Time-of-Use Electricity Rates Explained: Peak vs. Off-Peak
On a time-of-use plan, the price of a kilowatt-hour depends on the hour you use it. Electricity costs most in the late afternoon and early evening, when demand is highest, and least overnight. Whether that helps or hurts depends on what you can move.
Key points
- The price of a kWh depends on the hour: highest in the early evening, lowest overnight.
- Only large, flexible loads are worth moving: car charging, laundry, dishwasher, pool pump.
- The saving is the kWh you move multiplied by the gap between peak and off-peak prices.
How a time-of-use plan works
A standard plan charges the same price for every kWh. A time-of-use (TOU) plan divides the day into two or three periods:
- Peak (on-peak). The most expensive hours, usually late afternoon into the evening on weekdays, when people come home, cook and switch on the air conditioning.
- Off-peak. The cheapest hours: overnight, and often weekends and holidays.
- Mid-peak or shoulder. Some plans have an in-between price for the remaining daytime hours.
The hours and prices are set by each utility, and many change them between summer and winter. The illustration above is only an example; the exact schedule for your plan is on your bill or your utility's website.
Why utilities use them
The electricity system has to be built for the busiest hour of the year, and the last power plants switched on to meet that peak are the most expensive to run. Charging more at peak times and less at night encourages customers to spread their use, which is cheaper for everyone than building plants that sit idle most of the year. In states with a lot of solar power, the costly hours have moved later, to the early evening, when the sun is setting but demand is still high.
What is worth shifting
Only appliances that use a lot of energy and can wait are worth moving. Lights, the television and the refrigerator cannot wait, and they use little anyway.
| Appliance | Energy per use | Easy to shift? |
|---|---|---|
| Electric car charging | About 11 kWh for a typical day's driving | Yes: set a charging schedule |
| Clothes dryer | About 3 kWh per load | Yes |
| Dishwasher | About 1.2 kWh per cycle | Yes: use the delay-start button |
| Electric water heater | Several kWh a day | With a timer |
| Pool pump | About 12 kWh a day | Yes: change the timer |
| Air conditioning | The largest summer load | Partly: pre-cool before the peak |
Air conditioning is the difficult one, because the hottest hours overlap the peak. Cooling the house an extra degree or two before the peak starts, then letting the temperature drift up during it, moves some of the use without giving up comfort.
Working out the saving
Take the energy you can move and multiply by the gap between your peak and off-peak prices. Suppose your plan charges 30 cents at peak and 12 cents off-peak, a gap of 18 cents:
- Five dryer loads a week moved off-peak: 3 kWh × 5 × 4.33 weeks = 65 kWh a month, saving about $11.70.
- Charging an electric car overnight instead of at 6 p.m.: about 330 kWh a month, saving about $59.
The calculators on this site can do this for your own numbers. Tick "My price changes with the time of day" under any calculator, enter your peak and off-peak prices and how many of the hours fall at peak, and the result uses the average price you would actually pay.
When a time-of-use plan costs you more
A TOU plan is not automatically cheaper. It tends to cost more if someone is home all day in summer with the air conditioning on, if you cook dinner with electric appliances during the peak every day, or if you have little that can be moved. It tends to save money if you have an electric car, a pool pump, or a flexible routine.
Before switching, ask your utility whether it offers a bill comparison. Many can show what your last twelve months would have cost on each plan, and some guarantee the first year against the standard rate.
Tiered rates are different
On a tiered plan the price depends on how much you have used in the month, not on the hour. Once you pass the first block of kWh, the rest are charged at a higher price. Some utilities combine the two. If you are on tiers, the price of running an extra appliance is the price of your highest tier, not the average. How to read your electric bill explains where to find it.
Frequently asked questions
What are peak hours for electricity?
They vary by utility and season, but most plans put the peak in the late afternoon and early evening on weekdays, for example 4 p.m. to 9 p.m. Overnight hours, and often weekends, are off-peak. Check your own plan for the exact times.
Is it cheaper to run appliances at night?
Only if you are on a time-of-use plan. On a standard flat-rate plan a kWh costs the same at any hour.
Is a time-of-use plan worth it?
It is usually worth it if you can move large loads such as electric car charging, laundry, dishwashing or a pool pump to off-peak hours. It can cost more if most of your use is air conditioning and cooking during the peak.
Sources
- U.S. Department of Energy, Energy Saver: Appliances and Electronics
- U.S. Energy Information Administration, Electric Power Monthly (state electricity prices)
Electricity prices are the EIA figures for July 2026. Wattages are typical values; check the label on your own appliance.
Keep reading
- How to Calculate the Electricity Cost of Any Appliance
- How to Read Your Electric Bill and Find Your Real Price per kWh
- 12 Ways to Lower Your Electric Bill, Ranked by How Much They Save
- What Uses the Most Electricity in a Home? Biggest Loads Ranked
- kW vs. kWh: The Difference, in Plain English
- Standby Power: What "Phantom Load" Really Costs
- Why Electricity Costs More in Some States Than Others
- How to Find the Wattage of Any Appliance
- Electricity rates by state