During the daytime, the production cost of the electricity is the highest because of its peak usage. In contrast, as the usage during night time is low, the production cost decreases. Thus, Time of Use (TOU) metering is the best option for renewable energy-sources because solar power systems produce energy during the daytime peak-price period, and produce little power during the night time, when the price is low.
Basically Time of Use is a rate plan that your utility may or may not have, though most do for solar or wind. Time of Use has nothing to do with a warranty anyway; it works with a net metering (which is described next), to lower your new utility bill. Also, to assure that solar has a faster payback. Following are some basics about Time of Use.
Net Metering
During the longer days of summer, solar panels produce more electricity than one’s housing needs. So the extra energy produced is sent back to the grid for storage. On the other hand, at night time, as the sun is not shining and your solar panels are not producing, the electricity you did not use is sent back to you from the electric company. This is called net metering.
The power that your panels generate during the day time and send back to the grid is the most expensive power of the day. This power is intensely needed by the multiple factories and business and they are willing to pay for it.
Savings With Time Of Use Rate
The energy your solar panels produce is of great value. The Utility buys the energy your solar panels produce at the high day time “peak” rate with Time of Use Rate. So here is the big savings as discussed under:
1. As the sun is not shinning in the night and you buy some or all of that power back, you buy it back at the cheaper night time rate. So you sell the solar electricity high, for instance, 14 cents a watt, and buy back the night time “off peak” electricity at 7 cents a watt. Here you make a profit of 7 cents a watt on the energy your panels produce! That’s what called Time of Use.
