You may have seen terms like “off-peak electricity hours” and “peak usage” on your energy bill. Let’s break down what these terms mean and how they impact your energy costs.
What Are Peak and Off-Peak Electricity Hours?
Peak hours for electricity refer to times when energy demand is at its highest, while off-peak hours are when demand is significantly lower. Understanding these periods is essential for both solar and non-solar homeowners, as they can develop strategies to use energy more efficiently and cost-effectively.
For solar homeowners, one effective strategy is to implement a “time-of-use” (TOU) plan, which can shorten the payback period on their solar investment.
Understanding Peak Electricity Hours
Energy producers must provide a minimum amount of power to the grid at all times, known as the “base load.” However, electricity demand varies throughout the day, leading utilities to charge customers different rates based on usage.
Historical data allows utility companies to identify peak demand times throughout the day. Typically, residential energy demand peaks when people are home and active—often in the morning and evening when they return from work and school.
These high-energy demand periods are labeled “peak electricity hours.” Utilities charge higher rates during these times to manage grid strain and prevent blackouts.
Time-of-Use (TOU) Plans
Many utilities divide TOU into three time frames that can vary by provider and region:
- Peak Electricity Hours: Weekdays between 5:00 p.m. and 8:00 p.m. and on weekends.
- Mid-Peak Hours: Transitional times between peak and off-peak hours.
- Off-Peak Electricity Hours: Typically weekdays before 4:00 p.m. and after 9:00 p.m.
These TOU structures encourage consumers to shift their energy consumption away from peak periods, helping maintain grid stability and manage demand.
Off-Peak TOU and Rate Savings
Off-peak hours are when electricity demand is low, resulting in lower costs for consumers. During these periods, utilities do not incur high costs to meet energy needs, leading to reduced rates for customers.
Conversely, when demand escalates, utilities may need to source additional electricity from external suppliers, driving up wholesale energy prices and, subsequently, rates for consumers.
For example, a utility in Colorado may charge between 17 to 28 cents per kilowatt-hour (kWh) during peak times, while off-peak rates could drop to around 10 cents per kWh—about one-third of peak prices.
Impact on Solar Consumers
Electricity rates for grid-tied solar systems can vary significantly based on the utility company, region, and rate plans. In some cases, solar consumers may find energy costs lower than non-solar consumers under a TOU plan, although excessive energy use during peak hours can negate those savings. Additionally, solar consumers often have to pay a monthly service charge for grid access and maintenance.
However, solar homeowners can benefit from net metering policies, which credit them for excess solar power generated and sent back to the grid. This is where solar battery storage solutions, like the Maxeon (formerly SunPower) SunVault or Tesla Powerwall, come into play.
The Role of Solar Batteries
Adding battery storage to solar systems allows homeowners to manage energy consumption during peak times. By charging the battery during off-peak hours, consumers can use stored energy during peak hours to avoid higher rates and ease grid demand.
In regions where solar generation is increasing, TOU plans incentivize consumers to use less energy when solar output is low and more when it is high, reducing reliance on fossil fuels.
The Bottom Line
For both solar and non-solar homeowners, the most affordable electricity can be found during off-peak hours. By timing your energy use—such as lighting, appliances, and HVAC systems—around these hours, you can:
- Avoid costly peak TOU charges
- Reduce payback timelines for energy investments
- Help utilities maintain a stable electrical grid
Contact Freedom Solar for Efficient Maxeon Solar Panels
At Freedom Solar Power, we’re committed to supporting your energy generation needs, regardless of peak or off-peak hours. We offer Maxeon (formerly SunPower) solar panels, recognized for their exceptional efficiency.
Ready to start harnessing solar power? Call us at (800) 504-2337 or complete our online inquiry form. One of our energy consultants will reach out for a free consultation and quote!