Back in the day, utilities used to charge a flat rate for electricity. Now they use something called “time of use” (TOU) pricing in an effort to make market pricing more efficient. TOU pricing charges you based on how much energy you use, as well as the time that you use it. With TOU pricing, knowledge is power. It’s all about having access to up-to-date, reliable data—something that RateAcuity knows firsthand. If you know the peak hours when large amounts of energy are being used, you can avoid using energy during that time and save money. That’s because energy costs less when fewer homes are using it. You’re also helping reduce strain on the power grid and potentially lower market prices.
Unfortunately, some electricity suppliers are not interested in introducing TOU pricing because it would ultimately help their competitors by reducing general prices on the wholesale market. A possible solution is for the government to regulate these distributors by making sure they charge extra when suppliers use the system during peak hours. Then, electricity suppliers might have more interest in TOU pricing.
Another example of how increased knowledge and regulation could greatly impact our energy usage—and the environment—is the electric vehicle market. A recent study for EVgo found that peak demand charges can account for more than 90% of electricity costs at EV charging stations. This makes electricity much less competitive than current gasoline prices.
One way to address this issue is through state legislatures. Again, the right regulations and fee structures can support EV usage, as long as regulators and utilities work together to create a sustainable business model. There’s also an opportunity to integrate solar energy and other intelligent storage solutions with EV charging stations.
With increased knowledge, smarter energy storage and legislation that puts the environment first, we’ll be able to continue to move towards a sustainable, eco-friendly energy infrastructure. It all starts with having access to accurate data, and then deciding where to go from there.