Target Audience: U.S. homeowners / installers

Article Type: Scenario & Solution

Word Count: ~1,000 words

If you live in California, New York, Massachusetts, or any of the growing number of states with Time-of-Use (TOU) electricity rates, you already know the drill: power costs more during peak hours and less during off-peak hours. A typical California TOU plan might charge

0.15/kWh from midnight to 6 AM. That's nearly a 3x price difference within the same day.

The question is: are you taking full advantage of that gap?

What Is Time-of-Use Optimization?

TOU optimization is the practice of strategically scheduling when your home energy storage system charges and discharges to minimize your electricity costs. Instead of drawing power from the grid during expensive peak hours, your battery discharges stored energy to power your home. Then, during cheap off-peak hours, the system recharges.

It sounds simple — and conceptually, it is. But getting it right requires a system that can intelligently manage multiple energy sources (solar, battery, grid) and automatically switch between them based on real-time electricity rates.

How iHEMS® Makes It Work

Candlon's platform features products compatible with the iHEMS® (Intelligent Home Energy Management System), which serves as the central hub for coordinating your solar panels, battery storage, grid connection, and household loads. Through the iHEMS® app and cloud platform, you can:

• Monitor real-time energy flow — See exactly how much power your solar panels generate, how much your battery stores, and what your home consumes at any given moment.

• Set charge/discharge schedules — Define specific time windows for battery charging (during low-rate hours) and discharging (during high-rate hours).

• Prioritize energy sources — Choose whether to prioritize solar, grid, or battery power based on your rate plan and backup needs.

The system supports multiple output modes that directly impact TOU performance:

A Practical Example

Consider a household on a California TOU plan with a 10kWh battery:

1. Midnight – 6 AM (Off-peak, $0.15/kWh): The system charges the battery from the grid at low rates. Cost: ~$1.50 for a full charge.

2. 6 AM – 4 PM (Mid-peak, $0.25/kWh): Solar panels power the home and top up the battery. Any excess solar feeds the battery first.

3. 4 PM – 9 PM (Peak, $0.40/kWh): The battery discharges to power the home, avoiding expensive grid electricity. Savings: ~$2.50/day compared to drawing from the grid during peak.

4. 9 PM – Midnight (Off-peak): Battery recharges if needed for the next cycle.

Over a month, that's approximately $75 in savings — just from smart scheduling, without changing your energy consumption habits.

Important Considerations

Charging mode matters. If your system is set to "solar-only" charging mode, the battery won't charge from the grid during off-peak hours. For TOU optimization, make sure your charging mode is set to "hybrid" (solar + grid) or "grid" so the battery can take advantage of low off-peak rates.

Don't over-discharge. If you set your discharge threshold too low, the battery may not have enough reserve for backup power. A common recommendation is to maintain at least 20-30% SOC as emergency reserve while still optimizing for TOU savings.

SOC thresholds need tuning. One common issue: setting charge/discharge SOC thresholds (e.g., charge at 50%, stop at 90%) without considering the output mode. In "battery priority" mode, the system prioritizes battery discharge — which means it won't simultaneously charge. If you want the battery to charge to 90% overnight, switch to "grid priority" mode during charging hours.

Getting Started

TOU optimization is one of the most immediately impactful features of a smart home energy system. If your utility offers a TOU rate plan, the savings can offset a significant portion of your system investment over time.

Candlon offers a selection of hybrid inverters and battery systems compatible with iHEMS®, all pre-configured for U.S. residential split-phase power. Explore our product catalog or contact our team to design a TOU-optimized system for your home.

[Explore Candlon Energy Solutions →](https://www.candlon.com)