TOU Rates Explained: Why Your Electric Bill Spikes Between 4–9 PM

If you're a PG&E, SCE, or SDG&E customer, you're on a Time-of-Use (TOU) rate plan — whether you chose it or not. California's big three utilities have made TOU the default for residential customers. Understanding how it works is the first step to taking control of your bill.

What Are Time-of-Use Rates?

TOU pricing means the cost of electricity changes based on when you use it. There are typically three periods:

• Off-peak — Late night through mid-morning. Cheapest rates (often $0.25–$0.35/kWh).
• Mid-peak — Morning and early afternoon. Moderate rates.
• Peak — 4–9 PM (varies by utility). The most expensive rates, often $0.50–$0.65+/kWh.

Why Peak Hours Cost So Much

Between 4–9 PM, California experiences its highest electricity demand. People come home, turn on AC, cook dinner, charge EVs, and run appliances. Utilities need to fire up expensive "peaker plants" (often natural gas) to meet demand. They pass that cost to you.

The Solar + Battery Solution

Solar panels produce the most energy mid-day — during off-peak and mid-peak hours. Without a battery, much of that energy gets exported back to the grid at lower NEM 3.0 export rates. But with a battery:

• Store cheap solar energy during the day
• Use it during peak hours (4–9 PM) when grid electricity is most expensive
• Avoid paying $0.50+/kWh by using your own stored energy instead
• Arbitrage the rate difference — You effectively "buy" energy at $0 (from your panels) and "sell" it to yourself at peak value

How Much Can You Save?

A household that shifts 70% of its peak usage to battery power can reduce their monthly bill by $150–$300 depending on usage and utility. Over 25 years, that adds up to $45,000–$90,000 in savings.

Calculate your TOU savings or get a free solar + battery quote.