TOU Battery Optimization: Solar Charge Schedules

Last updated: November 2026

Time-of-use (TOU) battery optimization means scheduling a solar battery to charge when electricity is cheap and discharge when it is expensive. In California, the value comes from the gap between the cheapest and the most expensive hours of the day. Under NEM 3.0, midday solar exports are credited at hourly values, so holding that energy for the evening often earns more than exporting it.

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TL;DR: Fill the battery from midday solar (or from the grid overnight, where your tariff allows it), then discharge it through the utility’s peak window. SCE’s published rates show a 38 cent peak spread on its TOU-D 5-8PM plan in summer and a much smaller spread in winter. The worked examples below use those rates and state every assumption.

In this guide:

• How TOU rate spreads create battery value, using SCE’s published rates
• Charge and discharge windows by season
• Why NEM 3.0 (the net billing tariff) favors storing midday solar
• How commercial sites stack demand charge reduction on top of TOU savings
• How to choose a battery controller type
• Battery sizing, cycle depth and payback

What Time-of-Use Battery Optimization Means

Time-of-use battery optimization is the practice of charging energy storage during low-rate periods and discharging during high-rate periods to cut the electricity bill. It treats the battery as a bill-reduction tool, not only as backup power.

Self-consumption mode stores excess solar and feeds it to the home after sunset. It does not look at the clock or the tariff. If the battery fills at noon and the peak period starts at 4 PM, self-consumption still works, but it may not discharge at the times that save the most.

Arbitrage, in plain terms, is buying low and avoiding high. If you charge at 34 cents per kWh and discharge to avoid buying at 72 cents per kWh, the 38 cent spread is the gross value of each kWh you move, before efficiency losses.

The same logic applies to solar charging. Each kWh you store is a kWh you did not export, so the real cost of solar charging is the export credit you give up. That is why the export rate matters as much as the import rate.

Installers can test these strategies at the design stage. Cloud solar design software lets you run hourly production against a tariff before you specify hardware.

How TOU battery optimization works:

1. Find the utility’s peak and off-peak hours for the customer’s plan.
2. Charge the battery from solar or from low-rate grid power.
3. Discharge during the peak window to offset the most expensive imports.
4. Adjust the schedule for summer and winter rate periods.

How California TOU Rate Spreads Create Battery Value

California’s large utilities split the day into pricing periods, and the gap between the lowest and highest price sets the ceiling on arbitrage value. SCE publishes current rates on its Time-Of-Use Residential Rate Plans page, summarized below as of November 2026. Rates change, so check the live page before you quote.

Source: SCE Time-Of-Use Residential Rate Plans, rates before the baseline credit, spread calculated here.

PG&E and SDG&E also run TOU plans with their own peak windows and rates. Both publish them on their own sites, and SDG&E’s Solar Billing Plan page describes on-peak, off-peak and super off-peak periods and notes that storage can extend solar into the evening peak. Pull the exact tariff for each customer instead of relying on a general table.

Worked Example: 10 kWh Battery on SCE TOU-D 5-8PM

These figures are an illustration built from SCE’s published rates plus stated assumptions. They are not a market average.

Assumptions: a 10 kWh battery with 90% round-trip efficiency, discharged once per summer weekday through the 5 PM to 8 PM on-peak window, with 9 kWh delivered to the home at 72 cents per kWh. For solar charging, we assume a midday export credit of 8 cents per kWh. That credit is an assumption for this example, since actual export credits vary by hour and month.

Over roughly 85 summer weekdays, that is about $260 with grid charging or about $480 with solar charging. Winter and weekend spreads are smaller, so the annual total depends on the other months and on how often the battery cycles. Treat these as order-of-magnitude figures and model the real tariff.

Charge and Discharge Schedules by Season

A workable default is to charge from midday solar, discharge through the utility’s peak window, and keep overnight grid charging as a backup for low-sun days. The right windows come from the customer’s tariff, not from a general rule.

Summer brings long solar days, so a PV system can usually refill the battery well before the peak window. In winter, shorter days mean less solar reaches the battery after the home’s daytime load is served. You then have two choices: reduce the discharge depth so the battery lasts through the peak window, or enable grid charging overnight to guarantee a full pack.

Grid-charging rules differ by utility, tariff and program, and some interconnection agreements restrict grid-to-battery charging. Check the local tariff and the customer’s interconnection agreement before you enable it. A misconfigured system can break program rules or trigger charges the customer did not expect.

NEM 3.0 Forces a Strategy Shift: Self-Consumption vs Arbitrage

NEM 3.0 is the common name for California’s net billing tariff (NBT). The CPUC states that customers applying for interconnection since April 15, 2023 take service on the NBT, and that the export credit is based on the value of the energy sent to the grid at each hour of the day, per its CPUC customer generation page. Under older NEM 2.0, exports earned a credit close to the retail rate, so self-consumption was less important.

The point of the comparison is timing. A kWh exported at midday earns the hourly export credit, while the same kWh stored and discharged at peak avoids buying a kWh at the peak rate. SDG&E’s Solar Billing Plan page says the plan is designed to encourage solar paired with batteries so that stored energy covers the evening peak.

Worked Example: Export vs Store on One Summer Day

Assumptions: a 7.6 kW solar system on SCE TOU-D 5-8PM in summer, with 25 kWh left after daytime home use. The 8 cent export credit is an assumption for illustration. The battery is 10 kWh at 90% round-trip efficiency.

• Option A, export all 25 kWh: 25 kWh × $0.08 = $2.00 credit.
• Option B, store 10 kWh and export 15 kWh: 15 kWh × $0.08 = $1.20 credit, plus 9 kWh delivered at 72 cents = $6.48 avoided. Total: $7.68.

Storing adds $5.68 on that day compared with exporting everything. The gap depends entirely on the export credit and peak rate, which is why a quote should use the customer’s actual tariff. Use solar proposal software to show the hour-by-hour result.

Commercial Demand Charge Stacking with TOU Arbitrage

Commercial and industrial customers have a second value stream: demand charges, which bill the highest power draw in a billing period (in kW), not the total energy used. A battery that supplies power during the building’s peak interval lowers the billed demand.

Demand charge reduction equals the kW the battery shaves multiplied by the tariff’s demand rate. For illustration only, if the battery lowers the billed peak by 80 kW at an assumed $14 per kW-month, the monthly saving is 80 × $14 = $1,120, or $13,440 per year. Real tariffs differ, and the saving holds only if the battery reliably covers the peak interval.

A battery energy storage system can do both jobs, but power rating and energy capacity pull in different directions. Size the battery for the peak-shaving target first. Pull 12 months of interval data, identify the highest demand peaks, and calculate the gap between those peaks and the average load in the same windows. Then use the remaining capacity for TOU arbitrage. If you size purely for energy arbitrage, you can undersize the inverter and limit peak-shaving power.

Choosing a Battery Controller for Installers

Hardware matters, but the control software sets the schedule that earns the savings. Evaluate controllers on three questions: can it follow a TOU schedule, does it forecast solar and load, and can you override it when the tariff changes. Check each manufacturer’s own documentation for the TOU and grid-charging modes it supports.

At the proposal stage, solar software can run production and consumption against a tariff so you can show the customer what a given schedule would save. Use whichever tool the customer’s controller supports for the live schedule, and keep the proposal model and the controller settings in sync.

Battery Sizing, Cycle Depth, and Lifetime Economics

Size the battery to the energy the customer uses during the peak window, then adjust for backup needs and budget. Oversizing leaves capacity unused and stretches payback. Undersizing leaves savings on the table during the widest spreads.

Cycle depth is a trade-off between daily savings and battery life. Cycling deeper or more often earns more per day but can use up the battery’s rated life sooner. Check the manufacturer’s warranty terms for cycle and throughput limits before you set an aggressive schedule. Replacement cost belongs in the lifetime net present value calculation, along with depth of discharge limits.

Backup reserve also has a cost. Holding charge for outages means that energy cannot be used for peak shaving, so agree the reserve level with the customer. If grid outages are rare in the area, a smaller reserve leaves more capacity for daily savings.

On payback: in the SCE worked example above, summer weekday arbitrage alone earns a few hundred dollars a year. A battery’s economics therefore usually rest on several value streams, including incentives, demand charge reduction where it applies, and backup value. Test each one separately in the model. See the battery sizing guide for a sizing walkthrough.

Before specifying hardware, use PV design software to test battery sizes against real tariffs, and confirm the array can fill the battery in winter.

Conclusion

TOU battery optimization works when the rate spread is wide and the schedule matches the tariff. SCE’s published rates show a summer weekday spread of up to 38 cents per kWh and a much smaller spread from October to May. Summer weekday cycling in the worked example earns a few hundred dollars a year, so the full case for a battery needs more than arbitrage.

• Pull the customer’s exact tariff and test the schedule in both seasons.
• Check grid-charging rules before you program overnight charging.
• Size for the peak-window load, and add demand-charge value for commercial sites.

For installers, the next step is to model the schedule during design. You can book a SurgePV demo to see a battery-plus-solar proposal built on a real tariff. For related reading, see adding battery storage services.

Frequently Asked Questions

What is the best time to charge a solar battery on a TOU rate?

Charge from midday solar surplus, or overnight on grid power where your tariff allows it, and discharge during the utility’s peak window. On SCE’s TOU-D plans the summer weekday peak runs 4 PM to 9 PM or 5 PM to 8 PM. Check your own tariff and interconnection rules before enabling grid charging.

How much can you save with a battery on time-of-use rates?

Savings depend on the rate spread, battery size and how many days you cycle. In the worked example here, a 10 kWh battery on SCE’s TOU-D 5-8PM plan earns about $3.08 per summer weekday from grid charging or $5.68 from solar charging. Model your own tariff to get a real figure.

Should I charge my battery from the grid or only from solar?

Charge from solar when the export credit you give up is lower than your off-peak rate, and charge from the grid only where your tariff and interconnection agreement allow it. Grid charging gives a guaranteed full battery on cloudy days. Rules differ by utility and by program, so confirm them first.

What is the difference between self-consumption and TOU optimization modes?

Self-consumption stores excess solar and uses it when the sun drops, without looking at rate timing. TOU optimization schedules charging and discharging around the rate periods so the battery is full before the peak window. Under net billing the second approach usually earns more, because midday exports are valued below evening imports.

How does NEM 3.0 affect battery optimization strategy?

NEM 3.0, formally the net billing tariff, values exports by the hour, so storing midday solar for the evening usually beats exporting it. The CPUC says the net billing tariff applies to customers who applied for interconnection on or after April 15, 2023. Export credits come from the tariff, so check the current schedule.

What size battery do I need for TOU rate arbitrage?

Size the battery to the energy you use during the peak window, then adjust for budget, backup needs and the inverter’s power limit. A home using 8 kWh between 4 PM and 9 PM needs usable capacity near that figure. Commercial sites should size for demand peaks first, then use spare capacity for arbitrage.

Can battery storage eliminate demand charges for commercial buildings?

Rarely. A battery lowers the billed peak only by the kilowatts it can deliver during the peak interval, and any peak it cannot cover still sets the charge. Pull interval data, find the top peaks, and size the battery’s power and energy to shave those first.