Are Time of Use Electricity Plans Worth It? Who Saves

Are time of use electricity plans worth it?

They are worth it if you can move a fair share of your power use into the cheap hours. They are usually not worth it if most of your use falls in the expensive peak hours and you cannot change that.

That is the whole decision in two lines. The rest of this guide helps you check it with your own numbers. You will learn how these plans work, who tends to win, who tends to lose, and which extra costs people miss. You will also get a simple break even test you can run in ten minutes.

One note first. Rules, prices and peak hours differ a lot between countries, regions and suppliers. This guide uses round example numbers. They are not real prices. Always use the figures from the plan you are offered.

What is a time of use tariff, and where does a smart meter fit in?

A time of use tariff charges different prices for electricity at different times of day. A flat tariff charges one price for every unit (kWh), at any hour. A time of use plan splits the day into periods, such as peak, shoulder and off peak.

Here is a typical shape, shown as an example only:

Peak: early evening, when many homes cook, heat or cool, and use lights and screens. This is the highest price.
Shoulder: some daytime and late evening hours. This is a middle price. Not every plan has it.
Off peak: overnight, and sometimes weekends or midday. This is the lowest price.

Why do suppliers do this? Power costs more to supply when the whole grid is busy. A time of use price passes that signal on to you. If you use less at busy times, you may pay less. The grid also benefits.

A smart meter is the device that makes this possible. It records your use in short blocks, often every 30 minutes or every hour. An old meter only shows one total. A time of use bill needs to know when you used power, so it needs interval data.

Two points are often confused:

A smart meter does not change your price by itself. You can have one and still be on a flat tariff.
A time of use plan needs a meter that records by time. In some places, you must get a smart meter before you can join one.

Some regions also have time of use pricing as the default for new customers. Check what applies where you live.

Who usually saves money on a time of use plan?

People save when their use is flexible, or when it already sits in cheap hours. These groups tend to do best:

Electric vehicle owners. A car can charge overnight with no effort. A big block of energy moves to the lowest price. This is often the single biggest win.
Homes with someone out all day and use mostly at night. If your peak window is 4pm to 9pm and you are rarely home before 6pm, you may already be a good fit.
Households with timers on big loads. Dishwashers, washing machines, dryers, pool pumps and water heaters can often start later. Many have a delay start button.
Homes with electric water heating or storage heating. Heat can be made in cheap hours and stored. This works best with a hot water tank or a storage heater.
Homes with a home battery. A battery can charge when power is cheap and supply the house when it is not. Check that the saving covers the battery cost over its life, as the battery is a large purchase on its own.
Night shift workers and people who work from home with flexible hours. Their use may fall in cheap periods anyway.

The common thread is control. If you can decide when large loads run, you hold the advantage. If the plan decides for you, the supplier does.

Who usually does not save, or pays more?

These households often lose on a time of use plan:

Families home in the late afternoon and evening. Cooking, lights, heating, homework and TV all land in the peak window. Little can move.
Homes that use a lot of air conditioning or heating in peak hours. In hot or cold weather, comfort needs do not follow the price list. Peak use can climb at the worst time.
People with health needs. Medical devices, or a need to keep the home warm or cool, are not things to ration for a small saving.
Very low use homes. If your bill is small, a good shift may save only a little. A higher fixed charge could wipe it out.
Renters or flat dwellers with limited control. Shared heating, no timers and no way to charge a car at night limit your options.
Anyone who will not change habits. A plan only pays if your behavior matches it. If you know you will not run the washer at night, be honest about it.

There is no shame in staying on a flat plan. For many homes, it is the better choice. It is simple, predictable and fair to a busy household.

How can you test whether a time of use plan will save you money?

Do the sums before you switch. Follow these steps.

Get your usage data. Download interval data from your supplier portal or smart meter app. If you have no smart meter, use your bills and estimate your evening use from your habits.
Write down the plan terms. Note the peak, shoulder and off peak prices. Note the hours, the days they apply, and any seasonal changes.
Count your peak share. Add up the kWh you use in the peak window. Divide by your total kWh. This is your peak share.
Cost your current use on the new plan. Multiply each period's kWh by its price. Add the daily or monthly fixed charges.
Compare with your flat plan. Use the same period and the same total kWh.
Test a realistic shift. Move only the loads you will truly move. Do not assume you will move everything.
Repeat for your worst season. Use a hot or cold month, not only a mild one.

A quick break even formula for a plan with two prices:

Break even peak share = (flat price − off peak price) ÷ (peak price − off peak price)

Example only, not real prices. Your flat plan is 20 cents per kWh. The time of use plan is 30 cents at peak and 10 cents off peak. Break even is (20 − 10) ÷ (30 − 10) = 0.5. So if less than 50% of your use is at peak, you save on energy charges. If more than 50%, you pay more.

Now see it with a month of 600 kWh, again as an example:

Flat plan: 600 kWh × 20 cents = 120.00.
Household A, 40% at peak (240 kWh peak, 360 off peak): 240 × 30 = 72.00, plus 360 × 10 = 36.00. Total 108.00. Saves 12.00.
Household A after shifting to 20% at peak (120 peak, 480 off peak): 36.00 + 48.00 = 84.00. Saves 36.00.
Household B, 60% at peak (360 peak, 240 off peak): 108.00 + 24.00 = 132.00. Pays 12.00 more.

Notice how small the gap is for Household A before any change. The real saving comes from shifting. Notice also that Household B only loses a little at first, but the loss grows if the peak share rises in winter or summer.

Now add the fixed charge. Suppose the time of use plan has a daily charge that is 0.10 higher than the flat plan. Over 30 days, that is 3.00 extra. Household A's first saving drops from 12.00 to 9.00. Always include this step.

An EV example, again only illustrative: a car uses 200 kWh a month. On the flat plan, this costs 200 × 20 = 40.00. Charged fully off peak at 10 cents, it costs 20.00. That is a 20.00 saving from one habit, with no change to how you live.

What hidden costs and common mistakes should you watch for?

The headline prices are only part of the story. Check these before you sign.

Higher fixed charges. Some time of use plans have a higher daily or monthly charge. This hurts low use homes most.
Peak prices that are very high. A cheap off peak rate can hide a peak price far above the flat rate. One cold evening can undo a week of savings.
Wide peak windows. A window of 3 hours is not the same as one of 8 hours. Check start and end times, and whether weekends count.
Seasonal changes. Peak hours and prices can differ between summer and winter. A test done in spring may mislead you.
Critical peak or event pricing. Some plans add a very high price on a few days of grid stress. Others give a reward if you cut use. Read the rules.
Demand charges. Some plans, especially for businesses, charge for your highest power draw in a period, not just total energy. Running several big loads at once can cost you.
Exit fees and minimum terms. Ask what it costs to leave and how long the price is fixed.
Meter costs. Ask whether installing or changing a meter is free in your area, and who pays if it fails.
Price changes. Off peak prices can change. A saving that depends on a narrow gap can disappear if that gap shrinks.

Common mistakes people make:

Judging by the lowest rate on the page. The off peak rate is the one that looks best. Your bill depends on all rates and your own habits.
Assuming the washer is the big saver. Small appliances move little energy. Heating, cooling, hot water and car charging matter far more.
Shifting use in a way that costs comfort or safety. Do not run appliances unattended at night if that worries you. Follow the maker's advice.
Ignoring the cost of timers or smart plugs. Small purchases add up if the saving is small.
Forgetting to recheck. Life changes. A new job, a baby or a new car changes your best plan.

When does this advice not apply?

The method above is general. In some situations, the answer changes.

You have solar panels. Then you export power as well as buy it. Export rates may also vary by time. Midday export may pay little, while evening export may pay more. You need to model both import and export, and local rules vary.
Your area has regulated or mandatory time of use pricing. If you cannot choose, the question is how to adapt, not whether to switch.
You only have a flat option. In many markets, time of use is not offered to homes at all.
Your supplier offers a special EV or heat pump plan. These often have unusual hours and prices. Compare them to your normal plan separately, and read how they treat the rest of your home use.
You run a small business. Business tariffs can have different structures, such as demand charges and contract terms. Use your own business data.
You have unusual hours or health needs. Your best plan may depend on safety and comfort first.

If any of these fits you, the break even formula is still a good first check, but treat it as a starting point and read the full tariff document.

How can you get more from a time of use plan once you switch?

Start with the biggest loads. Small shifts in small loads rarely matter.

Move car charging first. Set the car or charger to start at off peak time.
Heat water in cheap hours. Use a timer on the water heater, if it is safe and your system allows it.
Pre cool or pre heat. Run your heating or cooling a bit before peak starts, then ease off during the window. Results depend on how well your home keeps temperature.
Use delay start. Put laundry and dishes on a timer for cheap hours.
Cook smart. Use a slow cooker or batch cook in cheap hours where it suits you.
Review after 2 or 3 months. Compare your actual bills with what the flat plan would have cost. Your supplier portal may show this.

Keep a simple note of your results. If the saving is smaller than you expected, ask whether the problem is your habits or the plan. If it is the plan, find out how to switch back or move to another one without a penalty.

Where do deals fit in?

For electricity, the plan terms matter more than a discount. A cheap sign up offer does not help if the peak price does not suit you. Compare the full cost over a year, not just the first month.

The offers we held on 2026-11-06 were for web tools and craft kits, not for electricity. We do not list them here, since they are not relevant to this decision. Offers can change at any time. We may earn a commission when you use a link on DealPortal, and it does not change the advice above.

FAQ: time of use electricity plans

Do time of use plans save money for most people?
It depends on your habits, not the average. They tend to help people with flexible use, such as EV owners. Homes that use most power in the evening often see little saving or a higher bill. Use the break even test to check your case.

Do I need a smart meter for a time of use plan?
Usually yes, or at least a meter that records use by time. An older meter only shows a total, so the supplier cannot price by hour. Ask your supplier what meter you need and whether installation is free.

What is the best time to use electricity on a time of use plan?
The best time is whichever period has the lowest price on your plan. That is often overnight, and sometimes midday or weekends. Check your own tariff, as hours differ between suppliers and seasons.

Can a time of use plan cost me more than a flat rate?
Yes. If more than your break even share of use falls in the peak window, you pay more. A higher fixed charge or a very high peak price can also push the bill up. Run the numbers on your last 12 months first.

Can I switch back if it does not work?
Often yes, but terms vary. Some plans have exit fees or a minimum term. Read the contract before you sign and ask how to leave.

Are time of use plans worth it with solar panels or a battery?
They can be, because you can control when you buy and sell power. But you must model both your imports and your exports, plus the cost of any battery. Local export rules vary a lot, so use your own tariff and data.

Are Time of Use Electricity Plans Worth It? Who Saves Money and Who Does Not