Time-of-Use Tariffs Explained
What time-of-use and off-peak electricity tariffs are, who they suit, and how shifting usage to cheaper hours can cut your bill.
A flat electricity tariff charges the same price for a kilowatt-hour whenever you use it. A time-of-use (TOU) tariff charges different prices at different hours — cheaper when demand on the grid is low, more expensive when everyone wants power at once. Used well, it can noticeably cut a bill. Used carelessly, it can raise one. This guide explains how they work and how to tell if one suits you.
Peak, off-peak and shoulder
Most TOU tariffs split the day into peak (expensive, usually late afternoon and evening), off-peak (cheap, usually overnight) and sometimes a shoulder rate in between. The exact hours are set by your tariff and shown in your contract or supplier app. The gap between peak and off-peak can be large — off-peak power is sometimes a third of the peak price — which is where the opportunity lies.
Who benefits, and who does not
The tariff rewards shifting big loads into the cheap hours. You benefit if you can move heavy, flexible usage — EV charging, the dishwasher, the washing machine, water heating — into off-peak windows. You may lose out if most of your electricity is used at peak times and cannot be moved, because you would be paying the higher peak rate for the bulk of your usage.
| Good fit | Poor fit |
|---|---|
| Home EV charged overnight | Most usage in the evening peak |
| Flexible laundry and dishwashing | No control over when power is used |
| Electric water heating on a timer | Small, steady all-day consumption only |
| Battery or solar storage | Cannot shift any load off-peak |
How to shift usage without noticing
The trick is automation, not willpower. Most of the biggest loads can run on a timer or delay-start so they do the work overnight while you sleep. Set the dishwasher and washing machine to delay-start into the off-peak window. Charge an EV on a schedule. If you have an electric water heater, heat the tank overnight and coast through the day on stored hot water. None of this changes what you do — only when the appliance does it.
Check the maths before you switch
A TOU tariff is only cheaper if you genuinely move enough usage to the cheap hours to outweigh the higher peak rate on everything else. Before switching, look at when you actually use electricity. If you already run big appliances overnight, or you drive an EV, the savings can be substantial. If your life runs on the evening peak and cannot flex, a simple flat tariff may cost less. Use the unit rates from a TOU offer in the cost calculator for your main appliances and compare the total against your current flat rate — the honest way to decide.
The bottom line
Time-of-use pricing rewards flexibility. The more of your consumption you can push into the cheap hours — especially large, automatable loads — the more you save. If you cannot move much, it offers little and may cost more. Know your off-peak window, automate the big loads, and check the numbers against your own usage rather than the marketing.
Frequently asked questions
Who benefits most from a time-of-use tariff?
Households that can shift big loads — EV charging, dishwasher, washing, water heating — into cheaper off-peak hours. If most of your usage is at peak times, a flat tariff may be cheaper.
How do I know my off-peak hours?
They are set by your tariff and shown on your contract or supplier app. Off-peak windows are commonly overnight, but exact hours vary by supplier and country.