What is Time-of-Use?
Simply put, electricity will be no longer priced and sold in tiers, but rather priced instead at the ‘time’ you buy it. Hot summer days will be more expensive than cool winter ones because winter will be cheaper than summer. Running the AC at 4pm on a hot Tuesday in July will cost more than running it at the same time on Sunday because weekends will be cheaper than weekdays. In fact, nights will be cheaper than days for six months out of the year and holidays will be cheaper than non-holidays all year long. This is time-of-use or TOU. It’s no longer just about how much electricity you consume, but how much AND when.
Why Should I Care About Time of Use?
This notice on Southern California Edison’s website says it all: NOTICE: The California Public Utilities Commission requires us to begin switching customers to Time-Of-Use (TOU) Plans in 2018. This change will be a multi-year effort. You will receive multiple communications in advance of being switched. California homeowners with our high electric bills will be dramatically impacted by this state mandate. There hasn’t been a better time to install residential solar panels!
Why is the state mandating TOU for all California homeowners?
Our Time-Of-Use plans are part of a statewide initiative designed to keep the electric grid reliable even when energy resources are in high demand. Such rate plans encourage homeowners to cut their electricity use during expensive ‘high demand’ windows. If you would like to continue running your AC on hot summer days for affordable rates, now is the time to considering installing solar on your home.
Tips for Saving the Most With TOU and Solar Panels
If possible, plan your electricity usage during the lowest cost time of day on weekdays, as well as weekends. For example, run your pool pump at night or first thing in the morning before peak rates hit.
Do any and all energy efficiency upgrades to your home that you can afford to do. This will be money well spent in a post Time-of-Use world.
Install solar panels. Solar technology produces the most electricity during peak rate times when installed to maximize western exposure to sunlight.
This is a very important consideration for homeowners installing solar panels in areas where peak summer rates can last until 8pm in the evening (see SCE TOU rate chart above).
Time of Use billing with late evening peak rates makes installation of solar on eastern exposures far less valuable than under traditional tiered billing.
For example, solar produced on an east facing roof is now worth $0.28 per kilowatt hour while the same energy produced on a west roof is worth $0.45 per kilowatt hour during summer "peak" times.
While we can't control the orientation of our roof planes (they are what they are), SolarShoppers recommends starting with west facing roofs, then south facing, and only use east facing roofs if absolutely necessary.
Our goal is to install smart solar that saves our customers the most money and provides the most relief from high electric bills. With new rules, east facing solar has become less valuable.