Take on Time-of-Use Rates with this Simple Trick

Electricity costs are rapidly increasing, especially when compared to recent inflation rate growth. High prices and even higher demand are leading homeowners to look for some form of relief. But this can be quite tricky when navigating complex rate structures like time-of-use (TOU) rates. So, how do you hack the system? One simple solution revolves around smart energy management.

What are Time-of-Use Rates?

Time-of-use rates are a unique rate structure created by your utility company that determine the price you pay for electricity based on the specific period of time that you consume it. They can be mandatory or voluntary, depending on where you live. The general purpose of time-of-use rates is to curb demand during the times of day when it is highest – usually during the afternoon or evenings. This helps reduce any strain on the electric grid, preventing blackouts. It’s important to note that time-of-use rates can vary depending on times of the week like weekends, seasons and holidays. We recommend you visit your local utility’s website to determine when time-of-use rates occur in your area.

During times of high demand when peak charges apply, the cost of electricity will increase according to your rate plan. This can sometimes be up to double your usual rate. To reduce costs, homeowners are encouraged to reduce consumption or tap into an alternative source of power like a solar battery. Reducing your consumption can be as simple as adjusting your thermostat or putting off that load of laundry. But often, reducing your electricity use during the busiest parts of the day can be easier said than done. Adding a smart energy management system to your home’s energy ecosystem is a great way to mitigate time-of-use rates and, ultimately, your utility bill.

How Can an Energy Management System Help Reduce Time-of-Use Rates? 

Just like the name implies, energy management systems monitor and manage a homeowner’s energy use. There are a few different options out on the market, but their features can vary. When it comes to time-of-use rates, some features are necessary to really make a difference on your electricity bill including real-time data, load management automation and circuit scheduling.  

Watching your electrical consumption in real-time can help you make informed decisions when it counts. For some solutions, real-time data isn’t available. Instead, homeowners need to wait upwards of 10-15 minutes to get a snapshot of their energy use. When it comes to time-of-use rates, 10-15 minutes is a long time to wait and make the necessary changes that alter your utility bill.

While it’s nice to monitor your energy in real-time, it’s even better to reduce the need to monitor it at all. With load management automation, you can sit back and relax when time-of-use rates hit. Since time-of-use is often a predetermined time during the day, many homeowners try to self-monitor their energy use and reduce when needed. But as life goes, things can come up and an unexpected disruption in plans can foil the best of efforts. An energy management system can take the pressure and stress away, so you don’t have to worry about tailoring your lifestyle around time-of-use rates.

Circuit scheduling can be quite handy for this reason. It’s a unique feature that isn’t widely available with energy management systems or smart panels. However, the Lumin Smart Panel does provide homeowners with the ability to create an automation that deactivates any circuits in your home connected to heavy consumers of energy. Examples are your pool pump, HVAC system or EV charger. Most of these appliances need a large amount of energy to run. Some even run in cycles, requiring more electricity to fully power on. Left to their own devices, these appliances can wreak havoc on your energy bill during time-of-use.

With the Lumin Smart Panel, you can schedule these heavy energy consumers to temporarily deactivate during the time-of-use window and resume normal functionality afterwards. Using the Lumin App, you can customize this experience and change it at any time, it’s completely flexible. This will ensure that your entire household’s energy consumption low at times when electricity prices are highest, saving you some serious cash.

What kind of savings can you expect with the Lumin Smart Panel? 

There’s nothing better than a real-world example to help you get a better idea of what your savings could look like with a Lumin Smart Panel. So, let’s take a look at two well-known time-of-use rate structures to get an idea of how an energy management system can help you save — one on the west coast and the other on the east.  

We’ll start with Dominion Energy. This utility company runs a voluntary time-of-use program with three different plans for homeowners to choose from. The pricing is different depending on the season so for this example, we’ll simplify things and look at winter prices during the weekday:

• Super off-peak- the cheapest part of the day, usually in the wee hours of the morning from midnight to 5:00 a.m. Prices during this time are typically around $0.12 per kWh.
• Off-peak- moderately priced electricity, typically in the mornings until late afternoon. However, in this case it goes into the night. With Dominion Energy, off-peak hours occur between 5:00 a.m. and 6:00 a.m., 9:00 a.m. to 5:00 p.m. and then again from 8:00 p.m. to midnight. During these time slots, the pricing is slightly higher than super-off-peak costs. We’re rounding up a bit but the price is about $0.13 per kWh.
• On-peak- the most expensive part of the day. On-peak hours are between 6:00 a.m. to 9:00 a.m. and 5:00 p.m. to 8:00 p.m. You’ll see that the price increases quite a bit to $0.20 per kWh.  

Just looking at this short snippet of time, you can see how challenging it can be to self-monitor your energy use without the help of an energy management system. What we didn’t get into is how prices change on the weekends and holidays as well. But you can dive into it at your leisure on Dominion Energy’s website.

On the west coast, we’ll look at another well-known utility company, Southern California Edison (SCE). This is another voluntary time-of-use rate program that features different pricing structures depending on the season. It’s worth noting that SCE offers a few different time-of-use rate plans depending on your preferences. There are several different variables that determine your time-of-use rate pricing with SCE, but we’ll be simplifying this down by focusing on the 4:00 p.m. to 9:00 p.m. rate structure. Once again, we’ll look at the weekday winter rates. But unlike Dominion Energy, you’ll see some key differences.

• Super off-peak- this again is the cheapest part of the day, from 8:00 a.m. all the way to 4:00 p.m. During this time of day, customers pay $0.35 per kWh.
• Off-peak- these rates occur at night when most homeowners are winding down their day. They start at 9:00 p.m. and go all the way to 8:00 a.m. at $0.39 per kWh.
• Mid-peak- One of the highest costs of the day, mid-peak prices are from 4:00 p.m. to 9:00 p.m. during the winter months, costing $0.51 per kWh. 
• On-peak- This is the most expensive part of the day and doesn’t make an appearance in the winter months. However, homeowners will come across it in the summer when temperatures are high and frequent use of air conditioning is constantly pulling on the power grid. It can be as high at $0.58 during the 4:00 p.m. to 9:00 p.m. timeframe. 

As you can see through these two examples, time-of-use programs can vary greatly but the idea is the same – when you consume less during high demand times, you spend less. The Lumin Smart Panel is extremely effective in helping you do just this. If you’re ready to break free of time-of-use rates, reach out and start your journey to bigger savings.