| Quick Answer: It depends on the gap between what you pay during evening peak hours and what you pay or earn the rest of the day. California evening peak rates often run 35 to 62 cents per kilowatt-hour, while exported solar earns roughly 5 to 8 cents. A battery captures that spread by storing your own generation instead of selling it cheaply. Solari Storage calculates yours from your actual bill and rate plan, and will tell you if the numbers do not justify it. |
Time-of-use pricing is now the default for California homes, and it has quietly become the most important number on your electricity bill. Not the total, and not the rate per kilowatt-hour averaged across the month, but the difference between what power costs at two in the afternoon and what it costs at seven in the evening. That difference is where a home battery makes or loses its case. This article explains how the spread works, what actually drives savings, and how to check whether your own rate plan supports the investment.
What Are Time-of-Use Rates and Why Did California Adopt Them?
Time-of-use pricing charges you different amounts depending on when you use electricity rather than a flat rate for every hour. Power costs less when demand is low and generation is plentiful, and more when demand is high and the grid is strained. Most California residential customers are now on some version of this structure.
The reason is a supply and demand pattern specific to this state. Enormous solar generation floods the grid in the middle of the day, pushing midday costs down. Then the sun sets, solar output collapses, and demand climbs sharply as people arrive home, cook dinner, and run air conditioning. That evening window is the most expensive electricity the grid produces, and time-of-use pricing passes that cost through to you.
When Are Peak Hours in California and What Do They Cost?
The expensive window typically runs from around 4 PM to 9 PM, which is precisely when your solar panels have stopped producing and your household is at its busiest. The exact hours and the exact rates vary by utility, by rate plan, and by season, with summer generally being the most expensive.
The range across the state is wide. Evening peak rates commonly fall between 35 and 62 cents per kilowatt-hour depending on your utility and the season, with San Diego Gas and Electric at the upper end during summer peak and Pacific Gas and Electric and Southern California Edison generally running somewhat lower on most time-of-use plans. Two neighbors on different plans can have materially different cases for storage, which is why an average is close to useless for a decision like this.
Why Does Exported Solar Earn So Much Less Than You Pay?
Because export compensation and retail pricing are set by completely different mechanisms. Under California’s Net Billing Tariff, exports are valued against the grid’s avoided cost at the moment of export rather than against the retail rate you pay. Midday, when your panels are producing most and the grid least needs the power, that value is low. The result is roughly 5 to 8 cents per kilowatt-hour for exported energy, around 75 percent below the previous full retail arrangement. The CPUC’s materials on the tariff are explicit that the structure was designed to push customers toward pairing storage with solar.
The practical effect is a trade nobody would accept if they had to make it consciously. You sell power at eight cents at noon and buy it back at up to sixty-two cents at six. A battery is simply the mechanism for declining that trade.
How Does a Battery Turn the Rate Spread Into Savings?
It moves energy through time. During the day, surplus solar charges the battery instead of being exported for a low credit. During the expensive evening window, the house draws from the battery instead of from the grid. Every kilowatt-hour handled that way is worth the difference between the peak rate you avoided and the export credit you gave up.
This is why the size of the spread matters more than the absolute price of electricity. A household paying high rates across the board with a narrow peak-to-offpeak difference has less to gain than a household with a lower average bill but a very steep evening peak. It is also why sizing to your evening consumption specifically, rather than to your total monthly usage, is the correct engineering approach.
What Determines How Much You Personally Save?
Four things, and none of them appear in a generic savings estimate. Your rate plan, because the spread is set there. Your evening consumption, because that is what the battery displaces. Your solar production, because that is what charges the battery for free. And your usable capacity, because a battery that empties before peak ends stops saving you anything for the remaining hours.
Round-trip efficiency matters at the margin too, since some energy is lost storing and retrieving power. DC-coupled systems avoid a conversion step that AC-coupled retrofits incur, so slightly more of what you generate ends up usable. The SolarEdge Home Battery is DC-coupled, which suits shifting energy against time-of-use rates rather than only holding it for outages, particularly if you already run SolarEdge equipment.
Can You Just Change Your Rate Plan Instead of Buying a Battery?
Sometimes, and it is worth checking before you spend anything. Utilities offer several time-of-use plans with different peak windows and different spreads, and households occasionally find themselves on a plan that suits neither their usage nor their solar. Shifting laundry, dishwashing, and vehicle charging out of peak hours costs nothing and can produce real reductions.
But there is a ceiling to that approach. You can move a dishwasher; you cannot move dinner, air conditioning on a hot evening, or a household simply being awake and at home between four and nine. Once behavioral shifting has done what it can, the remaining evening load is what storage addresses. We look at both, and at what programs your utility currently offers, which we track on our incentives and rebates page.
Frequently Asked Questions
Do I need solar for a battery to save me money on time-of-use rates?
Not necessarily, though the case is stronger with solar. Without panels, a battery charges from cheap off-peak grid power and discharges during expensive peak hours, capturing that narrower spread. With solar, it charges for free from your own generation, which widens the gap considerably.
How do I find my peak hours and my actual rate?
They are printed on your utility bill along with your rate plan name. That is one of the reasons we ask for a recent bill rather than an address. Your plan determines the spread, and the spread determines whether storage pays for itself.
Will my savings change if my utility changes its rates?
Yes, and this cuts both ways. Rates and peak windows are adjusted periodically by the utilities under CPUC oversight. Historically the trend has been toward steeper evening peaks, which improves the case for storage, but nobody can promise a specific future rate.
Is a bigger battery always better for peak savings?
No. Once the battery is large enough to carry your evening load through the peak window, additional capacity adds cost without adding much saving. This is why sizing to evening consumption rather than to total usage matters, and why we would rather specify the cheaper unit when it is the right one.
How can I get a realistic estimate for my home?
Send us a recent utility bill. We read your real usage and rate plan rather than working from an estimate or a satellite photo, then show you what the spread looks like on your own numbers, including if the answer is that storage does not pay for your home.
Ready for a straight answer? Send Solari Storage a recent utility bill and we will tell you whether storage makes sense for your home, including if the numbers say do not buy. Request your free assessment.
Key Takeaways
- California evening peak hours typically run 4 PM to 9 PM, with rates commonly between 35 and 62 cents per kilowatt-hour depending on utility and season.
- Exported solar earns roughly 5 to 8 cents under the Net Billing Tariff, around 75 percent below the previous full retail arrangement.
- A battery saves money by storing your own generation and using it during peak hours instead of selling it cheaply and buying it back expensively.
- The size of the peak-to-offpeak spread matters more than your total bill, which is why generic savings estimates are unreliable.
- Sizing should follow your evening consumption specifically, because capacity beyond what covers the peak window adds cost without adding savings.
- Checking your rate plan and shifting flexible loads costs nothing and should be assessed before any purchase decision.
