Variable-Rate vs Time-of-Use
If you are shopping for an energy plan, you have likely come across variable-rate energy plans and time-of-use or TOU energy plans. They may seem similar, but they are actually quite different and we are here to explain all their differences for you!
Variable-rate energy plans usually cost a little less than the utility’s
Houston electricity rates TOU energy plan. Variable-rate means that the price of these plans fluctuates daily – they consist of day-ahead and real-time rates. Day-ahead is when you purchase at least 12 hours in advance, while real-time is when you buy power within 15 minutes of use.
Variable-rate plans are great for people that want to save money on their energy bills but aren’t around much, need control over when they use their electricity or want to focus more on renewable energy. On the other hand, TOU rates allow you to save big by using your power during specific hours – usually at night.
Time-of-Usage Plans
TOU plans are usually more expensive than variable-rate plans because they offer discounted rates. These only work if you are aware of when you need to use power so it is important to be mindful of electric usage. TOU plans usually give you a window between two and six in the evening when electricity is cheaper.
Advantages of TOU Plans
One of the advantages of these energy plans is that your electric company will automatically shut off appliances during peak hours, allowing you to save money on your electric bill! Peak hours are generally mid-day which is why these are called
Houston energy plans Time-of-Use rates. Your utility company can tell you exactly when the peak hours usually occur and when they will occur for this month, so be sure to check it out!
If you would like to save on your electric bill while using your appliances at a higher rate, TOU plans might be the best option for you!
The Case for TOU Energy Plans: The more you save, the more you earn
Time-of-use energy plans also vary in price based on demand, but they charge customers different rates during different times of day rather than at different times throughout the year. If you use most of your power after dark and can adjust your habits, you could slash your bill by more than half.
Variable-Rate Plans
Variable-rate energy plans can save some heavy electricity users hundreds on their monthly bills, but they aren’t for everyone. If you use more than about 2,000 kilowatt-hours of power a month, you could be one of the many who will benefit from a variable-rate plan.
Advantages of Variable-Rate Plans
One major advantage to these types of power plans is that you can save money on your electricity bill. Because the price fluctuates, you are able to purchase power at a lower rate during times when it is less expensive for your utility provider.
If you are interested in having control over how much you spend on your energy bills, this plan may be the best for you.
On-peak and off-peak hours vary by location, so be sure to check out your
4Change Energy reviews and
New Power Texas reviews if you’re interested. There are many benefits to each of these energy plans, but it is important that you choose the plan that is right for you!
The Case for Variable-Rate Plans: The lower the rate, the more you save
Variable-rate energy plans charge different rates per kWh that fluctuate with wholesale market prices. With most variable-rate plans, the rate you pay decreases during times of low demand and increases when there’s more demand. It sounds counterintuitive, but it works — and for many customers, it can translate into lower bills.
Choose the energy plan that’s right for you by looking at your schedules and needs, and consider a
home warranty companies to make sure your appliances stay covered!
