One of the most inconvenient things that can happen to a homeowner is an electrical black-out, or even a brown-out where the current is reduced to below the minimum requirements for the grid. Both occur when there is a failure in an important part of the electric power grid and brown-outs usually happens when power consumption is at its height. Since the power companies don't want a complete shut-down because its more difficult to get the grid going from a complete stoppage.
The fact is that North Americans use a lot of power. And this power use is usually between the hours of 7:00am and 11:00pm meaning that from 11:00pm to 7:00am power consumption is at its lowest. So, in many areas the power companies have a time-of-use (TOU) program during this time where power is sometimes 40% of the price that it is during peak hours You may ask why the power company would drop its rates at all. The answer can be explained by the simple fact that electric power cannot be stored up and saved.
Here's how the electric generation process works: Electric power leaving the generating station is a very high voltage so that it can be transported hundreds of miles to the various substations for distribution to households. This requires a tremendous amount of power input at the generating plant and the turbines are running at maximum efficiency, meaning that once they have reached this momentum it costs less to produce electricity.
During the times when homeowners and businesses use a lot of electricity for heaters, lights and air conditioners the generating plants are running at a high capacity. But during the hours at night and on the weekends when demand for electric power decreases the power company actually loses money because it cannot just slow or stop the generators during these times. It is not feasible because powering down the turbines and then getting them back up to speed during the peak hours, even if could be done within eight hours, would be more costly than letting them run.
This is why they came up with the TOU program, to reward those who use electric power during the off-hours and, in doing so, preventing the excess bleed of cash from their profits. In short the power company gives the homeowners who go on the TOU program a break because the peaks and valleys of electrical use, and their cash flow, are lessened.
Here is how it works: Homeowners usually have a flat rate for electrical pricing. Let's say that price is 20 cents per kilowatt hour and the usage for the home is 1500 kilowatt-hours in a certain month. This would cost $300.
Now, on the TOU program the power company supplies a special time of use meter on the home so that the different hours of use can be computed for the power bill: on-peak and off-peak. The meter contains a microprocessor that is wired into a master processor beside the electrical panel in the home. This also coordinates the individual units that will automatically run on the off-peak cycle: water heater, energy thermal storage units, etc. Regular appliances like dishwashers and washers and dryers would also be operated during the off-peak hours but the homeowner would do this scheduling manually.
But Does It Save Money?
Well, here is the same situation with an off-peak system: Let's say that you use the same 1500 kilowatts but this time 1000 kilowatts, or 2/3 of the electricity, is during off-peak hours.
Kilowatt hours at peak time:
500 @ $.20 kW.h =
Kilowatts hours at off-peak:
1000 @ $.08 kW.h =
Average program cost per month
You would save $100 a month or $1200 a year. That mean, instead of $3600 a year for an electrical bill you pay $2400.
The U.S. Department of Energy has stated that you can save 5%-20% of your bill just by installing a timer on your water heater that only powers the tank in off peak, night ours. If you have a big family (6) you might want to opt for the 60 gallon tank so everyone gets a shower. And using a water tank insulator plus insulating the hot water pipes as far as you can get reach them can keep the water in the tank hot all day. The jackets, usually fiberglass batts sandwiched between two layers of a plastic material, cost around $60. The foam pipe insulators are around $1.50 for a 3 foot length.
If you run into a situation where you come home form work at 6:00pm and you absolutely need a shower there is an override switch on the control panel that will activate the tank and begin the heating process. Off course this heat will be billed at full-rate but you get the pleasure of a hot shower.
Pointers to Consider
Before you jump into off-peak power you have to do some homework:
- Monthly Consumption: In order for this to work you should use at least 600 kilowatts per month because there is a monthly charge of approximately $20 to be on the program.
- Convenience: Do you want to wait until 11:00pm to do laundry or run the dishwasher? And remember refrigerators and freezers cannot be safely put in the program
- Easy-Flow Shower Heads: This is one of the beat ways to have plenty of hot water for showering. You get the punch of a shower without the heavy flow of hot water.
- Consultation: Speak to an electrical contractor or electrician