PG&E time of use (TOU): Everything you need to know

PG&E's new rate schedule will affect the utility's entire coverage area in 2020. Whether you have solar panels on your roof, are considering solar, or don't have any plans to generate your own electricity, the time-of-use (TOU) rates will have an impact on your monthly electricity costs. Currently, all PG&E customers have the option of switching to TOU rates or remaining on their existing rate schedule. However, if you are a new PG&E customer or move to a new address, you'll have to choose a new TOU plan. The best option for your home depends on your electricity use habits.

Currently, most residential PG&E customers are on a tiered rate plan, which means that your per-kilowatt-hour (kWh) electricity rate is determined by the total amount of electricity you use each month. The new PG&E rate schedule introduces an additional factor: time of use (TOU) rates. With the new schedules, your per-kWh rate will change based on your total monthly electricity use and the time of day.

Electricity is significantly more expensive to generate during times of high or "peak" demand, such as the morning or early evening. TOU rates are split into two categories: "peak" and "off-peak" hours. During peak hours, the per-kWh rate will be significantly higher than in off-peak hours. As a result, while TOU rates will result in some PG&E rate increases, you could also see a rate decrease during off-peak hours. Off-peak prices are typically 10 to 30 percent lower than peak prices.

Utilities don't use TOU rates to make more money off of their customers. Rather, TOU rates more accurately reflect how electricity prices vary throughout the day. When you pay a flat per-kWh rate regardless of the time of day, you probably don't realize that your electricity costs more to generate and deliver when demand is high. TOU rates reflect these differences to encourage you to shift your electricity use away from costly peak hours.

There are a few things you can do to reduce your bills if you are worried about a rate increase. PG&E's new rate schedules are still tiered and have peak hours from either 3-8 p.m. or 4-9 p.m. You can choose energy-efficient appliances and lighting to reduce your total monthly electricity use and remain in the least expensive "tier." You can also save a significant amount of money by moving some of your electricity use to off-peak hours. For example, if you don't run your dishwasher, washing machine, or dryer during peak hours, you'll cut the cost of using those appliances in half. Additionally, smart home devices like smart thermostats can help manage your heating and/or air conditioning costs throughout the day.

There are a few different TOU plans that PG&E customers can choose from depending on their electricity use patterns. The primary difference between each plan is where the peak hours fall: the ETOU-A plan has peak hours from 3 to 8 p.m., while the ETOU-B plan has peak hours from 4 to 9 p.m. The ETOU-A plan also has a "baseline allowance" that makes it more economical for customers who have relatively low monthly electricity use. Both of these plans have higher overall rates during the summer (May through October) than in the winter (November through April). You can find the most current prices for both plans on the PG&E website.

ETOU-A summer and winter pricing

ETOU-B summer and winter pricing

If you have an electric vehicle, there are also special TOU rates that offer a lower rate overnight. These TOU rates will significantly reduce the cost of charging your electric car so long as it's during nighttime hours.

TOU rates for PG&E customers with electric vehicles

PG&E offers a "rate analysis" tool that helps you estimate your cost for each rate plan option. The tool uses your actual monthly electricity use to project your new monthly costs with different rate schedules.

Prior to the implementation of TOU rates, many solar installers in PG&E's territory would install a solar panel system that could offset some, but not all, of your electricity use to help homeowners stay in the lowest tier of electricity rates. However, the new rate schedules change how you should approach your solar savings. If your solar panels aren't producing enough electricity to cover your electricity use during peak hours, you'll still pay a significant electricity bill each month.

TOU rates are also one of the primary reasons many homeowners are thinking about installing a battery with their solar panels. With a solar battery, you can store your excess solar electricity production at home instead of sending it back to the grid. Then, during peak hours, you can draw from the battery instead of having to pay a higher rate to your utility.

California recently overhauled its Self-Generation Incentive Program, which means that there are significant rebates available for homeowners who want to install a solar battery with their PV system. That being said, home batteries for solar are still a relatively new technology. If you aren't ready to be an early adopter, you may want to wait a year or two before installing one. Your solar company can install a solar PV system for you now that will be ready for a battery whenever you decide you need one.

If you are concerned about reducing your electricity costs during PG&E rate increases, choosing a rate schedule is only the first step. Generating your own emissions-free solar electricity at home is one of the best ways to insulate yourself from rising electricity prices, no matter where you are. To be sure you're getting the best price on your system – and maximizing your 20-year savings – you should always compare multiple offers from different solar companies. Get started by joining the EnergySage Solar Marketplace, where you can review quotes from qualified local installers.