Your electricity bill may not charge the same price for every kilowatt-hour. Some customers pay more in the evening than at noon, and others pay more once their monthly use crosses a line. Solar interacts with both designs, sometimes helpfully and sometimes in ways that surprise people after installation.
Two common rate designs
Time-of-use (TOU) pricing sets different prices for different hours of the day. A typical plan has an off-peak period, often overnight and weekends, a mid-peak period and an on-peak period, usually around the morning and early evening. Ontario is a well-known example, and the Ontario Energy Board publishes its current schedule. Some other provinces use similar or optional plans.
Tiered (or block) pricing charges one price up to a threshold of monthly or seasonal usage and a higher price above it. Your first kilowatt-hours are cheaper than your last.
Plans change, and details differ between utilities, so confirm which one applies to you and read the latest schedule.
Where solar production falls
Panels make the most power in the middle of the day, roughly from late morning to mid-afternoon. In summer, production starts early and ends late, but the shape stays the same.
That timing is not always aligned with the most expensive hours. On many TOU plans, the on-peak windows are in the early evening, when the sun is low or gone. Under some plans, midday is mid-peak or even off-peak. The result is that solar often offsets cheaper hours than the ones your bill hurts most.
| Time | Typical solar output | Typical TOU price period |
|---|---|---|
| Early morning | Low | Often on-peak or mid-peak |
| Midday | Highest | Often mid-peak or off-peak |
| Early evening | Low to none | Often on-peak |
| Overnight | None | Often off-peak |
These are generalizations. Your own plan may differ.
How the credit is calculated
Everything depends on the net metering or net billing rules. Some programmes credit exports in kilowatt-hours regardless of the hour, so a midday export can offset an expensive evening import. Others credit by rate period or apply a fixed export rate. If credits are time-blind, solar plus TOU can be favourable. If credits are tied to the hour, midday exports may be worth less than the evening power you buy.
Our article on net billing vs net metering explains the basic models, and the one on net metering in Canada covers the provincial differences. For a local example, see our Ontario guide.
Tiered rates and solar
Tiers work in solar’s favour in one way. By offsetting use, solar can keep a household below a higher tier, so the kilowatt-hours it removes may be the most expensive ones on the bill. A large electric heating load in winter can push a house into the upper tier, and solar helps most in the months when it still produces.
The catch is that winter output is low, since days are short, the sun is low and snow can cover panels. The benefit of tiers is therefore stronger in shoulder months than in the depths of December.
Batteries and arbitrage
A battery can charge when power is cheap or when solar produces a surplus, then discharge during the expensive evening window. That practice is called arbitrage. It is more attractive when the gap between peak and off-peak prices is wide and when exports earn little.
Batteries often run 5 to 15 kWh, and costs commonly add several thousand dollars, up to well over ten thousand. Where net metering is generous, the economics are weak. Where rates vary a lot by hour, or where you want backup during outages, the case improves. Read battery storage basics before you decide, and look at what happens to excess solar power to see the alternatives.
Behaviour changes that cost nothing
Even without a battery you can bend usage towards the plan.
- Shift laundry and dishwashing to the cheapest period that suits you.
- Use a timer on the electric water heater.
- Cool or heat the home ahead of an on-peak window.
- Charge an electric vehicle in the off-peak period.
A short example
Picture a household on a TOU plan with a 7 kW system. On a sunny weekday, the system exports heavily from 10 a.m. to 3 p.m., then the family uses most of its power from 5 to 9 p.m., when the sun is not available. Under a time-blind credit the exports offset evening imports well. Under a rate-period credit the household may find the exports earn less than the evening power costs. The same panels, a different bill.
Before you buy
- Find your current rate plan and its schedule.
- Ask the installer to model production hour by hour against your use, not just yearly totals.
- Check how credits work for your plan.
- Consider switching plans. Some utilities let you change between TOU and flat or tiered options.
Browse the rest of our net metering and grid hub for the credit rules that decide whether timing matters to you.
Quick answers
Are time-of-use rates good for solar owners?
It depends on how credits are calculated. Where credits are tied to the hour or rate period, evening use is priced high while midday solar earns less. Read your utility's rules.
Do I need a battery with time-of-use rates?
Not necessarily. A battery can shift energy to peak hours, but it adds several thousand dollars and works best where price differences are large.
How do tiered rates work with solar?
Solar lowers your net consumption, which can keep you below the higher tier, so the kilowatt-hours it offsets may be the most expensive ones.
Where to verify
Rules and prices change. Confirm current details with the official bodies below.