What is Peak and Off Peak Electricity?

Not everyone pays a flat rate for the electricity they use. Many households are on a Time-of-Use (TOU) pricing plan, where the cost of electricity changes throughout the day. During peak hours, electricity is more expensive, while off-peak hours offer lower rates.

However, the exact timing of peak and off-peak hours isn’t the same for everyone. Several factors influence this schedule, and there are different ways to take advantage of the cheaper electricity times.

In this article, we’ll go in-depth into the difference between peak and off-peak electricity, explain when these periods occur, and provide practical savings tips on how to minimize peak electricity use and make the most of off-peak hours.

The Difference Between Peak and Off-Peak Electricity

The main difference between off-peak and off-peak electricity rests on two things: when you’re using electricity and how much it costs during that time.

Peak hours are the times of day when electricity demand is highest, usually from around 3 PM to 9 PM. When we wake up and get ready in the morning, and come home from work or school, we’re likely to power multiple appliances at once.

The electricity grid can become strained, and generating such power comes with higher costs, which the utility company passes to you.

On the other hand, off-peak hours span from late at night to early morning (typically 10 PM to 7 AM the next day) when fewer people are using electricity. Since demand is lower during these hours, the cost of generating and delivering electricity is cheaper, and so is the price you pay.

That means, the more you use energy during peak hours when electricity is most expensive, the higher your electric bill will be. Whereas, if you do energy-hungry tasks during off-peak hours, you’ll pay much less for the same energy usage, and thus, have a lower electric bill.

When are Peak and Off-Peak Hours?

Earlier, we mentioned the general timing of peak and off-peak hours. However, exact schedules can vary depending on several factors.

We’ll get into each one shortly, but just to get the point across, take a look at the table below showing the different TOU schedules for the top 10 states with the highest solar use.

From this table, you might already have an idea of the key factors influencing TOU schedules, which include:

Season

Probably the first thing that stands out from the previous table is how there are different peak hours for summer and winter. Peak hours in the winter start in the morning and extend into the evening. Compare that with peak hours in the summer, which doesn’t start until early afternoon.

And that’s because there’s a high demand for heating systems during the colder months. In fact, many consumers have their heating run continuously throughout the day, which elevates the overall demand even further.

Another thing that factors in is the greater need for artificial lighting. Since winter days are shorter, more energy is needed to adequately illuminate the different rooms in the house, particularly in the early mornings and evenings.

The Utility Company

Utility companies set peak and off-peak hours based on factors like energy demand patterns, climate conditions, and the energy sources specific to the state or region they serve.

This explains why some utility companies offer finer gradations in TOU pricing. For example, Arizona Public Service (APS) offers a “super off-peak” rate during the winter (November to April), which runs from 10 PM to 3 AM.

On the other hand, New York’s Orange & Rockland utility provider features “shoulder peak hours”, which is essentially equivalent to “mid-peak hours”. These hours have rates lower than standard peak hours but higher than off-peak hours.

Day of the Week (and Holidays)

Most utility companies designate weekends as off-peak days because household energy use spreads more evenly throughout the day. Put differently, people often break out of their weekday habits during the weekend, whether that’s waking up later than usual or skipping regular chores.

As for holidays, the same weekend energy patterns apply. Since there’s generally low demand for electricity and fewer chances of prolonged energy spikes, holidays are typically treated as off-peak days as well.

If you’re under a TOU pricing plan but aren’t sure which hours are peak or off-peak, you’ll want to check with your utility company. You can either refer to your billing statement or the company’s website for details, or call them directly for clarification.

Tips to Take Advantage of Peak and Off-Peak Hours

When we say “take advantage”, we mean minimizing your use of expensive electricity during peak hours and maximizing your savings by using cheaper electricity during off-peak hours. Here are some practical ways to make that happen.

Use Smart Technology

Rather than dealing with the mental strain of remembering which appliances to turn on or off at specific times, you can invest in smart technology that automates the process and allows for remote control.

A common example is smart thermostats. These devices can be programmed to align with your preferences.

For instance, if peak hours in your area run from 3 PM to 7 PM, you could set your smart thermostat to pre-cool your home between noon and 2 PM. And by the time peak hours begin, the system can either shut off or switch to a more energy-efficient mode.

Upgrade to Energy Efficient Devices

Many of our appliances at home are essential and can’t simply be turned off during peak hours, such as refrigerators, lighting, and air conditioners in hot climates.

Upgrading to energy-efficient models allows you to keep using these necessities the same way but with less power consumption, which means more savings.

For example, Energy Star-rated refrigerators are said to be 9% more energy-efficient than traditional models. So, the next time you go shopping for one – or for dishwashers, dryers, or other power-hungry appliances – look for the Energy Star logo.

Check for “Energy Leaks”

Staying on the matter of running devices during expensive peak hours, one thing you’ll want to check for is energy leaks. This occurs when energy escapes or is wasted due to gaps or cracks (usually around doors, windows, and other openings), or an overall lack of home insulation.

In this case, your heating or cooling systems work harder and use more energy. And when this goes on during peak hours, you can expect to get a much higher electric bill.

You could manually check for potential energy leaks, although they’re not always easy to spot. The best approach is to request a home energy audit from a certified energy assessor.

Reschedule Energy-Hungry Tasks

If you’re not ready to invest in smart technology or energy-efficient upgrades just yet, you can reschedule energy-hungry tasks like doing laundry, running the dishwasher, or charging your EV to off-peak hours when electricity is cheaper.

This method, however, requires a bit of willpower as you’ll have to make lifestyle changes and reprogram your habits. For example, you can choose to do laundry later at night, but since we’re naturally diurnal beings, it may be impractical for some.

That said, you don’t have to reschedule everything. Some tasks, like charging your phone or regular cooking, won’t move the needle. Instead, focus on power guzzlers in your household.

Consider Going Solar

Another great investment to consider is installing a solar system for your home. Instead of relying on the grid during peak hours, a properly sized solar system can generate electricity and cover your energy consumption during the day.

As for nighttime, solar batteries are beneficial. Any excess energy your panels produce gets stored in your batteries, which you can later use during peak hours at night.

Even in winter, when daylight is limited and your solar panels’ production dips, a solar battery remains valuable. You can charge it during off-peak hours and use the stored energy during peak hours. While you’re still drawing from the grid, at least you’re doing so at a lower off-peak price.

Go Solar and Enjoy Big Savings

As we’ve discussed, installing a solar system tailored to your energy and goals is one of the smartest ways to slash your electric bills. By doing so, you’ll avoid those costly peak hour rates and make the most of affordable off-peak electricity.

If you’re ready to transition to solar, Quote for Solar is here to connect you with certified, top-rated solar installers near you. We’ve thoroughly pre-screened these professionals to ensure they offer high-quality, prompt, and personalized service that homeowners deserve.

All you need to do is request a quote from us, and we’ll provide you with three competitive offers to quickly compare and choose from.

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Jan Watermann Co-Founder, Quote for Solar