What Is TOU Rate III?
Time-of-Use (TOU) Rate III is a Con Edison billing structure that charges different rates depending on when you use electricity. Peak hours are 8AM to 12AM on weekdays, when rates are highest. Off-peak hours are 12AM to 8AM weekdays and all day on weekends, when rates drop to approximately $0.05/kWh. The spread between peak and off-peak rates is roughly 7.6x. For a full breakdown of the rate schedule, see our TOU Rate III guide.
Why Most Homeowners Do Not Know About It
Con Edison defaults residential customers to Rate I, which charges a flat rate regardless of when you use electricity. TOU Rate III is opt-in and requires a smart meter. Most homeowners never switch because they do not know it exists, or they are not sure if it will save them money. Without battery storage, TOU Rate III can actually cost more if you use most of your electricity during peak hours.
The Battery Storage Game-Changer
Battery storage flips the economics of TOU Rate III. A home battery (like the Tesla Powerwall or Enphase IQ) charges from the grid or solar panels during off-peak hours at $0.05/kWh, then powers your home during peak hours when grid rates are 7.6x higher. This is called energy arbitrage. A single battery cycling daily can save $800-$1,200 per year in rate arbitrage alone, on top of any solar savings.
Real Numbers: A Scarsdale Example
A Scarsdale homeowner using 1,150 kWh/month with a 10 kW solar system and one battery unit on TOU Rate III can reduce their annual electricity cost from $4,560 to under $600. The battery handles peak demand, solar handles daytime generation, and off-peak grid power fills in the gaps. Total savings: approximately $3,960/year. With the NYSERDA battery rebate of $250/kWh (approximately $3,375 for a 13.5 kWh unit), the battery payback is under 4 years.
Backup Power Bonus
Beyond cost savings, battery storage provides backup power during outages. Westchester experienced multiple extended outages in recent years. A battery system can keep critical loads running (refrigerator, internet, medical equipment, sump pump) for 8-12 hours depending on usage. This is increasingly valuable as grid reliability becomes a concern.
Is TOU Rate III Right for You?
TOU Rate III with battery storage works best for homeowners who have high peak-hour usage (AC, EV charging, home offices, pool pumps), are pairing with solar for maximum offset, want backup power, and have monthly bills above $200. If your usage is already concentrated in off-peak hours, the benefit is smaller.
See Your TOU Savings
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