Peak and Off-Peak Energy Explainer: Find the Best Time to Use Electricity and Save Money

Time-of-use utility plans charge more for energy during peak hours.

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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…

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