Is time-of-use cheaper? If you change nothing, it depends on your utility
Time-of-use tariffs charge more for electricity at busy times of day and less at quiet ones. The pitch is that you can save by using power when it is cheap. Underneath that pitch is a simpler question: if you change nothing at all, does switching to time-of-use cost you more or less?
The filings give a clear answer, just not the one either side of the argument usually makes.
What we compared
We looked for every utility that currently offers both a time-of-use tariff and a flat or tiered one, open to any residential customer. Forty-four qualify. For each, we priced the cheapest option of each kind for the same household, at 500, 1,000 and 2,000 kWh a month.
That household uses power in the same typical daily pattern throughout — more in the evening, less overnight — and does not move any of it. It is the modeled profile described in the methodology, and it is the fair baseline: the answer for someone who switches tariffs and carries on as before.
What we found
At 1,000 kWh a month, time-of-use was cheaper at 24 of the 44 utilities and more expensive at 20. The median difference was $15 a year — close to nothing.
That median hides the real result. At 32 of the 44, the two options were more than $50 a year apart. The difference is real; its direction depends on the utility.
The stakes rise with usage. At 500 kWh a month, 26 of the 44 utilities had options more than $50 apart. At 2,000 kWh, 40 did. Time-of-use came out cheaper at 23 utilities at the lower usage and at 25 at the higher.
Counting special-purpose tariffs — for electric vehicles, heat pumps or solar — tilts the result slightly toward time-of-use: cheaper at 29 of 51 utilities. Those tariffs are designed around loads that can move, which is the whole point of them.
Why it comes out even
A time-of-use tariff trades a higher price at peak for a lower one the rest of the time. Whether a household that changes nothing comes out ahead depends on two things the utility sets: how steep the peak premium is, and how many hours it covers. Many time-of-use tariffs are designed so that an average household pays about the same either way. Across utilities, that design produces what the numbers show: roughly half win, half lose, and the margin is set by the utility, not the customer.
What changes the answer
Everything above assumes no change in behavior. Moving electricity use out of the peak window — charging a car overnight, running laundry and the dishwasher later, pre-cooling a house before the peak starts — is what turns a time-of-use tariff from a coin flip into a saving. How much it saves depends on the gap between the peak and off-peak prices; how to read a time-of-use tariff explains what to look for.
How we measured this
- Current tariffs: filed since 2020, priceable from usage alone, priced as a whole home's bill rather than delivery alone or a single appliance, open to any household (not only to low-income or senior customers, or to EV owners), and not flagged as a likely data error — the same set this site ranks.
- Set aside: tariffs whose names restrict them to electric vehicles, heat pumps, solar or net metering, storage, farms, pilots, controlled loads or off-peak-only service. This is done by name, so it is imperfect.
- Cheapest of each kind: your current tariff may not be the cheapest of its kind.
- Modeled usage: real households use power at different times, and a household that uses more in the evening than the model assumes will fare worse on time-of-use.
What to do with this
Price both options at your own usage in the calculator. If they come out close, the decision rests on whether you can shift when you use power. If they are far apart, the numbers have made the decision for you.