If you have ever opened up an electricity bill to find that your utility company has charged you more than you expected due to energy used during “peak hours”, or if you are a homeowner that is looking into which type or rate plan to use, you’re going to want to know the ways you can avoid or offset these higher-than-average electricity charges.
Of course, solar is a great way to reduce your overall grid-supplied energy usage, but before we get into that, let's cover how these time-of-use rates work, as well as how you can reduce peak energy usage across the board.
Time-Of-Use Rates at a Glance
While there is usually lots of grid-supplied energy to go around, if there is too much demand at one time, the grid will be stressed and could overload. This leads to broken equipment, blackouts, brownouts, and in extreme cases, wildfire. In order to cut down on high demand events like these, and to ensure everyone can keep their lights on, utility companies across the country have started raising electricity prices during times of high demand.
Peak Demand Times
So, when is it that your electricity company might bump up its rates? It primarily depends on the climate. Here in Colorado and Texas, this is the time you are most likely to use your heating and cooling equipment, and run your energy-guzzling appliances like the oven, dishwasher, and dryer.
Peak demand times will vary depending on your electricity provider and the season, but in general, the winter peak demand will be between 4 pm and 9 pm, and the summer peak demand is usually between 2 pm and 7 pm. For example, if you're an Xcel utility customer here in Denver, winter and summer peak hours are between 2 pm and 6 pm on weekdays and the peak rates change for winter and summer seasons.
Tips To Avoid Peak Demand Charges
Before going solar, the way to avoid these peak demand charges is in one word: shift.
The more habits you can shift from peak demand time to other times of the day when electricity is cheaper, the less you will pay in time-of-use rates. Here are a few tips:
Do your laundry in the morning if possible
Adjust/program the temperature on your thermostat for efficiency during peak demand
Run the dishwasher overnight
Increase home insulation and air sealing to improve overall home efficiency
Shift showers and other hot water usage to the mornings
Shift oven use to before peak demand when possible
Use natural light instead of overhead lights whenever possible
Unfortunately, not all of these tips are going to be feasible for every home and every family. However, there is another way to reduce and offset grid-supplied peak demand—renewable, solar energy!
How Solar and Solar Batteries Reduce and OffsetTime-Of-Use Rates
With a properly designed and installed solar PV (photovoltaic) system installed on your roof or property, your home will be running on free, renewable solar energy while the sun is up. And while your home will still be connected to the grid for the times when your solar panels are not converting sunlight to electricity, the solar energy your panels create during the day can both reduce and offset the cost of any energy you need to buy from the grid.
Solar energy can supply electricity for a large portion of most peak demand hours. Plus, for areas that allow for net metering, any excess energy that is converted will be bought back by the electricity company for a credit on your bill. Here at CAM Solar, we find that for most situations, this credit results in a near or below zero balance on an electricity bill for the lifetime of the system.
Adding Battery Storage
If you want to take your home energy a step further and eliminate your need for an electricity bill as well as the risk of experiencing a grid blackout, you can add battery storage to your new or existing solar PV system. Solar batteries don’t offset electricity charges, they nearly do away with them by saving any excess energy produced during the daytime, and dispersing it overnight and during peak hours. This ensures your home is making full use of all the renewable electricity your solar panels generate, gives you access to reliable electricity 24/7, and eliminates your energy costs!