You might assume that all energy costs the same, but that's not quite true. With standard electricity plans, the cost of electricity remains the same at all times. But utility companies are increasingly offering time-of-use plans, which charge more for electricity during peak hours but offer cheaper service during off-peak times.
Think of it like the surge pricing that Uber uses. When electricity is high in demand and the grid is strained with lots of people plugged in, then prices are higher. When things aren't so busy, you can get more favorable pricing. If your utility company has you on a time-of-use plan, you can take advantage by figuring out peak hours and off-peak hours and timing your electricity use to the periods when electricity is at its cheapest.
What are peak hours?
In a time-of-use electricity plan, peak hours — sometimes referred to as on-peak hours — are the hours of the day during which demand for electricity is the highest. During this time period, you will be paying the highest amount per kilowatt-hour (kWh) used.
Some electricity use is going to be unavoidable, whether it's your refrigerator keeping your food cool or your security system that's always on and protecting your home. But peak hours are a bad time to do tasks that can wait. If you're running large appliances, whether it's your dishwasher or washing machine, it's going to cost you extra during peak hours.
What are off-peak hours?
Conversely to peak hours, off-peak hours are the times when electricity prices are cheaper. This is typically the case because there are fewer people trying to access the grid during these hours, meaning there is less overall demand and you won't have to pay a premium for each kWh that you use.
Off-peak hours are a great time to do those more energy-intensive tasks that you may have waiting for you. While it might not be the most convenient, if you happen to be home during off-peak hours, you can save yourself money on your monthly electricity bill by timing your tasks to these time frames.
Why do utility companies use time-of-use rates?
Utility companies know when stress on the grid is going to be at its highest. In order to make sure the grid can serve all of these customers, they need to make sure that power plants are operational and meeting all of the demand. When demand increases, these companies may have to generate more electricity, which can cost more. They either need to generate that power in advance to meet the peak or purchase extra energy from other sources. That additional expense is passed on to the consumer through time-of-use rates, which charge you more when you use electricity during peak hours.
When are peak hours?
Peak hours vary depending on the time of year and region of the country. As a general rule, think of peak hours as the time during which most people are getting home from work for the day. This is when people are turning on their lights, firing up their TVs and settling into their home for the night — all of which requires more electricity than usual.
|Time zone||Peak hours||Off-peak hours|
|Eastern||2pm - 6pm||6pm - 2pm|
|Central||1pm - 5pm||5pm - 1pm|
|Mountain||8am - 11pm||11pm - 8am|
|Pacific||5pm-9pm||9pm - 5pm|
|Time Zone||Peak hours||Off-peak hours|
|Eastern||6am - 10am 6pm - 10pm||10am-6pm 10pm-6am|
|Central||5am - 9am 5pm - 9pm||9am - 5pm 9pm - 5am|
|Mountain||7am - 10pm||10pm - 7am|
|Pacific||6am - 10am 5pm - 8pm||10am - 5pm 8pm - 5am|
Additional money-saving tips
Typically, weekends are considered to be off-peak hours for the full day. This means that if you can time your energy-intensive tasks to Saturday and Sunday, you can typically save yourself some money when it comes to your monthly energy bill. Equipped with the knowledge of when peak hours occur and what times are considered to be off-peak hours, you can figure out how to time your use of major appliances to off-peak hours and keep your energy costs down. You can also consider purchasing tools like a solar battery that will provide you with an energy reserve so you don't have to draw from the grid during peak hours.
You can also use this knowledge to save more by minimizing the amount of electrical usage that you require during peak hours. You can unplug your appliances that you aren't using, make sure that your thermostat is set properly so your furnace is not running as much during peak hours, and utilize "sleep" mode on things like your computer and TV to make sure they aren't using unnecessary electricity that will cost you more. You may also want to consider using motion sensors in your home that can be equipped to interact with other electronic devices. For example, if you aren't home, there is no need for your lights to be on. Setting them to a motion sensor would ensure they won't turn on unless you're home and moving around.