Are Time-of-Use Rates Costing You More on Bills?
Utilities across the United States are increasingly shifting customers onto time-of-use (TOU) rate plans. On the surface, these rate designs are marketed as a way to encourage energy conservation, reduce grid stress, and reward customers who adjust their energy habits. But as I have seen in years of reporting on the solar and utility sector, the reality is more complicated. For many households, TOU rates are not creating savings at all. In fact, they are quietly inflating bills, particularly for customers without solar or storage to buffer high-cost evening demand.
This article takes a closer look at how TOU rates work, why utilities are adopting them, and whether they are truly fair. I will also share insights from my past reporting on rate design battles across the country, where utilities and regulators often clash with consumer advocates, solar companies, and ratepayer groups.
Why Utilities Are Pushing TOU Rates
The growth of TOU rates is not random. Utilities have several reasons for promoting them:
- Grid stability: Peak demand puts immense pressure on transmission systems and power plants. TOU rates encourage people to use less when the grid is stressed.
- Integration of renewables: Solar production peaks during midday, which utilities consider "low-cost" hours. TOU rates push customers to use more at those times, soaking up solar generation that might otherwise be curtailed.
- Revenue protection: In my experience covering rate cases, utilities often present TOU as a way to make customers pay their “fair share” of system costs. In practice, it frequently helps utilities maintain revenue as rooftop solar adoption grows.
- Regulatory approval: Regulators sometimes prefer TOU because it aligns with policy goals like reducing emissions or avoiding expensive peaker plants.
What gets lost in this discussion is that TOU plans do not affect all customers equally. Renters, low-income households, and families with inflexible schedules are often stuck using power during expensive windows. That is where the fairness debate heats up.
The Solar Angle
Solar companies often present TOU as a perfect justification for rooftop systems. The sales pitch goes like this: utility rates are rising, TOU makes power expensive in the evening, and solar plus storage can protect you from those spikes. In many cases, that pitch is accurate. I have spoken with homeowners who cut their bills in half by pairing solar with batteries and strategically programming them around TOU schedules.
Yet the story is not always so clean. In some regions, utilities have shifted TOU “off-peak” hours to late at night, rather than the solar-friendly midday window. That limits how much solar alone can reduce costs. Batteries remain the most effective tool, but not every household can afford them.
This is where the industry has to be honest. Solar helps with TOU, but the utility rate design game is constantly changing. What looks like a good deal one year can be undermined by new rules the next. I have covered multiple states where regulators approved TOU structures that eroded the savings solar owners expected.
What You Can Do About It
If you are on or considering a TOU plan, there are a few practical steps to avoid higher bills:
- Audit your load profile: Look at your utility bill or request interval data that shows when you use power. If your biggest loads fall in the evening, TOU may raise your costs.
- Shift what you can: Even modest changes like running the dishwasher at night or pre-cooling your home before peak hours can make a difference.
- Consider solar plus storage: For households with high evening usage, batteries can be a powerful hedge against TOU rates.
- Monitor utility filings: Rate structures change often. Staying informed about proposed changes helps you plan ahead.
- Advocate with regulators: Public comment periods matter. Ratepayer voices have influenced commission decisions in past cases I covered.
Moving Toward Smarter Choices
TOU rates are not going away. Utilities and regulators see them as the future of rate design. Yet whether they save or cost you money depends entirely on your flexibility, your technology choices, and your willingness to adapt. From my perspective, the larger question is whether TOU is truly designed for fairness or simply to preserve utility control over the customer relationship.
For customers, the best defense is awareness and preparation. Do not blindly accept that TOU will save you money. Analyze your own situation, explore technology options, and push regulators to design rates that protect vulnerable households.
Solar and storage can be powerful allies in this landscape, but they are not silver bullets. The real key is staying informed and making choices that fit your specific lifestyle and budget.