Why This Matters
Most people are used to paying the same price for every kW hour of electricity they use no matter the time of day. But utilities across New England are starting to introduce something called time-of-use (TOU) rates — and it could change how you think about your power bill.
So, how do time of use rates work? In simple terms, TOU means electricity costs more at busy times of day (like weekday evenings) and less at quieter times (like overnight or early morning).
How Time-of-Use Works (With a Simplified Example)
Think about “congestion pricing” for tolls when driving into New York city:
- Rush hour = slower, more stressful; costs more gas and toll rates are much higher.
- Middle of the night = smooth, easy ride with lower priced tolls.
Electricity works the same way. When everyone is cooking dinner, watching TV, and charging devices at the same time, the “grid” is taxed more, which requires more expensive ways to generate electricity and as a result the utility is going to charge you more. Late at night, when demand is low, producing power is cheaper so they will drop the price.
So simply put, with TOU rates, your utility bill reflects those peaks and valleys:
- On-peak hours = higher price per kW hour.
- Off-peak hours = lower price per kW hour.
That’s it. You’re not using more electricity, just paying a different price depending on when you use it.
What This Looks Like in New England
Generally, TOU rates in New England are still limited, with most activity happening at the municipal level in Massachusetts. For example, Princeton Municipal Light recently rolled out a broad TOU program with a striking spread: 5 cents per kWh at the low rate and 50 cents per kW hour (kWh) during peak times (reportedly 5:00 p.m. to 10:00 p.m.). Concord has also announced it will move toward a similar model.
At the state level, Massachusetts’ 2022 climate law requires major utilities to develop TOU rate proposals, so wider adoption is expected. However, availability often hinges on the installation of smart meters, which are necessary to send and receive real-time price signals, which of course would be a major project for the utility.
For now, the best way to confirm whether TOU is available for your household or business is to check directly with your utility provider, since offerings can vary and are evolving quickly.
No matter where you live, the pattern is similar: use less during busy times, save more during quiet times.
Why It Matters for You
- Save money: Shifting when you run the dishwasher, do laundry, or charge your EV can lower your monthly bill.
- Shift smart: Running appliances or charging an EV during the day—especially if you have solar—lets you take advantage of your own clean power. Without solar, the biggest savings and grid benefits come from avoiding peak hours (often late afternoon to evening), when demand is highest. Pairing with a battery can further maximize renewable use, like storing midday solar for evening needs.
- Pair with solar + storage: Solar panels help reduce your overall energy costs, but since peak rates often fall in the late afternoon and evening (after the sun goes down), a battery is key. With storage, you can bank solar or off-peak power and use it when rates are highest.
What to Do Next
- Check with your utility to see if TOU rates are available in your area.
- Look at your daily routine — even small shifts (like running appliances before bed) can add up.
- If you’re considering solar, know that it pairs perfectly with TOU rates to maximize your savings.
Conclusion
Time-of-use rates are still new in New England, but they’re spreading quickly. By learning how time of use rates work, you’ll be ready to save money, use cleaner energy, and get even more value out of solar.
Ready to Take Control of Your Energy?
At New England Clean Energy, we’ve helped thousands of homeowners in Massachusetts, New Hampshire, Rhode Island, and Maine cut costs and take charge of their power with solar. If you’re curious about how solar and battery storage can work with time-of-use rates, get a free solar quote today or call us at 877-886-8867.
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