EV Charging on Time-of-Use Rates: The Math Behind 60% Savings

Published October 28, 2026 by EnergyIQ

The cheapest fuel an electric car will ever use is the electricity you buy at the right hour. On a typical time-of-use (TOU) tariff, the same kilowatt-hour that costs 22 cents at 6 p.m. costs about 4.5 cents after midnight. An EV that charges overnight therefore pays a fraction of what the same EV pays if it plugs in during the evening peak, and the difference compounds to hundreds of dollars every year. This guide walks the arithmetic end to end with a realistic vehicle and rate spread, shows why most drivers can shift nearly all of their charging without trying very hard, and covers the wiring and tax details that determine your total cost of ownership.

The Rate Spread: Why the Hour Matters More Than the Car

TOU plans divide the day into two or three priced windows. A common shape in deregulated markets such as Texas, where retail plans indexed to ERCOT wholesale prices are widespread, is an overnight off-peak window around 4 to 5 cents per kWh, an evening peak near 22 cents, and a shoulder period in between. Flat-rate plans average the day into a single price, typically 14 to 16 cents. The U.S. Environmental Protection Agency, whose green vehicle guidance covers charging behavior alongside emissions, notes that most household EV charging happens at home and overnight, which happens to be exactly when TOU prices are lowest. Your car sits parked roughly 95 percent of the time, and the grid is emptiest while you sleep. The savings opportunity is a scheduling problem, not a hardware problem.

A Worked Example: 12,000 Miles a Year on Three Schedules

Take a representative electric sedan averaging 4 miles per kWh and driving 12,000 miles a year. That is 3,000 kWh of annual charging demand. Now price it three ways.

The blended rate in the last row assumes 90 percent of energy lands in the 4.5-cent window and 10 percent strays into the 22-cent peak, which matches what real overnight schedules achieve once you account for occasional daytime top-ups at public chargers. The result is a 58 percent saving against the flat plan, and about 72 percent against careless peak charging. Drivers who shift fully to off-peak, or who live in territories with free overnight windows, push the saving past 60 percent. In ERCOT territory, where overnight retail plans have briefly traded below 2 cents, the spread in favorable months is wider still. The math scales linearly: a pickup averaging 2.5 miles per kWh burns 4,800 kWh over the same 12,000 miles and roughly doubles every number in the table.

Shifting Is Easier Than It Sounds

Nearly every electric car sold since 2020 has a native charge schedule: you set a departure time, the car computes when to start, and it finishes just before you leave so the battery spends minimal time at high state of charge. Smart charging hardware does the same job for the wallbox side, and utilities increasingly sweeten the deal with EV-specific TOU plans that carve out a midnight-to-6-a.m. window at 2 to 5 cents. The failure mode is not difficulty, it is forgetfulness: one default restored after a software update, and the car quietly returns to charging the moment you plug in at 7 p.m. The fix is a periodic check of your charging history against your rate calendar, which is exactly the comparison EnergyIQ automates.

Charging Hardware: Codes, Safety, and the Tax Angle

Home charging equipment in the United States falls under Article 625 of the National Electrical Code, the National Fire Protection Association standard covering EV power transfer systems, and reputable hardware carries a UL certification for EV supply equipment. A 240-volt, 32-amp charger delivers about 7.7 kW, enough to add roughly 30 miles of range per hour, so a 10-hour overnight window comfortably covers a 200-mile weekly need. On the tax side, the federal alternative fuel vehicle refueling property credit can offset a share of qualified home charging hardware and installation costs, subject to current eligibility rules published by the Internal Revenue Service, and several utilities add their own rebates for enrolling a smart charger in a demand-response program. Between the hardware credit, a rebate, and a disciplined off-peak schedule, first-year savings for a new EV owner routinely reach four figures.

Five Steps to Capture the Savings This Week

First, check whether your current retail plan is flat or TOU, and what its windows actually are; the answer is on your bill's rate schedule line, not in the marketing name. Second, if you are on a flat plan, price a TOU alternative using your last month of charging energy. Third, set a departure-time schedule in the car rather than a start-time schedule, so the car picks the cheapest finishing window for you. Fourth, verify the shift after two weeks by comparing charging timestamps against your rate windows. Fifth, if you charge at 110 volts and routinely miss the window, a modest Level 2 charger shortens the required plug-in time and makes off-peak scheduling reliable. The whole routine takes under an hour to set up and pays every month afterward.