And How to Maximize Them With the Right System
If you’re a California homeowner thinking about going solar — or already have solar — you’ve likely heard the term Time-of-Use (TOU) rates. But what are they, and how do they affect your monthly savings?
In this post, we’ll break down exactly how TOU rates work, why they matter under NEM 3.0, and how to optimize your solar system to beat the utility game.
💡 What Are Time-of-Use Rates?
TOU rates are electricity prices that change depending on the time of day. Instead of paying one flat rate per kWh, your cost varies based on:
- Peak hours (usually 4–9 PM): Most expensive
- Off-peak hours (usually late night/morning): Least expensive
- Mid-peak hours: Somewhere in between
This rate structure encourages customers to use less power when demand is high — like during the evening — and more when demand is low.
🔄 TOU and Solar: The NEM 3.0 Shift
Under California’s Net Energy Metering 3.0 (NEM 3.0), the value of the solar power you export to the grid is no longer equal to the amount you pay for power.
Instead, exported power is credited based on avoided cost rates, which are:
- Lower than TOU retail rates
- Variable depending on time and season
- Often worth only 20–30% of what you pay to buy electricity
What this means:
⚠️ Sending excess solar power to the grid isn’t as valuable anymore.
✔️ Using your own solar energy when TOU rates are highest is now key.
🔋 How to Win with TOU: Add Battery Storage
To maximize your savings under TOU rates, most smart solar homeowners are now pairing their systems with battery storage.
Here’s how it works:
- Solar panels charge your battery during the day when the sun is out.
- Battery discharges in the evening when utility rates spike.
- You avoid pulling expensive power from the grid — and save big.
With systems like Tesla Powerwall or Enphase IQ Battery, you can program your storage to discharge precisely during peak hours.
🏠 Real-Life Example
Let’s say your utility charges:
- $0.24/kWh off-peak
- $0.58/kWh peak (4–9 PM)
- Your battery discharges 8 kWh from 4–9 PM
You just saved $4.56 in one evening from battery discharge alone. Multiply that by 30 days = $136.80/month in peak-rate avoidance.
🛠 Aicon Solar’s TOU-Optimized Systems
We design every system with TOU and NEM 3.0 in mind:
- Right-sized systems based on your hourly usage patterns
- Smart inverters and load shifting options
- Battery recommendations that match your budget and usage
- Programming for maximum peak-rate offset
🔍 Key Tips to Maximize TOU Savings
- Run high-usage appliances before 4 PM
- Use your utility’s mobile app to track TOU rates
- Pair solar with a smart battery to avoid buying power at peak rates
- Monitor your system and adjust settings seasonally
⚡ The Bottom Line
Under NEM 3.0, TOU rates now control how much you actually save with solar. But with the right system — and especially with battery backup — you can still drastically cut your bill and protect yourself from rising rates.
💬 Want to See How Much You Could Save?
We’ll analyze your usage and design a custom solar + battery system optimized for your TOU schedule.
📞 Contact Aicon Solar today for a free consultation
📩 Or request a personalized quote online