Why Compare Time-of-Use and Flat Rate Plans
Electricity billing is no longer a one-size-fits-all proposition. Utilities increasingly offer time-of-use pricing that charges more for electricity consumed during peak demand hours and less during off-peak periods. The idea is to nudge customers toward shifting flexible loads, such as laundry or electric vehicle charging, to times when the grid is less stressed. However, a large segment of households still rely on traditional flat-rate plans that charge the same price for every kilowatt-hour regardless of when it is used. Deciding between these options can be confusing, especially when advertising focuses on potential savings without accounting for individual consumption patterns. This calculator fills that gap by letting you plug in your own numbers to see whether a time-of-use (TOU) plan or a flat-rate plan would be cheaper for your household.
Many people assume that TOU plans are automatically more economical because of their lower off-peak rates, yet this is not always true. If your lifestyle or work schedule forces most of your electricity consumption into peak windows, the higher peak rates can outweigh any off-peak savings. Conversely, night owls or electric vehicle drivers who can schedule charging sessions overnight may find TOU plans significantly cheaper. The calculation depends on the proportion of energy used during expensive hours compared with cheaper ones. Rather than relying on generalized charts or broad averages, this tool helps you quantify the cost difference using numbers that reflect your own habits. It enables an informed decision about whether switching plans would genuinely lower your bill or if the effort to shift usage is worth the payoff.
How to Use the Calculator
To get started, enter your total monthly electricity consumption in kilowatt-hours. This number can usually be found on your bill or in your utility's online portal. Next, estimate what percentage of your usage occurs during peak hours. Many smart meters and online dashboards break down usage by time period; if you do not have such data, you can make an educated guess based on your schedule. Then enter the peak and off-peak rates for the time-of-use plan you are considering, followed by the flat rate offered by your utility. All values should be non-negative, and the peak percentage should fall between 0 and 100. Once the fields are filled out, click the Calculate button to see the projected monthly costs under both plans and which option comes out ahead.
The calculator instantly computes the cost under a TOU plan by multiplying your peak kilowatt-hours by the peak rate and your off-peak kilowatt-hours by the off-peak rate. It separately calculates what your bill would be if all usage were charged at the flat rate. The difference between these two totals reveals the savings or extra cost associated with the TOU plan. A positive difference means the flat rate is cheaper, while a negative difference signals that the TOU plan provides savings. The result is displayed in a clear, single-line summary that you can copy to your clipboard for future reference or discussion with household members.
Formula Behind the Scenes
The calculation hinges on a simple weighted cost formula. Let represent total monthly usage, the percentage of usage during peak hours, the peak rate, the off-peak rate, and the flat rate. The TOU cost and flat cost can be expressed as:
The calculator also computes the difference between these costs, highlighting which plan is cheaper:
If is negative, the time-of-use plan saves money; if positive, the flat rate is more economical. The simplicity of these formulas belies the practical complexity of estimating usage patterns, which is why many people struggle to evaluate TOU offers without a tool like this one.
Worked Example
Imagine a household that uses 900 kWh per month. After reviewing smart meter data, they determine that 35% of their usage occurs during peak hours. The time-of-use plan charges $0.30 per kWh during peak times and $0.12 per kWh off-peak. The flat-rate alternative is $0.18 per kWh. Using the formulas above, the TOU cost is 900 × 0.35 × 0.30 + 900 × (1 − 0.35) × 0.12 = $167.40. The flat cost is 900 × 0.18 = $162.00. The difference is $5.40, meaning the household would actually pay more under the TOU plan unless they shift additional usage to off-peak hours. This example underscores that simply opting into time-of-use pricing does not guarantee savings.
Now suppose the same household invests in a programmable thermostat and reschedules laundry and dishwashing to the evening, reducing peak usage to 20%. The TOU cost becomes 900 × 0.20 × 0.30 + 900 × 0.80 × 0.12 = $140.40. The flat cost remains $162.00, so the TOU plan now saves $21.60 per month. This difference could justify the behavioral changes or investments needed to alter usage patterns. The calculator allows you to test various scenarios like this to gauge potential savings before making the switch.
Scenario Comparison
The table below shows how varying the peak usage percentage affects total cost for a 900 kWh month with the rates described above. Such comparisons help visualize the tipping point where a TOU plan becomes advantageous.
| Peak % | TOU Cost ($) | Flat Cost ($) |
|---|---|---|
| 50 | 180.00 | 162.00 |
| 35 | 167.40 | 162.00 |
| 20 | 140.40 | 162.00 |
Another angle is to vary total usage while keeping percentages constant. The next table compares bills for different monthly consumption levels at 20% peak usage.
| Total kWh | TOU Cost ($) | Flat Cost ($) |
|---|---|---|
| 600 | 93.60 | 108.00 |
| 900 | 140.40 | 162.00 |
| 1200 | 187.20 | 216.00 |
Why the Calculator is Useful
Marketing materials for time-of-use plans often highlight dramatic savings, but they rarely provide the context needed to determine if those savings apply to you. This calculator demystifies the decision by tailoring the analysis to your actual usage. It can help renters decide whether opting into a TOU plan is worthwhile, guide homeowners considering a smart appliance upgrade, or support discussions with family members about changing habits. Energy advisers and community organizations can use it as an educational tool to show how behavioral shifts translate into real dollars. By quantifying the break-even point, the tool encourages data-driven choices rather than guesses.
Limitations and Assumptions
The tool assumes two pricing periods—peak and off-peak—while some utilities offer multiple tiers or seasonal rates. It treats usage estimates as accurate, but in reality many households only receive aggregated monthly data. The calculator does not account for fixed charges, demand fees, or taxes that may be present on actual bills. It also assumes that peak and off-peak rates remain constant throughout the billing cycle, whereas real-world programs may adjust prices during extreme weather events or holidays. Finally, the model does not consider the cost of shifting usage, such as inconvenience or investment in smart home devices. Users should interpret the results as a simplified estimate rather than a definitive prediction.
Further Reading
To explore ways of shifting energy use, try the home battery time-of-use arbitrage calculator or estimate individual appliance consumption with the appliance electricity cost calculator. These tools complement the insights gained here and can help you build a comprehensive energy-saving strategy.