Time-of-use tariffs explained

On a standard plan, a kilowatt-hour costs the same at 3am as it does at 6pm. On a time-of-use plan, it doesn't — and the gap can be large enough that whenyou run an appliance matters as much as how often. Here's how these tariffs work and how to make them work for you.

What a time-of-use tariff actually is

Time-of-use (TOU) pricing charges different rates for electricity depending on the time of day, and sometimes the day of the week or season. The logic is simple: electricity is more expensive to supply when everyone wants it at once. Utilities pass that cost on, hoping to nudge demand away from the crunch.

Most TOU plans divide the day into two or three periods:

• Peak: the most expensive window, typically late afternoon into the evening on weekdays, when households cook, cool, heat and switch everything on at once.
• Off-peak: the cheapest window — overnight and in the small hours, when demand collapses. Rates here can be a fraction of peak.
• Shoulder (mid-peak): an in-between rate during the quieter parts of the day, on plans that use three tiers.

Why the same appliance can cost two or three times more

On a flat plan, the cost figures across this site apply whenever you run a device. On a TOU plan, multiply the energy used by the rate in force at that moment. If your peak rate is 36¢ and your off-peak rate is 12¢, the identical load is three times more expensive at dinner time than at midnight — same kWh, very different bill.

This matters most for big, flexible loads. A clothes dryer, dishwasher, water heater or EV charger can often run whenever — so shifting them off peak captures the full discount with no change to how you live.

What you can't shift — and that's fine

Some loads are tied to the moment you need them: the oven at dinner, lights in the evening, the air conditioner when it's hot. Trying to reschedule those leads to misery, not savings. The smarter move is to accept your fixed loads and concentrate on the handful of large, time-flexible appliances where shifting is painless.

Practical ways to shift load off peak

• Use delay-start timers built into dishwashers, washers and dryers to finish overnight.
• Set an EV to charge after the off-peak window begins rather than the moment you plug in.
• Run pool pumps, water heaters and other thermostatically controlled devices on a timer or smart plug.
• Pre-cool or pre-heat your home before peak starts, then ease back during the expensive window.

Is a time-of-use plan right for you?

TOU rewards households that can move consumption to off-peak hours and punishes those whose life is centred on the evening peak. If most of your usage already happens at night, or you have a big shiftable load like an EV, a TOU plan can cut your bill noticeably. If your home is busiest from 5pm to 9pm and nothing can move, a flat rate may be cheaper.

To estimate the effect, find your peak and off-peak rates on your bill — see our guide on how to read your electricity bill — then run any appliance through our calculators twice, once at each rate. The difference is what good timing is worth to you.

Published by The HowMuchToRun Team. Figures and methods are explained on our about page; all estimates are for guidance, not exact billing.