Batteries and time-of-use bill savings
Time-of-use (TOU) rates charge different prices depending on the time of day. Batteries can lower bills by storing low-cost energy and discharging it during high-price peak periods, effectively arbitraging rate differences.
How battery arbitrage works
- Charge during low-rate hours: Batteries charge from solar production or grid power when electricity rates are low.
- Discharge during peak hours: Batteries supply the home during expensive peak periods to avoid high retail rates.
Factors affecting savings
- Rate spread: Larger differences between off-peak and peak rates increase savings potential.
- Battery capacity and power: Sizing must match the amount of energy needed during peak hours and the power required to serve loads.
- Round-trip efficiency: Energy lost charging and discharging reduces net savings; higher efficiency improves economics.
- Solar production timing: Solar-powered charging during the day avoids drawing low-cost grid electricity and enhances value.
Optimizing battery use
- Smart energy management: Systems that automatically schedule charge/discharge based on TOU schedules maximize savings.
- Combining with solar: Daytime solar generation can charge batteries for evening peaks without grid purchases.
- Monitoring and control: Real-time analytics help fine-tune behavior and identify opportunities for additional savings.
Practical steps
- Review your TOU schedule and historical bills to quantify peak-hour consumption and potential shifting.
- Work with an installer to simulate battery operations using local rates and your household load profile.
- Check for utility programs or incentives that encourage battery adoption or provide payments for grid services.
In many markets with steep peak pricing, batteries can substantially reduce bills by shifting energy use. However, the economics are highly site-specific, so a modeled analysis using actual rates and usage is essential to determine potential savings.