Peak and Off-Peak Energy Explainer: Here’s the Cheapest Time to Use Electricity

Energy prices are still high across the nation, and many people experience soaring electricity costs in the summer due to increased air conditioning and fan usage. To cut down on costs and reduce your electric bill, you’ll want to be mindful of how and when you use electricity. The energy you use at home doesn’t always cost the same every hour of the day. While the price of electricity remains steady for standard electricity plans, 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, which means you can actually save money by running appliances like your dishwasher or washing machine during off hours.

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 of off-peak hours and timing your electricity use to the periods when electricity is at its cheapest. We’ve also got tips on the best time of day to do laundry to save money, and how to lower your water bill.

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 when electricity demand is the highest. During this time, you will be paying the highest amount per kilowatt-hour 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. Peak hours are a bad time to do tasks that can wait. If you’re running large appliances, whether it’s your dishwasher or washing machine, it’s going to cost you extra during peak hours.

What are off-peak hours?

In contrast to peak hours, off-peak hours are the times when electricity prices are cheaper. This is typically the case because fewer people are trying to access the grid during these hours, meaning there is less overall demand and you won’t have to pay a premium for each kWh that you use.

Off-peak hours are a great time to do those more energy-intensive tasks that you may have waiting for you. While it might not be the most convenient, if you happen to be home during off-peak hours, you can save money on your monthly electricity bill by timing your tasks to these time frames.

Why do utility companies use time-of-use rates?

Utility companies know when stress on the grid is going to be at its highest. To make sure the grid can serve all of these customers, they need to make sure that power plants are operational and meeting all of the demand. When demand increases, these companies may have to generate more electricity, which can cost more. They either need to generate that power in advance to meet the peak or purchase extra energy from other sources. That additional expense is passed on to the consumer through time-of-use rates, which charge you more when you use electricity during peak hours.

When are peak hours?

Peak hours vary depending on the time of year and region of the country. As a general rule, think of peak hours as the time during which most people are getting home from work for the day. This is when people are turning on their lights, firing up their TVs and settling into their homes for the night — all of which require more electricity than usual. 

Here’s an overview of peak and off-peak hours by Eastern, Central, Mountain and Pacific time zones.  Note that select states may have different time of use schedules, be sure to select your state from the menu on your provider’s website if applicable.

Additional money-saving tips

Typically, weekends are considered to be off-peak hours for the full day. This means that if you can time your energy-intensive tasks to Saturday and Sunday, you can typically save yourself some money when it comes to your monthly energy bill. Equipped with the knowledge of when peak hours occur and what times are considered to be off-peak hours, you can figure out how to time your use of major appliances to off-peak hours and keep your energy costs down. You can also consider purchasing tools like a solar battery that will provide you with an energy reserve so you don’t have to draw from the grid during peak hours.

You can also use this knowledge to save more by minimizing the amount of electrical usage that you require during peak hours. You can unplug your appliances that you aren’t using, make sure that your thermostat is set properly so your furnace is not running as much during peak hours, and utilize “sleep” mode on things like your computer and TV to make sure they aren’t using unnecessary electricity that will cost you more. You may also want to consider using motion sensors in your home that can be equipped to interact with other electronic devices. For example, if you aren’t home, there is no need for your lights to be on. Setting them to a motion sensor would ensure they won’t turn on unless you’re home and moving around.