If you’re considering a time-of-use (TOU) electricity plan, it’s important to understand peak and off-peak electricity hours. With these plans, the rate that you pay per kilowatt-hour for electricity varies according to the time of day when you use it.
Many utility companies use Time-Of-Use rates to increase peak pricing when electricity is in high (peak) demand, helping to reduce the strain on the power grid. In turn, this incentivizes customers to use more electricity during periods of low demand (off-peak) when electricity prices are lower.
Peak and off-peak electricity hours can get confusing, but if used correctly, TOU rates can lead to lower energy costs by shifting the timeframe when your home uses electricity. This article will help you understand peak and off-peak electricity hours, and show how you can use them to maximize your energy savings, especially if you have solar panels installed on your home, or drive an electric vehicle.
What Are Peak Electricity Hours?
Peak electricity hours are periods throughout the day when electricity is in high demand, so consumers pay an increased rate per kilowatt-hour for the electricity they use. These hours can vary by location, season, electricity company, and other factors.
Utility companies and retail electric providers use this strategy to reduce the negative effects of high electricity demand on the electricity grid. Their goal is to protect the power grid and avoid scenarios where there isn’t enough electricity to meet everyone’s demands.
What Are Off-Peak Electricity Hours?
Off-peak electricity hours are periods when the electricity demand is low, which results in consumers paying lower electricity prices. During these times, utilities and electric companies don’t have to pay as much to generate electricity because people are using less energy overall.
Put simply, electricity is cheaper when an excess supply is available, and more expensive when there is excess demand.
What Are Super Off-Peak Hours?
Some electric companies create time-of-use plans with a third level called super off-peak hours. During these hours, electricity prices are the lowest because demand is at its lowest point.
The goal of super off-peak rates is to shift demand away from those peak hours for electricity usage, to help normalize energy demands throughout the day and make the supply needs more consistent.
Why Do Companies Use Peak and Off-Peak Hours for Electricity?
The general strategy for peak and off-peak hours is to shift consumer electricity usage to different times of the day. When electricity consumption peaks—both in amount and frequency—it's harder to generate power quickly to meet that demand. Creating time-of-use plans helps to shift that usage towards off-peak electricity hours when the level of electrical demand is lower.
The Relationship Between Demand and Generation
Utility companies must ensure power plants are operational and can generate enough power for everyone. They know that electricity demand on the grid changes continuously depending upon the season of the year, time of day, and schedule of people in their homes.
Every time demand increases, grid operators need to request more electricity from generators. If those generators can’t ramp up production quickly enough, the electricity companies must purchase extra electricity from other sources. The result is increased wholesale prices, leading to a higher rate per kilowatt-hour.
Different plants often use different methods to generate power. While some plants can power up to maximum capacity within an hour, others can take up to a day, so different methods are used at different times. In the worst-case scenario, if generation can't increase fast enough to meet this high demand, blackouts may occur.
Off-peak and peak times also support the ongoing shift to cleaner energy in some states. For instance, California is increasingly powering its grid using clean energy sources like the sun and wind. But after sunset, when people are returning home, energy demand shoots up just as the sun is setting on those solar panels.
To meet this increased demand during the peak hours for electricity, the utility companies may have to revert to carbon-intensive sources that emit greenhouse gases. By implementing TOU rate plans, electric providers can encourage people to use less energy during times when solar energy generation is lower, and maximize use when solar power is plentiful.
What Are Time-of-Use Plans?
Abbreviated as TOU, time-of-use plans follow a system that determines the amount (as a price per kilowatt-hour) that consumers will pay, based on the time when the electricity is used. This method aligns electricity price with the cost of electricity production. Residential customers are billed at a higher rate during electricity peak hours since the utility is spending more to meet the increased demand in their service area.
Common Hours for Peak and Off-Peak Electricity
Peak and off-peak electricity hours can vary with season, location, and utility company.
Summer often witnesses peak demand hours from 1pm to 7pm on weekdays, or 4pm to 9pm in some regions of the country, as a result of people using air conditioning to cool their homes. Off-peak periods are typically 8pm to 8am during this season.
In the winter, peak periods tend to be from 6am to 10am and 5pm to 9pm, the times when people are waking up from sleep and getting home from being out in the world. Off-peak electricity hours typically happen around 10am to 5pm and 9pm to 6am, the times when people are out of the house or asleep.
Saturdays and Sundays typically count as off-peak periods no matter the season, and some utility companies also include holidays occurring during the week in their off-peak rates.
To give you an idea of what these peak and off-peak hours look like in practice, here are a few examples from some of the largest utility companies in the country:
Pacific Gas & Electric (PG&E) Peak and Off-Peak Hours
PG&E offers two different options for time-of-use plans:
E-TOU-C - The electricity peak hours are from 4pm to 9pm every day, with off-peak hours before 4pm and after 9pm.
E-TOU-D - The price you pay depends on the time of day, the day of the week, and the season. Peak hours are from 5pm to 8pm Monday through Friday (except most holidays) and off-peak hours are before 5pm and after 8pm Monday through Friday and all hours on weekends and most holidays. Due to seasonality, the months of October through May have lower prices than the four months of summer (June through September).
E-TOU-D may be more attractive for higher energy users because the price of electricity is lower than E-TOU-C once monthly electricity usage exceeds the Baseline Allowance.
Southern California Edison (SCE) Peak and Off-Peak Hours
SCE offers three different options for time-of-use plans, with super off-peak, off-peak, mid-peak, and on-peak rates:
TOU-D-4-9PM - This plan is better for customers who stay up late or smaller households in coastal areas. In the summer (June to September) during the week, on-peak hours are 4pm to 9pm, with off-peak hours before 4pm and after 9pm. On weekends, that 4pm to 9pm window becomes a mid-peak rate that’s lower than the on-peak hours.
In the winter (October to May) mid-peak hours are 4pm to 9pm, with off-peak hours from 9pm to 8am, and super off-peak hours from 8am to 4pm. There is no change between weekday and weekend pricing.
TOU-D-5-9PM - This plan is better for customers who end the night early, and are home during the day. In the summer, on-peak hours are 5pm to 8pm during the week, with off-peak hours after 8pm and before 5pm. On weekends, that 5pm to 8pm rate becomes mid-peak.
In the winter, mid-peak is between 5pm and 8pm, with super off-peak hours from 8am to 5pm, and off-peak hours from 8pm to 8am. (No change between weekdays and weekends.)
TOU-D-PRIME - This rate is designed specifically for the owners of electric cars or plug-in hybrids, homes with battery storage, and customers with an electric heat pump for water or space heating, and is ideal for customers who use clean energy and can shift their energy usage to lower-cost times.
The summer on-peak hours are from 4pm to 9pm during the week, with off-peak hours before 4pm and after 9pm. On weekends, the rate between 4pm and 9pm lowers to mid-peak. In the winter, the super-off peak is from 8am to 4pm, with mid-peak rates between 4pm and 9pm, and then off-peak rates between 9pm and 8am, with no change between weekdays and weekends.
Duke Energy Peak and Off-Peak Hours
R-TOU - On weekdays during the cooling season (April through September) on-peak rates are from 1pm to 6pm, with a shoulder rate from 11am to 1pm and 6pm to 8pm. Off-peak rates are used during all other hours of the day, including weekends and holidays. On weekdays in the heating season (October through March), on-peak rates are from 6am to 9am, shoulder rates from 9am to noon and 5pm to 8pm, and off-peak rates used for the remaining hours, including weekends and holidays.
Florida Power & Light (FPL) Peak and Off-Peak Hours
FPL has electricity peak hours Monday through Friday between 6am and 10am, and then again between 6pm and 10pm, from November through March. From April through October, peak hours are from noon to 9pm on the weekdays. All other hours including weekends and holidays are considered “off-peak” and are billed at the off-peak rate.
Georgia Power Peak and Off-Peak Hours
TOU-RD-4 - Georgia Power’s TOU rate plan has on-peak periods between 2pm and 7pm, Monday through Friday from June through September, and then off-peak rates at all other days and hours, including weekends and holidays.
Save Money with Peak and Off-Peak Electricity in a Time Of Use Plan
Peak and off-peak electricity hours allow energy and utility companies to manage customer supply and demand better, especially when demand is very high. The Time-of-Use rates and timing of those hours typically vary between utility companies and retail electric providers, so check with your provider to see what rate plans are available.
To maximize your savings, electricity customers need to understand how these plans work, and what hours are more and less expensive. If you’re a solar panel owner, understanding peak and off-peak hours can be critical to maximizing the benefits of solar energy.
If you’re interested in getting solar panels installed on your home so you can enjoy a lower electric bill and help defeat climate change, talk to Palmetto today. Our friendly solar experts are ready to help you choose the right solar solution for your home, so get started today with our Free Solar Design and Savings Estimate Tool.