Energy Cost & Tariff Savings
Compare Flat Rate vs. Time-of-Use (TOU) energy tariffs. Estimate savings by shifting electricity usage (EV charging, laundry) to off-peak hours.
Formula
Cost = ฮฃ (kWh_t ร Rate_t)
Total cost is the sum of usage in each time period multiplied by that period's rate. Savings come from 'Load Shifting'โmoving consumption (kWh) from high-rate periods (Peak) to low-rate periods (Off-Peak).
Worked Examples
Example 1: Flat Rate
Problem:1000 kWh @ $0.15
Solution:$150.00 total bill.
Result:$150.00
Example 2: TOU Optimized
Problem:1000 kWh: 10% Peak ($0.25), 90% Off-Peak ($0.08)
Solution:(100 * 0.25) + (900 * 0.08) = $25 + $72 = $97.00
Result:$97.00 (Save $53)
Example 3: TOU Lazy
Problem:1000 kWh: 50% Peak ($0.25), 50% Off-Peak ($0.08)
Solution:(500 * 0.25) + (500 * 0.08) = $125 + $40 = $165.00
Result:$165.00 (Pay more!)
Frequently Asked Questions
What is Time-of-Use (TOU)?
A utility pricing plan where electricity costs more during high-demand hours (e.g., 4PM-9PM) and less during low-demand hours (e.g., Midnight-6AM).
What are the biggest energy hogs to shift?
EV Charging, Electric Dryers, Dishwashers, and Pool Pumps. HVAC is hard to shift without discomfort (Pre-cooling).
Is TOU always cheaper?
No! If you are home all day running AC during peak hours and don't shift usage, TOU will likely cost you MORE than a flat rate.
What is 'Peak' usually?
Typically late afternoon/evening (4 PM to 9 PM) when solar generation drops but household usage spikes.
How much can I realistically shift?
EV owners can shift ~30-40% of total load. Non-EV homes might only shift 10-15% (Laundry/Dishwasher).
What is a 'Super Off-Peak'?
Some plans offer very cheap rates (e.g., $0.03) late at night to encourage EV charging.
Does Solar change this?
Yes, Net Metering 2.0/3.0 often pushes you to TOU. Batteries let you 'shift' solar power to peak hours.
How do I find my rates?
Check your utility bill or log in to your account. Look for 'Generation Charge' or 'Tariff Details'.
What is dollar-cost averaging?
Dollar-cost averaging (DCA) means investing a fixed dollar amount on a set schedule regardless of market conditions. When prices fall your fixed amount buys more shares; when prices rise it buys fewer, lowering your average cost over time. DCA eliminates emotional decision-making โ research shows most investors who attempt to time the market underperform a simple DCA strategy due to behavioral biases. It is especially effective for volatile assets like equities and index funds.
Background & Theory
Understanding Your Bill
Your bill is usually split into Generation (making the power) and Delivery (moving it). TOU rates often apply to both.
Strategy: Load Shifting
The game is arbitrage. Buy low, use high.
- Easy Shifts: Set EV charger to midnight. Run dishwasher before bed.
- Medium Shifts: Pre-cool the house (Super-cooling) before 4 PM, then turn AC up/off during peak.
- Hard Shifts: Cooking dinner. It's hard to shift cooking time without lifestyle changes (or using a crockpot).
The Battery Advantage
Home batteries (Powerwall, etc.) automate this arbitrage. They charge from solar/grid when cheap and discharge when expensive, effectively making your "Peak" usage zero.
History
The Era of Flat Rates
For decades, electricity meters were dumb analog dials. They only counted total kWh. Utilities charged a flat rate (e.g., 10ยข/kWh) regardless of when you used power.
The Duck Curve & Smart Meters
With the rise of solar power, utilities faced the "Duck Curve"โtoo much energy at noon, not enough at sunset. Smart Meters (AMI) allowed them to measure when energy was used. This enabled Time-of-Use (TOU) pricing to incentivize people to use power when it's cheap and abundant.
The Electrification Era
As homes adopt EVs and Heat Pumps, electricity consumption is doubling. Grid constraints make TOU critical. Utilities are now moving to "Dynamic Pricing" where rates change hourly based on real-time grid stress.
Common Misconceptions
- Myth: "Electricity is electricity." Reality: Electricity at 5 PM on a hot day costs the utility 10x more to generate than at 3 AM. TOU reflects this reality.
- Myth: "I can't save much." Reality: An EV driver can save $500+/year just by scheduling charging for 2 AM.