How to Use Time of Use programs and Solar Power to Reduce Your Energy Bill

Time of use (TOU) plans are special billing programs offered by utility companies and are great for people who have installed solar and are not using a lot of electricity during peak hours. A TOU plan doesn’t change your rates based on how much energy you use, but rather based on WHEN you use that electricity. You get charged more for peak hours, and less for off-peak.

What are peak hours?

There is a higher rate during peak hours, when the demand on the grid is highest, and a lower rate during the evening and weekends. The definition for them, however, differs by utility company.  For Southern California Edison peak hours are between Mon-Fri 10am-6pm and for the LADWP are between Mon-Fri 1:00 p.m. and 5:00 p.m.

 

How does of a time of use energy program work for solar? 

During the day, especially during the longer days of summer, your solar panels generally produce more electricity than your house needs. So you send the extra energy back to the grid and get a credit for each extra kwh that you send back. At night, when the sun isn’t shining and your solar panels aren’t producing, you pull your electricity from the grid, and you use up your credits. This is basically net metering.

Utility buys your energy

Because the utility needs your electricity most during the day, your utility company is willing to  “pay up” for your extra electricity when you switch to a TOU plan. They will pay you the higher “peak rate” which can be as much as 2x your regular rate for your electricity.  So you build up dollar credits based on peak rates, rather than credits based on kilowatt hours.

  

Nightime rates

Here’s where it gets good. At night, when the sun isn’t shining and you buy some or all of that power back, you buy it back at the cheaper night time rate. In other words, you buy low, and sell high!  Instead of getting 1 kwh back for every extra 1 kwh you produce, you can get up to 2:1.  It’s like getting 30% extra production out of your solar system!  That’s Time of Use. 

Los Angeles Time of Use programs with the LADWP
The Department of Water and Power's (DWP) Residential Time-of-Use Program offers electricity to customers at three different rates. The prices are based on the time of day when the electricity is actually used, unlike the standard rate when the price for electricity is always the same.

All residential customers have the option to switch to TOU pricing, which requires a special meter that tracks the time of day the customer uses energy. Residential customers whose monthly energy use exceeds 3,000 kWh are now required to use TOU pricing, which encourages energy conservation and can help lower a customer’s bill.

To learn more about LADWP’s program, visit their TOU page here or download their PDF here.

Southern California Edison Time of Use programs

Southern California Edison (SCE) offers Time of Use programs to existing customers only.  TOU with SCE is different than LADWP because it has only two pricing “Levels”.

 


In addition SCE splits charges into two categories:

• Energy Charges per kWh consumed that vary by season and time of day.
• Basic Charge that covers a portion of costs for services such as meter reading and customer billing.

To learn more about SCE’s program, visit their TOU page here.


Plan time of use into your solar design

Properly factoring in TOU into your initial solar panel design can decrease your system size because of the extra savings. So you want to make sure you have just enough solar power to get your bill close to a zero, but not lower than that.