Save $1,200 Yearly: Time of Use Rates With Solar

Your utility company is making an extra $1,200 a year off solar homeowners who don’t understand time-of-use pricing. That’s not a scare tactic. That’s what I’ve watched happen, repeatedly, when someone installs a perfectly good 8kW system and then exports power at 3 cents per kWh while buying it back at 42 cents six hours later. The math hurts.

Time-of-use (TOU) rates are the single biggest variable most solar installers don’t explain clearly, and I say that as someone who has been on both sides of this. When I ran electrical for new construction, the utility rate structure was someone else’s problem. Now that I’m helping homeowners size and optimize systems, I spend more time on TOU strategy than on almost anything else. Getting it wrong is expensive. Getting it right can dramatically change your payback timeline.

The core idea is simple enough: your utility charges different prices for electricity depending on when you use it. Peak hours (usually late afternoon through evening) cost more. Off-peak hours (nights and early mornings) cost less. On-peak rates in states like California and Arizona currently run anywhere from 38 to 55 cents per kWh, while off-peak rates might be 11 to 18 cents. Your solar panels, meanwhile, produce the most power between 10 a.m. and 2 p.m., which is exactly when demand is moderate and rates are only middling. This mismatch is the whole problem.

Why the Solar Production Window Is the Wrong Window

Here’s what most people don’t realize when they’re being shown the shiny system quote: solar production peaks don’t line up with peak electricity prices. They’re offset by roughly four to six hours.

In California, PG&E’s current E-TOU-C rate schedule puts peak pricing from 4 p.m. to 9 p.m. Your panels are winding down right as the expensive hours begin. You spent all day exporting energy to the grid at, say, 8 cents per kWh under net energy metering, and now you’re buying it back at 47 cents. According to EnergySage’s market data, the average California solar homeowner without storage currently has an annual net metering credit of only $180–$300 because the buy-back rates for midday exports have dropped substantially since NEM 3.0 took effect. Before NEM 3.0, that same homeowner might have seen $900–$1,200 in credits. The policy change explicitly assumed homeowners would add batteries. A lot of them didn’t.

I thought for years that a well-sized solar system would more or less handle TOU automatically. Then I pulled the actual 12-month billing data on a system I’d helped a neighbor in Fresno install in 2023, a nice 9.6kW setup, good equipment, proper orientation. His annual electric bill was still $1,440. Not because the system underperformed. It produced exactly what we modeled. It was because he was exporting power cheaply and importing it expensively. That moment genuinely changed how I talk to clients.

What Battery Storage Actually Does Here

Helpful resource: Emporia Vue 2 Home Energy Monitor is a top-rated option for this. (As an Amazon Associate this site earns from qualifying purchases.)

A battery doesn’t just give you backup power. In a TOU context, it’s a financial arbitrage tool. You charge it when electricity is cheap (or free, from your panels), and you discharge it when electricity is expensive. Done right, this is worth real money.

Take a homeowner in Phoenix on APS’s Saver Choice Max plan. Peak rate: $0.499/kWh from 4–9 p.m. weekdays. Off-peak rate: $0.103/kWh. If they have a 13.5 kWh Tesla Powerwall 3 and use 10 kWh during that peak window from stored solar energy instead of grid power, that’s a daily savings of about $3.96 during summer months. Across a 120-day Arizona summer peak season, that’s roughly $475 from that window alone. Add spring and fall partial seasons, and you’re looking at $600–$800 per year in direct TOU arbitrage value from a single battery.

Scenario 1: San Diego homeowner on SDG&E’s TOU-DR1 plan, 10kW solar, no battery. Midday exports credited at $0.09/kWh. Peak import rate at $0.58/kWh. Annual net bill: $1,870. Added a single Powerwall 3 ($11,500 installed), configured to reserve charge for the 4–9 p.m. window. Annual net bill dropped to $310. Payback period on the battery: approximately 9 years at current rates, but shorter if rates keep climbing (they historically have, averaging about 3.5% annually per EIA data).

Scenario 2: Homeowner in Austin on Austin Energy’s Value of Solar TOU tariff, 7kW system, no storage. TOU peak is 2–7 p.m. This is actually closer alignment with solar production than California’s schedule, so the mismatch is smaller. Annual bill savings from solar alone: $1,640. Adding a battery here had a payback of 14+ years. My honest take: skip the battery if you’re in Austin. Your rate structure is friendlier to solar-only setups.

That second example matters. The answer to “should I add a battery for TOU optimization?” is genuinely utility-specific. Don’t let any installer give you a generic yes.

The Free Optimization That Most People Skip

Before you spend $10,000 on a battery, spend 45 minutes on appliance scheduling. I’m serious.

The average U.S. household’s dishwasher, clothes washer, clothes dryer, and EV charger represent roughly 30–35% of daily electricity consumption according to the U.S. Department of Energy’s residential energy use data. Every one of those loads is schedulable. You don’t have to run the dishwasher at 6 p.m. when peak rates are running. Run it at 10 a.m. when your panels are cranking and your rate is at its lowest.

Most modern dishwashers (Bosch, Miele, even mid-range LG models) have delay-start built in. EV chargers like the ChargePoint Home Flex or the JuiceBox 48 (available on Amazon, and yes, the site may earn a commission) let you set scheduled charging windows from an app. Set it to charge between midnight and 6 a.m. and you’re consistently using your cheapest grid electricity for your highest-draw device.

I tested this with a reader in Sacramento who drives a Chevy Bolt. He was charging every evening between 5 and 9 p.m., dumping about 30 kWh into the car four nights a week at peak rates. Shifting to overnight charging alone saved him $71 in the first month. $852 in a year. Zero hardware investment.

The home energy monitor category on Amazon has some legitimately useful tools here. A device like the Emporia Vue 2 (around $109–$129) gives you circuit-level visibility into exactly when and where you’re using power. Once you see that your dryer runs a 5,400-watt heating element, it gets easier to feel motivated about scheduling.

Comparing TOU Rate Structures by State

This is where it gets genuinely complicated, because there’s no national standard. Here’s what current TOU peak windows and rates look like across several major markets, as of August 2026:

What jumps out: Arizona has the most punishing TOU spread (roughly 5:1 ratio), and it has a narrow peak window that barely overlaps with peak solar production. Massachusetts has a wide on-peak window but a smaller rate differential. These differences completely change the battery ROI calculation.

Actually Reading Your Rate Schedule

This is where people’s eyes glaze over, but it’s a 20-minute task that can reframe every decision you make about your system.

Go to your utility’s website and find the residential rate schedules page. You’re looking for the tariff sheet (often a PDF), not the marketing summary. The marketing summary will say something cheerful like “save during off-peak hours!” The actual tariff sheet will tell you: exact peak windows (including whether they change by season), whether weekends and holidays are treated differently, and what the net metering or export credit rate actually is. These are different things. A lot of homeowners don’t realize their utility has a separate, lower “export rate” for solar that’s distinct from the retail rate they’d pay to buy that same power back.

In my experience, about 60% of the homeowners I’ve talked to don’t know what their current rate schedule is named, let alone what the peak window hours are. Your installer should walk you through this. If they don’t ask which rate plan you’re on during the consultation, that’s a red flag worth noting.

Sources

• U.S. Department of Energy, Homeowner’s Guide to Going Solar: Baseline data on residential solar economics and rate structures.
• EnergySage Solar Market Intelligence Report: Current installer pricing, system sizing benchmarks, and NEM 3.0 impact data.
• U.S. Energy Information Administration (EIA), Residential Electric Rates: Historical rate trends, including the ~3.5% annual average rate increase used in payback calculations.
• Lawrence Berkeley National Laboratory, Tracking the Sun: Installed cost and system performance data for residential solar in the U.S.
• CPUC NEM 3.0 Decision (D.22-12-056): The California ruling that restructured export compensation and made battery storage economics far more important.

The uncomfortable truth about TOU solar optimization is that it requires you to actually understand your utility bill, which the utility industry has never made easy. That’s not cynicism, it’s just how rate structures have been designed historically. But once you’ve got your peak window nailed down and your schedulable loads shifted, the ongoing effort is minimal. The Fresno neighbor I mentioned earlier? He called me last spring. His annual bill had dropped from $1,440 to $390, and all he’d done was add a small battery and set his EV charger to overnight. Sometimes the simple version actually works.

Photo: Melike B via Pexels

Recommended Resources

Disclosure: As an Amazon Associate, we earn a small commission from qualifying purchases at no extra cost to you. We only recommend products that genuinely support the topics covered in this article.

• Renogy 200W Solar Starter Kit + 30A Charge Controller (~$169), Complete beginner solar kit, 200W monocrystalline panel, charge controller, and mounting hardware included.
• Renogy 2×100W Monocrystalline Solar Panels (~$99), Expandable 200W panel set from the most trusted DIY solar brand, used widely in off-grid and home backup systems.