You may have noticed your bill for energy contains words such as “off-peak electricity hours” and “peak” usage. You may also have observed that the electricity prices differ based on the point you’ve used and the time of day.
In short, in the simplest terms, off-peak and peak energy times affect your energy usage. Let’s look at what this signifies.
WHAT ARE PEAK AND OFF-PEAK ELECTRICITY HOURS?
What are those hours that are the most efficient for electricity? When it comes to electricity, the peak times (and non-peak times) are, in essence, the opposite. Let us explain.
Knowing how off-peak and peak electricity hours impact your energy bill is crucial for homeowners with solar or non-solar homes and ratepayers. Why? Understanding the basics can help you, as an energy user — create strategies to ensure energy efficiency and lower costs. Energy usage.
One of the strategies for solar-powered homeowners is implementing a “time-of-use” (TOU) plan, which could also reduce the payback time for solar investments.
UNDERSTANDING PEAK ELECTRICITY HOURS
Before we get a better look at what the peak electrical times are, we need to know one crucial aspect. Energy producers must provide the minimum amount of energy to the grid electrically at any moment.
Whether coal, gas, or nuclear energy sources fuel the power plants, they must allocate a certain percentage of their generated energy to the grid. The minimum power requirement of utilities is referred to as”base load. “base load.”
The electricity demand varies during the day, and utilities charge a distinct charge for usage based on the moment of the day.
These usage patterns enable utility companies to determine the hours of the day when houses are the most energy-intensive. Needs.
It is not surprising that demand for residential energy is the highest when homeowners are in a state of alertness and activity. During the week, the highest usage occurs in the afternoons and mornings when people get up and go to their homes after work or school.
These times of intense energy demand are referred to as “peak” electricity hours. They’re also more crucial than initially appear, as much order can cause grid strain and trigger power outages. In turn, utilities will charge higher rates for electricity during the peak of TOU.
TOU: HOW DOES IT WORK?
Many utilities classify TOU three times, which may differ based on the organization, operating region, and season. Here are the primary TOU timings:
- The peak hours for electricity: Weekdays between the hours of 5:00 pm and 8:15 pm also on Saturdays
- Mid-peak hour: Transitional time between off and peak hours
- Off-peak power hours: Typically, weekdays before 4:45 pm and up to 9:00 pm.
How electricity prices are calculated on TOU allows utility companies to influence the behavior of consumers and ensure the integrity of the electric grid.
For instance, if someone is aware that they could have to pay three times the price of electricity to run dishwashers during peak electric hours, they’ll (hopefully) operate them in off-peak hours. This aids their utility company in managing the power demand.
OFF-PEAK TOU AND RATE SAVINGS
Off-peak times for electricity are times when power demand is not as high, meaning lower consumer prices.
In off-peak times, the power companies and utilities do not have to pay as much to generate electricity because the overall power demand is less. As demand grows, grid operators demand additional energy from producers.
If electricity generators cannot boost production quickly, utilities must buy additional electricity from different sources. This leads to more expensive wholesale energy prices, resulting in more expensive electricity prices for consumers.
What is this implying to you in cents and dollars? Customers’ energy costs for one Kilowatt-hour (kWh) depend on the location and the utility company.
For instance, the utility company located in Colorado has the highest prices during summer, when solar panels generate the most energy. They could charge up to seventeen or even 28 cents for kWh when it is in high demand. In contrast, off-peak rates could be as low as 10 cents/kWh (about one-third of the price for peak use).
WHAT PEAK USAGE AND OFF-PEAK USAGE MEAN FOR SOLAR CONSUMERS
Grid-tied solar panels (hybrid ones) vary by region, utility companies, and rate plans.
For instance, an electric utility located in Texas could estimate that the cost per kWh for solar energy is approximately half of a non-solar customer in a TOU plan. However, savings will be less when a solar user uses excessive power during peak times of electricity. Solar customers also have to pay a monthly service fee to access the grid and maintenance of the line.
Naturally, solar users can lower their energy costs when a utility has adopted the net metering policy. In this instance, utilities will credit solar consumers for any excess solar power they produce (and don’t consume). This is the point where solar storage batteries are used.
WHAT DO SOLAR BATTERIES HAVE TO DO WITH IT?
Solar owners should consider possibly adding batteries (such as the SunPower SunVault or Tesla Powerwall) to their solar system at home to reduce TOU and prevent high charges.
In times of low demand, solar panels are used to charge batteries. During an electric peak, the user uses the battery’s electricity and avoids the grid stress and charges that can be incurred during peak times.
Plans for off-peak and peak usage are also a part of the shift towards greener energy in certain states. In the case of Colorado, clean sources of energy like wind and solar are increasingly powering the grid.
However, energy demand is high at sunset, and panels cannot produce enough (if they generate any) energy. In the end, utilities must meet energy demand with fossil energy sources.
In implementing TOU programs, utility companies can encourage customers to consume smaller amounts of electricity when solar energy generation is lower and to use more incredible energy when solar power is more significant. In the end, solar users decrease their reliance on fossil fuel-based energy sources.
THE BOTTOM LINE
For solar-powered homeowners, not the most affordable, electricity is located in the middle and peak electricity hours.
Timing your lights, appliances, and HVAC consumption during these hours has multiple advantages:
- This will help you avoid high TOU costs.
- Enables shorter payback timelines for infrastructure investment
- This allows operators and utilities to manage the electric grid better