Consumers in states where they can choose their electricity provider have access to new options like time-of-use plans that let consumers take advantage of off-peak and on-peak hours. Understanding your energy costs will help you make the right choices to save money.
What Are Peak Hours?
Electricity peak hours are times when business and residential customers use the most electricity. How electricity pricing works depends, to a large degree, on demand. When demand is high, utilities and providers must invest in excess power generation capacity. If they don’t have the capacity, they must buy power from other sources, which can be expensive. Much of that extra capacity sits idle during off-peak hours. Buying extra power during peak hours costs money that could be better spent in other ways.
What Are Off-Peak Hours?
Off-peak hours are periods when companies and residences use less electricity. Most businesses are closed at night and thus have lower power demand. People sleeping at home at night also typically use less power. Energy companies don’t have to buy expensive excess power or turn to expensive additional generation resources. The difference between off-peak and peak hours is that off-peak is when electricity rates are lowest.
When Are Peak vs. Off-Peak Hours?
While it is easy to understand peak vs. off-peak hours, the details aren’t always so straightforward. What are peak hours and what are off-peak hours changes by region, utility company, and even by season. It depends on the weather, generating capacity and demand patterns in your area. Here are some general guidelines as to when are peak hours for electricity.
