Why does time-of-use cost many homes more on its own? Under Xcel Energy’s Minnesota Time-of-Use rate, the most expensive hours to purchase energy are from 6 to 9 p.m. on weekdays and the least expensive are midnight to 6 a.m. Most households do their cooking and, in summer, most of their cooling, in that evening window. Without a way to cover daytime use or move evening use, the higher evening prices can outweigh the overnight “off peak” discount. Our guide to Xcel’s time-of-use hours lists the program’s periods and seasonal prices. Our post on whether time-of-use is worth it covers homes without solar.
What do solar panels change?
Panels produce most of their
energy from mid-morning to mid afternoon, which falls in Xcel’s base period. During those hours, the home runs on its own solar production and sends the surplus energy into the grid for a bill credit under net metering.
That leaves the evening and the overnight hours as times your home would still buy from the grid. Those are also the two windows when the time-of-use pricing differential is highest. Because the panels already cover so much of the day, the household only has to manage energy usage (and cost) for a few weekday evening hours instead of its whole routine.
Where do the savings come from?
On a flat-rate energy plan, a kilowatt-hour costs the same at noon and at midnight, so the timing of your energy usage (power purchases) doesn’t matter. On time-of-use plan it does. A solar home that moves its remaining grid use into the overnight window will pay the lowest available utility price on most of the power it still buys, and the solar panels cover the daytime.
How much that adds up depends on how your utility credits exported solar under a time-of-use plan, how much of your total annual energy use your system covers, and how much evening usage your household can move. That mix is different for every home, which is why we don’t generally quote a rule of thumb. Our customer case study shows what it looked like for one Minnesota home.
What can potentially work against a solar home on time-of-use?
A system that covers only a small share of your annual use, which leaves more evening and overnight power to buy
Electric heat that runs on winter evenings, when the panels aren’t producing
Large evening loads that can’t move, such as cooking for a big household or cooling a second floor that heats up by late afternoon
If one of these describes your home, time-of-use can still work, but it needs a closer look before you switch.
How do you know if it will work for your home?
It takes two sets of data: your hourly usage, which Xcel’s smart meters record, and a production estimate for your roof. We line them up and price your home on the standard rate and on time-of-use side by side. If time-of-use doesn’t come out ahead, we’ll say so. Our solar and time-of-use page shows an example of the tests we run to make sure we pick the best option for each homeowner.
Schedule an energy assessment and we’ll run both scenarios for your home. We work with homeowners across the Twin Cities, including solar installation in Minneapolis and St. Paul.
Powerfully Green Solar designs and installs residential and commercial solar across Minneapolis, St. Paul, and the surrounding Twin Cities suburbs. We size and price every system against your own usage and your utility’s current rate options, including time-of-use.
Building License #BC708267 | Electrical License #EA714757.
Powerfully Green Solar designs and installs commercial solar systems for businesses across the Minneapolis and St. Paul area, working through site assessment, permitting, interconnection, and installation as a single coordinated process. Every project starts with a look at your building and your actual energy usage rather than a generic estimate. If you are weighing commercial solar for your facility, talk to a specialist about what your site can support.