Time-of-Use Electricity Rates: How to Shift Your Usage and Cut Your Bill

Your utility sends a notice: you’re moving to a time-of-use rate. Or you just bought an EV and the dealer told you to “charge off-peak.” Either way, the price of electricity in your home now depends on the clock, and the same load of laundry can cost noticeably more at 6 p.m. than at 10 p.m.

The good news is that you don’t need to live by a stopwatch. Most of the savings come from moving a handful of big, flexible loads, and most modern appliances, EVs and thermostats can do that automatically. This guide shows how time-of-use rates work and how to set up your home to take advantage of them.

How time-of-use rates work

A time-of-use (TOU) rate charges different prices for electricity depending on when you use it. The schedule is set in advance, so you always know which hours are expensive.

The US Department of Energy describes a typical TOU structure as having:

• An afternoon or evening peak period, when prices are highest.
• Overnight off-peak hours, when prices are lowest.
• Shoulder or mid-peak periods in between on some plans.

Prices often also change by season, with summer peaks priced higher in many hot-weather regions.

Utilities use TOU rates because the cost of supplying power changes through the day. Demand spikes in the early evening, when people come home, cook and run air conditioning just as solar output drops. Paying customers to move flexible use out of that window can reduce the need for expensive peak power plants and grid upgrades.

Real examples of peak windows

Peak hours vary a lot by utility, which is why the first step is always to check your own plan.

Xcel’s Colorado window, for example, moved from 3–7 p.m. to 5–9 p.m. on November 1, 2025, after regulators approved the change. Peak hours can change, so recheck your plan each year.

TOU vs other rate types

Some utilities also pair TOU rates with demand response programs, which pay you or give bill credits for cutting use during grid emergencies.

Key takeaway: You don’t have to change everything. Find your peak window, then move your 3 or 4 biggest flexible loads, usually EV charging, water heating, laundry and dishwashing, plus pre-cooling or pre-heating your home.

Step 1: Find your peak hours and prices

Before you change any habits, collect 3 facts:

1. Your rate plan name. It’s printed on your bill and shown in your utility account.
2. Peak, off-peak and any mid-peak hours, including whether weekends and holidays count as peak.
3. The price difference between peak and off-peak. A bigger gap means more reward for shifting.

Then look at your usage. Most utilities with smart meters show hourly or 15-minute data online. Look for your highest-use hours. If they land inside the peak window, that’s where your savings are.

Many utilities also offer a rate comparison tool that estimates your bill on each available plan using your actual history. If you can’t shift much, a TOU plan may not be the best choice, and some utilities let you switch back.

Step 2: Schedule EV charging for off-peak hours

For EV owners, charging is usually the single biggest flexible load in the house. It’s also the easiest to shift, because the car sits in the driveway for hours.

• Use the car’s scheduler or the charger’s app. DOE’s Alternative Fuels Data Center notes that many vehicles and home chargers can be set to delay charging until off-peak hours.
• Set a “ready by” time rather than a start time if your car supports it, so it finishes just before you leave.
• Ask about an EV rate. Many utilities offer EV-specific TOU plans with lower overnight prices, and some pay incentives for off-peak charging.
• Avoid plugging in at the peak by accident. Schedulers sometimes reset after software updates or when you charge away from home.

Level 2 chargers make shifting easier because they can fill a battery overnight. Our guides on installing a Level 2 charger at home and home vs public EV charging costs go deeper.

Step 3: Pre-cool or pre-heat with your thermostat

Heating and cooling are big loads, but you can’t simply turn them off for 4 or 5 hours. The trick is to use your home as a thermal battery.

• Pre-cool in summer. Run the AC a little cooler for 1 to 2 hours before the peak, then let the temperature drift up a few degrees during peak hours.
• Pre-heat in winter if your peak falls in the evening and you use electric heat or a heat pump.
• Use your thermostat’s TOU feature. Many smart thermostats can read your utility rate schedule and shift cooling automatically. Some utilities offer bill credits for enrolling a thermostat in a demand response program.
• Close blinds on sunny afternoons so the house holds its cool longer.

How much you save depends on insulation, climate and comfort range. Our analysis of whether smart thermostats save money covers what to expect.

Step 4: Shift appliances and water heating

Here’s a quick checklist of common loads and how to move them.

Water heating

An electric water heater is a large load that stores energy as hot water, which makes it ideal to shift. A timer or smart controller can heat water off-peak so the tank coasts through the evening. Heat pump water heaters often have built-in scheduling; see how heat pump water heaters work for details.

Laundry and dishes

Delay-start buttons are your best friend. Load the dishwasher after dinner and set it to start after the peak ends. Many washers and dryers also have delay timers or app scheduling. If your dryer is electric, it’s one of the biggest appliance loads in the home, so it’s worth moving.

Step 5: Add solar and batteries strategically

If you have or are considering rooftop solar, TOU rates change the math. Solar produces most around midday, but peak prices often hit in the evening after production drops.

• A home battery can charge from solar or off-peak power and discharge during the peak. Many battery systems have a TOU mode that does this automatically.
• Export credits may depend on the time of day under newer net billing rules. Our explainer on net metering covers how exports are credited.
• Virtual power plant programs may pay battery owners to discharge during grid stress; see what is a virtual power plant.

For backup plus bill savings, read how home battery backup works.

Where to start: a 30-minute setup plan

You can set up most of your savings in one evening:

1. Look up your rate plan and write the peak hours on a sticky note for the fridge.
2. Set your EV charging schedule to start after the peak ends.
3. Program your thermostat to pre-cool or pre-heat before the peak and ease off during it.
4. Set a water heater timer or adjust your heat pump water heater’s schedule.
5. Practice delay-start on the dishwasher and washer for a week until it becomes habit.
6. Check your usage data after 1 billing cycle to see whether peak use dropped.
7. Compare plans with your utility’s tool once you have a few months of data.

The bottom line

Time-of-use rates reward you for using electricity when it’s cheaper for the grid to supply. You don’t need to give up comfort or watch the clock. Learn your utility’s peak window, then let your EV, thermostat, water heater and delay-start buttons handle the shifting. Check your results after a billing cycle and adjust. For the bigger picture on rising utility costs, see why electricity bills are rising, and look up rate terms in the glossary.

Sources

• US Department of Energy, FEMP: Demand response and time-variable pricing programs — definitions of time-of-use, real-time pricing and demand response
• PG&E: Time-of-Use Rate Plans — E-TOU-C peak window of 4 to 9 p.m. every day
• PG&E Electric Schedule E-TOU-C (tariff) — official peak hours and seasons
• Xcel Energy Colorado: Time of Use pricing — weekday 5 to 9 p.m. on-peak window
• DOE Alternative Fuels Data Center: Electricity basics — scheduling EV charging for off-peak hours and off-peak residential rates