Understanding time-of-use savings with solar
Why solar saves more under time-of-use billing
Solar production is concentrated in daytime hours, which is usually when time-of-use peak rates are highest, so the kWh solar offsets are worth more than an average kWh. A business using 62,000 kWh a month, with 40% falling in the peak window at $0.19/kWh and the rest off-peak at $0.09/kWh, pays about $8,060 a month. If solar offsets 65% of that peak-window usage, the bill drops to about $4,997.20, saving roughly $36,753.60 a year. Compare that against a flat-rate estimate in the commercial solar payback calculator to see the TOU premium in action, and the U.S. Energy Information Administration's electricity data hub is a useful reference for how common time-of-use rate structures are becoming across different utility territories.
How much peak-window usage solar can realistically offset
It depends on how closely your peak TOU window overlaps with peak sun hours and how large your system is relative to that window's usage. A well-sized system for a business with a mid-afternoon peak window can often offset 50% to 75% of usage during that window, while a narrower evening peak window sees a much lower offset from solar alone. If your peak window skews toward evening or overnight, the peak demand battery offset calculator is worth reviewing since battery dispatch isn't tied to sun hours, and the battery sizing for time-of-use arbitrage guide covers that same evening-window problem from a residential angle.
How this relates to standard usage savings
It adds to it. Every kWh solar produces still offsets a kWh you'd otherwise buy, but under time-of-use billing, the kWh offset during peak hours are worth more than the same kWh would be under a flat rate. That's why the same solar system can produce meaningfully higher savings on a time-of-use rate than the sizing calculators show using a blended average rate, including the system size by square footage tool and similar single-building calculators. The EIA's commercial buildings energy survey can help you compare your own hourly usage pattern against typical profiles for your building type, which matters more under TOU billing than under a flat rate.
Whether to switch rate structures before or after installing solar
Run the numbers both ways before switching, since a time-of-use rate without solar can sometimes cost more than a flat rate if your peak usage is high. Once solar is sized to offset a meaningful share of your peak-window usage, time-of-use rates typically become more favorable, so it's worth checking with your utility about switching after the system is sized. The billing demand vs. usage charge tool can help you confirm exactly how your current bill is structured before making that call, and our grid and off-grid section covers how different interconnection setups affect what your exported energy is worth if net metering is also part of the decision. A battery can cut demand charges as well as store power. The battery charge time from solar calculator in our Battery & Storage section can help you size one for your peak load.