My Austin Energy bill shows three different prices for electricity depending on when I use it. From 9 PM to noon the next day: $0.078\/kWh. From noon to 6 PM: $0.096\/kWh. From 6 PM to 9 PM \u2014 the peak window \u2014 $0.177\/kWh. More than twice the off-peak rate, for electricity used during the same three hours every weekday evening.<\/p>\n\n\n\n
Time-of-use (TOU) pricing is spreading across US utilities, and it changes the solar economics conversation in ways that most install-day pitches don’t fully address. The interaction between when your panels produce, when you consume electricity, and what you pay at different hours can either significantly improve or modestly undercut the returns you expect from a standard production estimate.<\/p>\n\n\n\n
Here’s how TOU works with solar, why it makes batteries considerably more valuable, and how I’ve adjusted our household habits to get the most out of the structure.<\/p>\n\n\n\n
Traditional residential electricity pricing is flat \u2014 you pay the same rate per kWh whether you run the dishwasher at 2 AM or 7 PM. TOU pricing reflects the actual cost of electricity on the grid, which varies significantly by time of day.<\/p>\n\n\n\n
Peak demand on most US grids occurs in the late afternoon and evening \u2014 roughly 4\u20139 PM, when businesses are still operating and households are cooking, running AC, and charging devices after the workday. Generating capacity during these hours costs more because utilities must bring expensive “peaker plants” online to meet demand. TOU pricing passes those costs to consumers who use electricity during peak hours, and discounts electricity used during low-demand overnight and midday hours.<\/p>\n\n\n\n
From the utility’s perspective, TOU pricing is a demand management tool. From a solar homeowner’s perspective, it’s a pricing structure that has asymmetric effects depending on when your solar produces vs. when your household consumes.<\/p>\n\n\n\n
Here’s the structural challenge: solar panels produce primarily during midday hours, when TOU pricing is typically in the mid or off-peak tier. The peak window \u2014 the most expensive electricity \u2014 falls in the late afternoon and evening, after solar production has declined significantly or stopped entirely.<\/p>\n\n\n\n
A simplified example with Austin Energy’s rate structure:<\/p>\n\n\n\n
Without TOU awareness:<\/strong><\/p>\n\n\n\n The gap:<\/strong> You’re exporting cheap (mid-peak) power and importing expensive (peak) power. The net metering credit you earn for exports offsets some of your peak imports, but if the export rate is below retail \u2014 as it is for most utilities \u2014 you’re selling low and buying high.<\/p>\n\n\n\n Under full retail net metering, this mismatch matters less because every exported kWh is worth exactly as much as every imported one. Under reduced-rate net metering or net billing with below-retail export rates, the mismatch compounds the export penalty.<\/p>\n\n\n\n This is the core financial argument for battery storage that goes beyond backup power, and it’s the one that became most clear to me after adding the Powerwall.<\/p>\n\n\n\n With a battery, the system logic changes:<\/p>\n\n\n\n Midday:<\/strong> Panels produce surplus beyond household load. Instead of exporting to grid at the export rate, the battery charges \u2014 storing solar energy for later use.<\/p>\n\n\n\n Peak window (6\u20139 PM):<\/strong> Battery discharges, covering household load at the moment when grid electricity costs $0.177\/kWh. The effective value of each stored kWh is the peak rate \u2014 not the export rate.<\/p>\n\n\n\n The math improvement: if I was exporting midday surplus at $0.077\/kWh (Austin Energy’s approximate export rate for net excess generation) and instead store it for peak-hour self-consumption at $0.177\/kWh, each kWh stored is worth $0.177 rather than $0.077 \u2014 a 130% increase in value per kWh, before accounting for the battery’s round-trip efficiency losses.<\/p>\n\n\n\n Over a year of daily cycling, this adds up. My Powerwall 2 stores an average of 8\u201310 kWh of solar surplus per day during summer months. Redirecting that from grid export to peak-hour self-consumption represents roughly $300\u2013$400\/year in additional savings beyond what a solar-only system would achieve in our TOU rate environment.<\/p>\n\n\n\n That’s part of why the Powerwall’s two-year ROI calculation<\/a> looks better in a TOU environment than in a flat-rate utility territory. The battery doesn’t just provide backup \u2014 it arbitrages the price difference between midday solar production and evening peak consumption.<\/p>\n\n\n\n You don’t need a battery to benefit from TOU awareness. Load shifting \u2014 deliberately moving discretionary consumption to off-peak or solar production hours \u2014 achieves a version of the same result through behavior rather than hardware.<\/p>\n\n\n\n High-value loads to shift to midday (9 AM\u20136 PM):<\/strong><\/p>\n\n\n\n Not all TOU structures favor solar equally. The key variable: where the peak window falls relative to typical solar production hours.<\/p>\n\n\n\n Afternoon peak (4\u20139 PM):<\/strong> The most common structure in the US. Solar doesn’t directly cover this window but a battery can. The off-peak midday rate reduces the value of solar self-consumption slightly but the battery arbitrage opportunity is strong.<\/p>\n\n\n\n Midday peak (11 AM\u20133 PM):<\/strong> Less common but exists in some utility territories. This is the most solar-favorable TOU structure \u2014 your panels produce at peak rate hours, maximizing the value of self-consumption without needing a battery to time-shift.<\/p>\n\n\n\n Super-off-peak rates for EV charging:<\/strong> Some utilities (including PG&E in California and SDG&E) offer super-off-peak rates for overnight EV charging \u2014 as low as $0.05\u2013$0.08\/kWh from midnight to 6 AM. If your utility offers this, overnight EV charging may be cheaper than midday solar charging \u2014 but only for the EV, not for household loads.<\/p>\n\n\n\n Many utilities offer both flat-rate and TOU rate options for residential customers, with the ability to switch periodically. Whether TOU is better depends on your specific load profile.<\/p>\n\n\n\n TOU is favorable for solar customers when:<\/p>\n\n\n\n TOU is less favorable when:<\/p>\n\n\n\n The way to model this: pull 12 months of your hourly interval data (most smart meter utilities provide this through their online account), overlay the TOU rate tiers, and calculate what you’d have paid under each rate structure. Austin Energy provides this tool directly. PG&E, Xcel, and most large utilities do as well.<\/p>\n\n\n\n TOU pricing is not inherently good or bad for solar homeowners \u2014 it’s a pricing structure that rewards those who align their consumption with when energy is cheap and penalizes those who don’t. A solar-only system in a TOU territory captures off-peak and shoulder savings but still faces peak-rate imports in the evening. A solar-plus-battery system in a TOU territory is in the best position of anyone on the rate: producing at low-cost hours, storing for high-cost hours, and paying almost nothing annually for grid electricity.<\/p>\n\n\n\n If you’re in a TOU territory and considering solar, factor the peak window into your battery decision. The arbitrage value of storage is real and measurable \u2014 in my case, it accounts for roughly 15\u201320% of my total annual electricity savings. That number would be higher in utility territories with larger peak-to-off-peak rate spreads than Austin Energy’s.<\/p>\n\n\n\n The households that do best with solar under TOU pricing are the ones that treat their energy system like a financial asset \u2014 paying attention to when they consume, adjusting schedules where possible, and letting the battery handle what behavior change can’t. It takes some initial setup and attention. After that, it mostly runs itself.<\/p>\n\n\n\n \u2014 Allen<\/p>\n","protected":false},"excerpt":{"rendered":" My Austin Energy bill shows three different prices for electricity depending on when I use it. From 9 PM to noon the next day: $0.078\/kWh. From noon to 6 PM: $0.096\/kWh. From 6 PM to 9 PM \u2014 the peak window \u2014 $0.177\/kWh. More than twice the off-peak rate, for electricity used during the same … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":49256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[190],"tags":[],"class_list":["post-49232","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-residential-solar-energy"],"_links":{"self":[{"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/posts\/49232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/comments?post=49232"}],"version-history":[{"count":1,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/posts\/49232\/revisions"}],"predecessor-version":[{"id":49233,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/posts\/49232\/revisions\/49233"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/media\/49256"}],"wp:attachment":[{"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/media?parent=49232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/categories?post=49232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/entellusapparel.com\/blog\/wp-json\/wp\/v2\/tags?post=49232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n\n\n\nHow a Battery Closes the Gap<\/h2>\n\n\n\n
\n\n\n\nLoad Shifting: The Free Version of TOU Optimization<\/h2>\n\n\n\n
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\n\n\n\nTOU Rates That Help vs. Hurt Solar Economics<\/h2>\n\n\n\n
\n\n\n\nShould You Switch to TOU If Your Utility Offers a Choice?<\/h2>\n\n\n\n
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\n\n\n\nThe Honest Summary<\/h2>\n\n\n\n