Time-of-Use Battery Savings: Dodge Peak Prices (2026)
The short answer: time-of-use tariffs sell the same kWh at two to three prices in one day — and a battery lets you buy low and use high. Shifting just 2 kWh/day out of the evening peak across a typical $0.25–0.35/kWh spread is worth roughly $165–235/year; a 2–4 kWh LFP bank aimed at the 4–9 pm window therefore pays in 1–3 years on strong spreads.
How time-of-use tariffs actually work
- Off-peak (11 pm–7 am): roughly $0.08–0.20/kWh.
- Shoulder (daytime): roughly $0.15–0.30/kWh.
- Peak (4–9 pm): roughly $0.30–0.55/kWh.
The ratio is what matters: peak-to-off-peak ratios of 1.5–3x are typical. Check your utility's tariff sheet for exact windows; the estimator accepts your peak and average rates directly.
Battery arbitrage math: the one formula
Yearly savings ≈ kWh shifted/day × (peak − off-peak) × round-trip efficiency × days shifted/year
- kWh shifted/day: 2–6 kWh for most homes.
- Spread: $0.10–0.45/kWh in practice.
- Round-trip: 0.90–0.92 LFP/sodium-ion, 0.85 lead-acid.
- Days: 330–365 grid-charged, 280–330 solar-charged.
Worked example: shifting 2 kWh every evening
Off-peak $0.12–0.18/kWh, peak $0.37–0.53/kWh — a $0.25–0.35 spread. A 2 kWh usable LFP bank covering the 5–9 pm load:
- Gross per day: 2 kWh × $0.25–0.35 = $0.50–0.70/day.
- After 0.92 round-trip: $0.46–0.64/day.
- Yearly (330–365 days): roughly $150–235/year.
- Bank cost: 2 kWh × $80–125/kWh DIY = $160–250; retail $220–330.
- Simple payback: 1–2 years DIY, 1–3 years retail.
At a thin $0.10–0.15 spread the same bank earns only $65–100/year. Identical hardware, 3–4x different income — type your real rates into the simulator, not an average.
Battery size vs bill cut: the sizing table
| Usable battery | Typical bill cut (10 kWh/day) | Battery cost (LFP) | Extra yearly TOU value |
|---|---|---|---|
| 0 kWh (panels only) | ~35–45% | $0 | $0 |
| 2 kWh | ~55–65% | $160–330 | ~$150–235 |
| 4 kWh | ~70–80% | $320–660 | ~$300–450 |
| 6 kWh | ~80–88% | $480–990 | ~$400–600 |
| 10 kWh | ~88–95% | $800–1,650 | ~$500–750 |
TOU value overlaps self-consumption value — the bank earns whichever is larger on a given day. Past 6 kWh each added kWh buys visibly less for bill-cutting duty.
Solar-charged vs grid-charged battery
A solar-charged bank stores midday surplus and deploys it into a $0.30–0.55 peak — the fastest payback (1–3 years). A grid-charged bank charges off-peak at $0.08–0.20 and works 330–365 days/year in any weather, needs no panels, and costs only bank plus inverter. Renters and shaded roofs: the TOU-only path is yours.
The worst-week caveat
Every size on this site is checked against the darkest week of five years of NASA hourly weather. A solar-charged bank sized for April coasts through summer, then a December murk arrives with 20–40% of normal harvest. Expect solar-charged TOU savings to dip 30–60% in your worst month; grid-charged savings do not dip at all.
When TOU arbitrage does NOT pay
- Spread under $0.10/kWh. Shifting 2–4 kWh/day earns $65–150/year — a $320–660 bank stretches past 5 years.
- Lead-acid on daily duty. 500 field cycles means a fresh bank every 1–2 years; lifetime cost $2,270–3,240 per usable kWh.
- Demand charges instead of TOU. That game needs power (kW of inverter), not energy (kWh of bank).
- Flat-rate net metering. Where exports earn near-retail, the grid is already a free battery.
Honest fine print
Spreads are indicative 2026 residential bands — your utility's sheet rules. Educational estimates only — verify everything with a licensed professional before building; batteries and mains wiring can cause fire, injury, and death.
Know your spread, know your size. Enter your location, daily use, and peak/off-peak rates, and run the free simulation.
⚡ Run the free simulationRelated guides
- Is a home battery worth it? Honest payback math
- How to cut your electricity bill with solar: honest math
- Where payback is fastest · all 66 cities
Frequently asked
How much can a battery save on a time-of-use tariff?
Roughly $75–150/year per kWh shifted daily: 2 kWh across a typical $0.25–0.35 spread earns $150–235/year after round-trip loss.
What size battery do I need to avoid peak prices?
Cover your 4–9 pm load: 2–4 kWh usable for most 10 kWh/day homes, 4–6 kWh for heavy evening users. Past 6 kWh returns diminish hard.
Can a battery save money without solar panels?
Yes on TOU rates — grid-charging off-peak and discharging at peak works 330–365 days/year. On flat power it rarely pays.
Does cloudy weather break TOU battery savings?
Only solar-charged savings dip (30–60% worst month). Grid-charged savings are weather-proof.