Time-of-Use Electricity Plans: Who Saves, Who Loses, How to Decide
Updated September 2026
Bottom line: Time-of-use plans charge less overnight and more in the late afternoon, and whether you come out ahead comes down to one question: can you move your big loads? Homes with an EV, a water heater on a timer, or a delay-start habit on the dishwasher and washer routinely save 10 to 25%. Homes whose day peaks at 5 p.m. sharp, with the AC running and dinner on an electric stove, often pay more than they did on the flat rate. Pull a month of hourly usage from your utility's site and run the numbers before you sign anything.
How the spread works
Utilities price by what it costs them to serve you hour by hour. Late afternoon, when everyone gets home and the AC and the oven come on together, is expensive. Three in the morning is nearly free. A time-of-use plan passes that curve on to you: a peak window, usually 4 to 9 p.m. on weekdays, priced at 1.5 to 3 times the off-peak rate, and everything else discounted. Some plans add a super-off-peak block in the small hours priced startlingly low, sometimes under a dime.
Notice what that isn't. It isn't a discount. It's a bet that you can move usage out of the window. The utility is fine either way. You win only if your kilowatt-hours actually migrate to the cheap hours, and plenty of people sign up, change nothing, and pay more.
Put a real bill through it
Say you used 900 kWh last month at a flat 17¢, so $153. The TOU plan on offer is 32¢ from 4 to 9 p.m. on weekdays and 12¢ the rest of the time. Your hourly data (any smart-meter portal will hand it over) shows 30% of your usage falls inside the window, which is typical for a house where nobody thinks about it. That's 270 kWh at 32¢ and 630 at 12¢: $86 plus $76, or $162. You just paid $9 for the privilege of switching.
Now move three things. The water heater goes on a timer and heats at 2 p.m. and again at 10 p.m. The dishwasher gets its delay-start pushed at dinner. Laundry moves to Saturday morning. Your peak share drops to 18%, which is 162 kWh at 32¢ and 738 at 12¢: $52 plus $89, or $141. Twelve dollars better than flat, every month, for the price of three habits.
Add an EV and the math stops being close. A car doing 1,000 miles a month needs around 300 kWh. On the flat rate that's $51. On a super-off-peak block at 9¢ it's $27, and the car's own app does the scheduling. That one load is why nearly every EV household belongs on some kind of time-based plan.
The three appliances that decide it
EV charging is the killer app. It's the biggest shiftable load in any home that has one, it schedules itself, and off-peak charging alone commonly saves $20 to $50 a month over flat-rate charging. An EV household that isn't on a TOU or EV plan is usually leaving money on the table.
The water heater is next. A tank on a timer heats in the valley and coasts through the peak on thermal mass; 50 gallons of hot water doesn't care what the clock says. Then the dishwasher and the washer, both of which have had delay-start buttons for twenty years waiting for exactly this. If those three shift, most households clear the savings bar even with normal evening cooking and TV. The water heater guide and the dishwasher vs hand washing guide on this site cover the timer and delay-start details.
Who should stay on the flat rate
TOU punishes the unshiftable. Work-from-home households running the AC straight through a 4 to 9 p.m. peak in Phoenix or Houston. All-electric homes cooking dinner inside the window. Anyone who knows, honestly, that they won't manage the schedules. A 2× peak rate applied to your existing 5 to 8 p.m. life is a rate hike with extra steps.
The decision method is mechanical. Download a month of hourly usage from your utility portal, re-price it under the TOU schedule, compare. Many utility websites now run the comparison for you with one click. One evening in a spreadsheet beats every rule of thumb, and our state pages show whether your state's spread is even wide enough to bother.
FAQ
Do time-of-use plans save money?+
For households that can shift the big loads, meaning EV charging, water heating and laundry, savings of 10 to 25% are routine. For daytime-AC and dinner-hour homes with nothing to move, TOU often costs more than the flat rate.
What time is electricity cheapest?+
On TOU plans, overnight, typically 11 p.m. to 6 a.m., and some plans add a super-off-peak block in the small hours. The expensive window is almost always late afternoon to evening, around 4 to 9 p.m.
Is a TOU plan worth it with an EV?+
Almost always. EV charging is the largest shiftable load in the home, it schedules itself from the car's app, and off-peak charging alone commonly saves $20 to $50 a month compared with flat-rate charging.
Can I switch back if the TOU plan costs me more?+
Usually, though many utilities limit how often you can change plans, often once per 12 months. Some offer first-year bill protection and credit the difference if the new plan cost you more than the old one would have. Ask before you sign up, and keep the hourly data so you can check for yourself.