Saving Money...On Electricity?
Welcome to Saving Money with Andrew!
Three weeks ago, our electric company sent us an interesting offer. We could either:
Keep paying ~$0.20 per kWh (kilowatt-hour) for our electricity
Or, we could switch to a “Time of Use” plan in which we’d pay $0.24/kWh from 6am-11pm, but only $0.12/kWh from 11pm-6am.[1]
Even more helpfully, they linked to a calculator showing us how much this plan would have cost us last year compared to their normal rates.
In our case, there were big savings to be had. In addition to a small immediate savings, the calculations did not yet factor in our new electric vehicle (EV), which we charge once a week and now accounts for 10-25% of our total electric usage (more in winter, less in summer).
The car uses about 250 kWh per month, which costs $50/month at our current rates. But with the “Time of Use” plan, if we only charge it during the nighttime hours, we’d spend a mere $30/month, saving us $240 per year on EV charging alone.
But how can we make sure to only charge the car between 11pm-6am? It’s easy—our Chargepoint charger (as well as most other home EV chargers) lets us enter our utility rate plan, optimizing charging to occur during those nighttime hours when power is cheap. It takes about 7 hours to charge our car, so charging can fit perfectly in that low-cost window.
Learning about this offer naturally raised two questions:
Why do utilities offer time of use plans?
Most electric utilities face a big problem—electricity demand varies significantly based on time of day, but a large portion of power generation in many states generates power 24/7 (e.g., nuclear, which is a large portion of our state’s electric supply) or on a less predictable schedule (e.g., solar and wind). Because demand naturally peaks in the evening (in warm months), or during the day (in winter months), utilities then need to rely on more expensive or (often) more polluting on-demand fossil fuel sources. And then, during the nighttime hours, electricity demand falls substantially.
By offering plans with higher peak costs but lower nighttime pricing, utilities encourage consumers to shift more electric demand to off-peak hours, minimizing stress to the grid and reducing reliance on high-cost/high-polluting on-demand power. And the consumers who opt into these plans typically have more ability to shift their demand, whether because they own an EV, are willing to reduce peak time AC usage, or simply have a different schedule.
Is there anything else we can do to optimize electricity usage to save even more money?
I did significant research and while certain appliances allow you to delay operation to the nighttime hours (e.g., our dishwasher has a delay feature), the electric consumption is so low that it’s hard to justify the hassle. Delaying all of our dishwashes to 11pm would save us about $20/year.
But in the next 5-10 years, increased adoption of solar and (eventually) home batteries are likely to greatly increase the potential of shifting usage. For now, solar panels don’t make sense for us, but I am really excited about a future in which we install solar panels and a battery system in our house, allowing us to dramatically reduce our reliance on the grid while also smoothing our consumption so that we only need to use electricity from our utility during off-peak times. The future is interesting.
But for now, we’re happy to save an extra $240/year by simply clicking a few buttons in our online electric utility account. And whether you have an EV or not, it’s worth checking with your utility to see whether they offer these plans and whether they might be a good deal for you.
And now, Andrew’s pick(s) of the week:
I can’t get enough of Mini Metro, the “sublime subway simulator” game available on most platforms. It’s a seemingly simple game that puts you in charge of designing a subway system in one of many cities. Seeing your passengers (simple shapes) delivered to their destinations is extremely calming if you have a temperament like mine, and the daily challenges are fun.
Also:
Times are changing (real estate): Boise’s Housing Market Boomed Early in the Pandemic. Now It Is Cooling Fast
Times are changing (retailers): Retail’s ‘Dark Side’: As Inventory Piles Up, Liquidation Warehouses Are Busy
Might be optimal from an economic perspective, but pretty off-brand for the Boss: The Case of the $5,000 Springsteen Tickets
I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.
[1] We use 1,000-2,400 kWH per month (34-79 kWh per day), depending on the season.