Time-of-Use Pricing

Definition: An electricity billing method where rates vary based on the time of day, season, and day type (weekday/weekend/holiday).

Relevance to energy: Time-of-Use pricing encourages consumers to shift energy use to off-peak hours, helping to balance grid load and potentially reduce overall energy consumption.

‍

Benefits:

• Can lead to lower electricity bills for consumers who shift usage
• Helps reduce strain on the power grid during peak hours
• Encourages the use of energy-efficient appliances and practices

Drawbacks:

• May be confusing for some consumers to understand and manage
• Can potentially increase bills for those unable to shift usage
• Requires smart meters or advanced metering infrastructure

‍

Statistics: A study by the American Council for an Energy-Efficient Economy found that Time-of-Use rates can reduce peak demand by 6-11% on average.