How to Calculate Time-of-Use Electricity Costs
When electricity prices change during the day, calculate the energy used in each price period separately. A device that runs hardest at peak times can cost more than a simple average rate suggests.
Match usage to the price period
Daily cost = peak kWh × peak price + off-peak kWh × off-peak price
Use your plan’s actual hours, prices, seasons, and weekend rules. “Night” is not a universal off-peak definition. The examples below use invented periods and rates to demonstrate the calculation.
If your meter only records a single cumulative kWh total, it cannot tell you how that energy was divided between price periods. Interval readings or a reasonable period-by-period estimate are needed.
Example 1: a steady 100 W load
| Period | Energy | Daily cost |
|---|---|---|
| Peak: 4 hours | 0.4 kWh | $0.12 |
| Off-peak: 20 hours | 2.0 kWh | $0.24 |
| Total | 2.4 kWh | $0.36 |
The effective rate is $0.36 ÷ 2.4 kWh = $0.15/kWh. With this exact pattern every day, the annual cost is $131.40.
Example 2: more power during peak hours
Now suppose the device draws 300 W during those 4 peak hours and 50 W during the 20 off-peak hours. Peak usage is 1.2 kWh, costing $0.36. Off-peak usage is 1.0 kWh, costing $0.12.
Total usage is 2.2 kWh at $0.48 per day. Its effective rate is about 21.82¢/kWh. The 15¢ rate from the steady-load example would produce only $0.33 per day and understate this different schedule’s cost.
Effective cents per kWh = total cost in dollars ÷ total kWh × 100
Use the result in the calculator
For the second example, enter 300 active watts, 50 idle watts, 4 active hours, 24 total hours on, and about 21.82¢/kWh. This approximates that specific schedule. The calculator does not apply a tariff calendar automatically.
Recalculate the effective rate if the workload shifts. The replacement calculator uses the same rate for both devices, so compare period-by-period costs separately if their daily load patterns differ substantially.
What moving a task can save
In this example tariff, moving 1 kWh from 30¢ to 12¢ saves 18¢ while using the same energy. A change only helps if the job can move and the tariff actually rewards that time. Comparing complete rate plans also requires checking fixed fees, all other usage, and any additional billing conditions.
Sources and calculation notes
Worked examples are Always On Cost calculations using the stated assumptions, not product tests or utility quotes. Unless noted otherwise, estimates use a fixed rate and repeating daily schedule, with 365 days per year. USD amounts are rounded for display.