Homeowners today are not only producing their own power through solar but also looking for ways to maximize their return on investment. One of the biggest levers for savings under Net Energy Metering 3.0 (NEM 3.0) and similar rate structures is understanding Time-of-Use (TOU) rates and how to pair them with a battery storage system. Let’s break it down.
What Are T.O.U. Rates?
Unlike traditional flat-rate electricity billing, TOU rates vary depending on when you use power. Utilities divide the day into different price periods:
Off-Peak Hours: Electricity is cheapest (typically late night to early morning).
Mid-Peak Hours: Prices are moderate.
On-Peak Hours: The most expensive electricity, usually in the late afternoon to evening when demand is highest.
For example, in Southern California Edison (SCE), peak hours often fall between 4 PM – 9 PM, when solar panels are winding down but homes are still consuming heavily.
Why Batteries Are Game-Changers
Without a battery, your solar system generates during the day, sending excess power back to the grid when rates are low—and then you buy back electricity at high evening rates. That imbalance cuts into your potential savings.
A home battery (like the Tesla Powerwall or Enphase IQ Battery) solves this problem by:
Storing Excess Solar: Capturing midday overproduction when prices are low.
Shifting Usage: Discharging stored energy during peak-rate windows to offset costly grid electricity.
Emergency Backup: Providing power during blackouts, adding peace of mind beyond just bill savings.
Battery Optimization Strategies
To maximize the value of your battery, you’ll want to align it with TOU schedules:
Self-Consumption Mode:
Your solar system first powers your home’s immediate needs. Any surplus electricity is stored in the battery instead of being exported to the grid.
When your solar isn’t producing, the battery discharges to power your home, reducing or eliminating the need to buy electricity from the utility
If the battery is fully discharged and your home still needs power, it will then draw from the grid
- Best for households with high daytime usage and modest evening needs.
Time-Based Control (TOU Optimization Mode):
The battery charges when electricity is cheap (or from solar during midday).
It discharges specifically during peak-rate periods.
Best for maximizing bill savings under NEM 3.0.
Backup Reserve:
Keep a set percentage (e.g., 20%) of the battery charged for outages.
Flexible setting—you can lower it if maximizing TOU savings is the top priority.
TOU Solar + Battery Savings
Without Battery:
Solar exports at approximately $0.08/kWh during the day for NEM 3.0. Home pulls back power from the grid at $0.40/kWh during peak rate times.With Battery:
Solar charges the battery during the day. That stored energy offsets the $0.40/kWh evening usage. Net result: Roughly 5x the savings value on the same solar production.
The Bottom Line
As utilities push more customers into TOU rate plans, batteries are no longer just “nice-to-have”—they’re critical tools for protecting the economics of solar. By pairing your system with a well-optimized battery, you ensure:
Lower electric bills.
Better protection against rising rates.
Energy security during outages.
If you’re already on a TOU rate schedule, it’s worth revisiting your settings and strategy. The right battery optimization can transform your solar investment into a long-term energy powerhouse.
Give Sunlux a call today if you’re ready to explore your solar and/or home battery back-up needs. Contact us at 877-467-6712 or visit our website at www.sunlux.com