most expensive during peak hours when demand is highest. Costs will be the lowest during off-peak hours, like the middle of the night and early morning when demand is lowest.
The most complicated part of time-of-use is that it may also vary with the seasons, day of the week, and holidays, which affect demand and cost. It also varies depending on your provider and location. So, you must look at your bill or contact your provider to get your TOU fee structure to maximize your savings potential.
Why Are Time-Of-Use Rates Important?
Time-of-use rates are significant because they better align consumer costs with the actual cost of producing electricity. A utility company’s cost to generate power rises and falls throughout the day for various reasons. Higher demand, climate factors, and power sources all play a role.
This transparency helps you understand power supply and demand. Most importantly, it can allow you to save money on electricity.
Comparing Standard Bills to Time-Of-Use Rate Bills
A standard electricity bill is simple. It includes flat service fees that cover administrative and maintenance costs that do not vary with usage, plus a non-variable rate multiplied by the number of kWh your household uses. With this structure, the only way to save money on your bills is to lower your consumption.
A TOU bill is similar in that it has service and usage fees but is more complex because the usage rates vary throughout the day. So, instead of a flat usage rate, you must multiply your consumption during certain hours by the rate charged during those hours. Don’t worry; this will all be broken down on your bill.
If you switch to a TOU structure but don’t change your usage patterns, you may pay more if you use more power during peak hours. However, if you time your usage better, you should save significant money, even if you can’t reduce your overall power consumption.
Ways to Save Money With Time-Of-Use Rates
Let’s look at ways to maximize your savings from your time-of-use rates.
Adjust Your Thermostat or Use a Smart Thermostat
Air conditioning and heating often have the most significant impact on your power bill. By using a smart thermostat to run less heating or cooling during the most expensive hours or when it’s not needed, you can save significant money and not have to worry about remembering to adjust your thermostat manually.
Run Appliances at Night or Use Smart Appliances
While you can get up at night to turn on your washing machine or dishwasher, wouldn’t it be easier if you had smart appliances that you could program to run during off-peak hours? All you do is load the washing machine or dryer in the evening and set it to run during the lowest TOU fee period. Then, you can save money while you sleep.
Use Solar Power
Using renewable energy for your home is the best way to save the most money on your utility bills.
If you have a solar hybrid system and are still connected to the grid, you can use solar power during the afternoon when your fees are high and your panels generate electricity. Then, when your panels are not producing electricity at night, you can use power from the grid at a lower rate.
While panels alone are great, the best way to maximize the savings from your solar panels is to have an EcoFlow Solar generator that includes storage batteries. Using the EcoFlow DELTA Pro + 400W Solar Panel, you can still have solar energy in the early evening when the sun may have gone down, but your TOU rate is still high.
Use Storage Batteries
Using an EcoFlow Portable Power Station with storage batteries allows you to recharge them using solar or grid power during off-peak hours. Then, you can use that stored energy in the afternoon and early evening when your TOU rates are high, but you still need power.
Take Advantage of Net Metering
If you’re generating solar power on a hybrid system, check if net metering is available in your area. It allows you to sell power back to the grid if you generate more than you use. You can also store excess energy in an EcoFlow DELTA Series Portable Power Stations like the
EcoFlow DELTA Pro 3 — a single source to power all your essential home appliances.
Time-of-use fees also affect net metering since you will get higher credits during peak hours and lower credits during off-peak hours. Peak hours are usually later in the afternoon and early evening, which may not completely align with your maximum production. Utilizing your storage batteries during peak hours will allow you to maximize your credits by channelling as much of your energy production into net metering as possible.
Charge Your EV During Off-Peak Hours
Charging Electric Vehicle (EV) batteries consumes a lot of power. However, you can easily take advantage of the TOU system because EVs and their chargers are programmable. You can set them to charge only during off-peak hours, which will save you significant money. Simply plug it in when you get home, but have it charge after you go to bed.
Frequently Asked Questions
Is Time of Use Metering Worth It?
For most people, time-of-use metering is definitely worth it. You can save significant money on your bill if you learn to run your appliances at night during off-peak hours and utilize things like smart appliances and smart thermostats. However, it depends on your lifestyle and how much incentive you have to alter your consumption patterns.
Final Thoughts
Time-of-use rates can be an excellent way for homeowners to save money on their monthly utility bills. You can save significant money by using smart appliances and thermostats, learning when and how you use the most power in your home, and timing your washing machine, dishwasher, and other appliances to run during off-peak hours.
Using one of EcoFlow’s Solar Generators will save you even more money since you can store energy to use your battery power when the fees are the highest and use your electrical grid at night when the usage rates are the lowest. Of course, you can also buy a large enough system to run your entire home, go off the grid, and never pay another electrical bill again!