If you’re looking to reduce your energy costs, your water heater may be a good place to start. One way to cut down on your energy usage is by utilizing time-of-use rates. These rates enable you to pay different prices for electricity depending on the time of day or the day of the week. In this article, we will explore how time-of-use rates work and how they can benefit you.
What Are Time-Of-Use Rates?
Time-of-use (TOU) rates, also known as variable rates, allow you to pay different prices for electricity depending on when you use it. The costs for electricity are divided into three tiers: peak, off-peak, and mid-peak. During peak hours, which are typically in the late afternoon or early evening, the cost of electricity is high. During off-peak hours, usually overnight, the price is lower. Mid-peak rates fall somewhere in between.
How Can Time-Of-Use Rates Help Save Energy?
By using your water heater during off-peak hours, you can save money on your energy bill. According to the Department of Energy, water heating accounts for approximately 18% of your home’s energy usage. If you use an electric water heater, altering your usage to coincide with off-peak hours can save you money.
Furthermore, using your water heater during off-peak hours reduces overall energy demand during peak times. When everyone is using electricity at the same time, energy demand spikes, and the price of electricity increases. By altering your water heating routine, you’re doing your part to help alleviate the burden on the power grid.
How To Participate In Time-Of-Use Rates
To participate in time-of-use rates, contact your energy provider and ask about their time-of-use rates program. They will provide you with information on the times and rates for their program. It is essential to note that not all energy providers offer this option and those that do may require you to have a smart thermostat or a specific meter to participate.
Tips For Using Time-Of-Use Rates
- Consult your energy provider’s website or reach out to a representative for the specific rates and times. Be sure to pay attention to any holidays or special events when rates may deviate from the norm.
- Consider investing in a smart thermostat or a timer switch for your water heater. These tools will allow you to automate your water heating during off-peak periods.
- Be mindful of your hot water usage. If you know you have a busy day that will require a lot of hot water usage, save it for off-peak times. Avoid using hot water during peak hours.
- Adjust your routine slowly. Gradually alter when you use hot water so that you don’t experience a drastically different bill than expected.
Conclusion
By utilizing time-of-use rates, you can save money on your energy bill while simultaneously helping to reduce energy demand during peak hours. It is essential to be mindful of your hot water usage and plan accordingly to reap the benefits of this program fully. Contact your energy provider to inquire whether they offer time-of-use rates and to learn how you can participate.