Time-of-use rates: automating your home around peak hours

What time-of-use pricing is

Electricity demand is usually highest in the afternoon and early evening, so costs to provide it are higher then. The Energy Information Administration notes that some utilities offer time-of-day pricing to encourage conservation and reduce peak demand. A TOU plan sets a price schedule in advance, based on season, day of week and time of day. In one utility study described by Lawrence Berkeley National Laboratory for the Department of Energy, the summer peak was a three-hour window from 4 to 7 p.m. Your plan may differ, so use your own schedule.

Most plans have two or three price levels: peak, off-peak and sometimes super off-peak. Weekends and some holidays are often all off-peak. Seasons usually have different windows, and some utilities add a separate demand charge, which is a different kind of bill.

Find your actual rate

1. Look at your bill for a rate or plan name (for example “residential TOU”).
2. Open your utility’s rate page and download the schedule. Note the peak hours, the price for each period, the season dates and the holidays.
3. Check whether you chose the plan or were moved to it by default. Many utilities allow you to change plans.
4. Ask the utility whether it has a bill comparison tool. It can show what your last twelve months would have cost on each plan, which is the clearest evidence of whether TOU suits you.

If you can see your hourly usage, you can do this yourself. Many utilities support Green Button, a way to download or share your usage data. See the whole-home energy monitor guide for what that data reveals.

Which loads are worth shifting

Do not shift loads that must run: the refrigerator, medical equipment and alarm systems.

A worked example, with made-up rates

Say a plan charges 36¢ per kWh at peak and 14¢ off-peak (illustrative numbers, not a real tariff). A dryer cycle uses about 3 kWh. Run at peak it costs $1.08; run off-peak it costs $0.42, a difference of $0.66. Four loads a week is about $137 a year. A dishwasher uses much less per cycle, so the gain is smaller. The pattern is that the big, flexible loads (dryer, EV, water heater, cooling) produce most of the savings, and lighting and electronics produce almost none.

To price a particular appliance, use the device energy cost calculator with the peak rate for the hours it runs, or the space heater cost calculator for portable heating.

Pre-cooling and pre-heating without discomfort

• Set a schedule that lowers the cooling setpoint by a couple of degrees an hour or two before the peak starts. The house stores the cold, and the system rests during the peak.
• Keep the allowed rise during peak modest, and keep a ceiling fan on in occupied rooms.
• With a heat pump, a large catch-up after the peak can trigger backup heat. Use gradual recovery.
• ENERGY STAR notes that certified smart thermostats are designed to work with programs offered by some local utilities that give incentives for managing reliability.

Automate it, and know the limits

• Time triggers are easier than rate triggers. Update them when your utility changes the schedule for summer and winter, and put a reminder in your calendar.
• Keep the delay-start on appliances as the first choice. It avoids adding failure points.
• Check that the plan suits you. The Lawrence Berkeley study found customers moved to TOU by default saved only about 1.8% on average, and volunteers about 2.6%. Households with large flexible loads do better; households that are home all afternoon with no flexible load may pay more.