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Sunday, March 24, 2024

6 Cent Electricity

The average electricity rate in the U.S. is currently 15.73 cents per kilowatt-hour. Hawaii has the highest average electricity rate of 41.6 cents per kilowatt-hour. While, North Dakota has the lowest average electricity rate of 10.23 cents per kilowatt-hour.

These are averages, so I'm sure there are some electrically co-ops out there that are cheaper. I'm not on one of those. Yet, my electric bill is only 6 cents per kWh. 

To be clear, my utility does not charge 6 cents to everyone; the standard residential rate here is 17.53 cents per kWh. This is just over the national average, yet I'm paying well below the lowest state average (North Dakota's 10.23 cents).

To get the 6 cent rate I had to optimize. This optimization required home energy storage batteries, solar panels, and changing rate plans.

The Plan

We have solar panels, but annually, they do not produce enough to zero-out our electricity bill. However, maybe we can use this energy to not only reduce the amount we purchase from the utility, but also to reduce the price we pay for the electricity that we do buy.

Our plan was to switch from the standard flat rate plan to the time-of-use (TOU) rate schedule that our utility offers. This TOU rate schedule charges more than the flat rate during peak hours (29 cents) and also more during mid-peak at 22 cents, but TOU charges significantly less than the basic rate during off-peak (6 cents). So, our plan was to reduce or eliminate all non-off-peak grid usage by using solar and batteries. As I said, our PV system is not big enough to offset all of our energy needs, but (with batteries) maybe it can eliminate our peak and mid-peak usage. 

A Sunny Day

Here's a graph of our solar production, home usage, battery activity (3 Powerwalls), and grid usage on a cool and sunny spring day.

data was collected via the netzero app

Let's breakdown the more important of these. First, our home's usage. This is where most of the energy goes, so let's start there. You can see in grey, overnight we're using the grid to power our home. This is when the grid has surplus capacity and when we get that nice low 6 cent rate. Increasing usage during these hours means that the infrastructure that's already deployed, is better utilized.

Morning (6AM - 10AM): Once 6AM arrives, the first peak rate window starts, and the battery takes over (shown in green). It will be another hour or so before the sun comes up. As the solar panels wake up, they take over and the battery ramps down.

Mid-day (10AM-5PM): For the bulk of the day solar powers our home, covering the mid-peak and the start of the evening peak window. 

Evening (5PM-10PM): There's a second peak window from 5PM - 8PM; the sun sets during this time and the roles of the battery and solar are reverse from their morning dance. As the sun sets the battery output ramps up, filling in the gaps the dimming light cannot provide. Once the peak rate period ends at 8PM, the battery will use whatever energy is left over above its outage/backup reserve to power our home during the mid-peak from 8PM till 10PM.

Night (10PM - 6AM): We've made it to the off-peak hours. This is when we'll charge up our battery and our electric cars. 

We looked at our home's use, now let's look at the grid activity since that's what will determine the bill.

Morning (6AM - 10AM): When the morning peak rate kicks in, we stop drawing power from the grid. As the solar ramps up and starts producing more than our home needs, the surplus is feed to the grid, running our meter backwards during peak prices. 

Mid-day (10AM-5PM): Once the peak has passed, that surplus solar goes towards recharging our battery rather than the grid, you can see the gap in the solar from 10AM till 11AM. Once the Powerwalls are full, the surplus solar goes again to the grid. By 5PM our surplus solar production has nearly stopped. This was about a week before the spring equinox, so the sunsets will keep getting later over the next few months.

Evening (5PM-10PM): We were effectively off grid for this time during the evening peak rate time. 

Night (10PM - 6AM): You can see the energy use from the grid jump as soon as the off-peak rate started. The green is area is going to charge the batteries and the blue is running our home. 

Wrapping Up

For this day, we our net usage was negative 7.2 kWh. So we could have been off grid for the entire day. Instead, we were active positive participants. We supplied energy to the grid during the peak and mid-peak hours. We didn't import from the grid at all during these times of highest demand and we used the grid at off-peak times when there's surplus supply from the plants that can't just shut-off or the massive wind turbines in the gorge that often spin the hardest during nightly winds. It's nice to be positively contributing, greening the grid, and getting a cheaper electricity rate even on the days that we're not net positive.


If you're considering Tesla for your solar project, you can use my referral code (https://ts.la/patrick7819) for $500 off and I'll receive referral points for Tesla merch.


  1. Thanks for sharing and explaining so clearly. I have an EV and plans to go all in with solar, batteries and heatpump. But I write from the uk where we can opt into half hour metering which then lets us chose similar deals to what you described. Our normal cost of electricity varies a bit around the country, was probably 25p /kWh, shot up to double that with the invasion of Ukraine and recently returned to around 30p. My deal lets me have 6 hours overnight at 7.5p (it was 5p pre war), which I use to fill the EV and run kitchen appliances.
    Interestingly I don’t think I am paying a premium for day time electricity. Which is logical but historically we too used to pay more in the day if we wanted cheap at night. Logically they must make money at the normal day rate so do not need to mark it up further!
    When I get a battery and solar apparently we get paid 15p to export. And yes you can fill your battery at 7.5p and sell it back to them at 15p. As you say thus us becuase both acts benefit the grid so fair that we should benefit too.
    Can’t to join you in a similar set up.
    PS your site was recommended by Bodie from Kilowatt podcast.

    1. Thanks for the kind words. I hope you can have a similar setup soon too.
      I listen to the Kilowatt podcast and was happy hear him mention my blog. To return the favor, I have given him a shout out or two on the podcast/YouTube show I'm on (The Tesla Life) too.