Blog Updated: September 2026
For customers of the largest utility company in the state, Xcel Energy, “time of use” billing is now the norm. With time of use rates, residential customers are charged based on when they use the energy instead of simply how much energy they use. The recent shift of on-peak hours to be later in the day didn’t do solar customers any favors. That being said, it’s easy to beat time of use rates if you have home battery backup since you can charge your batteries with cheaper morning energy and discharge during on-peak hours. This is known as rate arbitrage.
Read on to find out more about time of use rates, how solar fits in, and how battery backup can help you beat the highest rates.
Key Takeaways about Xcel Energy’s Time of Use Structure
- What is time of use? Time of use rates mean that instead of being billed the same rate for all the energy that you use, you’ll instead pay different rates for energy depending on what time of day you use energy.
- When are Xcel’s on-peak rate hours? The hours between 5-9 p.m. Monday through Friday are defined as on-peak hours. Off-peak hours, when the price is the lowest, occur at all other times plus holidays.
- Rate arbitrage: Rate arbitrage is when homeowners with battery storage charge their battery with off-peak electricity and then use that stored energy during on-peak hours to save money.
How Do Time of Use Rates Work?
As the name suggests, time of use rates mean that instead of being billed the same rate for all the energy that you use, you’ll instead pay different rates for energy depending on what time of day you use energy. Xcel breaks this down into two different time slots and rates change seasonally. To learn about Fort Collins’ “time of day” structure, check out this blog. Fort Collins and Xcel Energy have different on-peak and off-peak hours as well as different rates.
As the largest utility in our area, here are additional details about Xcel Energy’s time of use rates:
Source: Xcel Time of Use Webpage
Time of use rates are not new to the Colorado Front Range – in fact, Fort Collins has been using this approach since 2018. Beginning in January 2021, Xcel started installing smart electric meters on the homes of residential customers that were participating in the time of use trial. As of spring 2026, Xcel Energy is in the final stages of this system-wide upgrade to replace all the old meters. Having deployed roughly 1.6 million smart meters, installations are almost complete.
Once a customer’s new smart meter is installed, they will automatically be switched over to time of use pricing. These smart meters will capture your electricity use data at more frequent intervals than a standard meter. Customers will not be charged for these new meters.
How Will Time of Use Affect My Xcel Energy Bill?
During peak hours of the day (5-9 p.m.), energy usage is more expensive. This is because around this time of day, demand for electricity increases. People usually come home from work and school within these peak hours and, as a result, their energy usage goes up. In the summer, peak hours are also the hottest time of the day. This is when air conditioners are working their hardest and running more frequently to keep homes comfortable.
Depending on your lifestyle, time of use rates could cause your Xcel Energy bill to either go up or down. To avoid rising costs, you can save money by doing heavy energy usage activities outside of peak hours. This includes things like running the dishwasher, washing machine, or dryer. Homeowners can also run their air conditioner earlier in the day to “pre-cool” their home and then reduce cooling during peak hours to save more.
How Does Solar and Battery Backup Fit into Time of Use Rates?
We have good news – time of use rates are often a positive for customers with solar and battery backup. Many solar systems will still be producing energy during summer on-peak hours, so it can offset the energy expenses that you may accrue during that window of time. We have heard from a number of our solar customers in Fort Collins that they’ve seen their utility bills decrease on a time of use rate, especially since summer on-peak hours for Fort Collins Utilities customers are from 2-7pm. For Xcel customers, where the on-peak hours are later in the day, solar alone doesn’t have as much potential to impact their electricity bill.
If you’d like to really beat peak rates, adding battery storage to your solar system will offer big benefits. For customers with battery storage, you can practice rate arbitrage. This is when you charge your battery with off-peak electricity in the morning and then use that stored energy during on-peak hours. This allows you to save money by leveraging when you buy electricity from the grid. With this practice, you can avoid paying the most expensive time-of-use rates. “In addition to providing backup power to your home when the power goes out, solar and battery storage can help reduce your dependence on grid electricity during Xcel Energy and Fort Collins Utilities higher-cost peak hours,” shared Anna Perry, Co-Owner and Director of Residential Sales. “This offers greater predictability and peace of mind regarding future energy costs.”
To reduce your energy bill, perform high energy tasks, like running your laundry through your washer and dryer, during off-peak hours, 9 p.m.-5 p.m. (the next day).
When Will I Get My New Smart Meter?
Most Xcel Energy customers have already seen the switch to a smart meter. To learn more, check out Xcel Energy’s website.
Can I Opt Out of Time of Use?
For those customers who do not want to be billed according to the time of use rate structure, Xcel does offer the opportunity to opt out of the program. To opt out and return to the standard rate, you’ll have to give Xcel a 30-day notice and call 800-895-4999.
For some customers, opting out will save you money. But for others, it’ll be cheaper to continue with time of use. This depends on what appliances you have and when you regularly run them, as well as you and your family’s normal schedule. If you contact Xcel, they can look at your specific energy usage over time and tell you whether opting out will save you money.
Time of Use Rates and Solar with Battery Backup
While change is never easy, time of use rates are part of the package with some utilities. Avoid paying a higher energy bill by switching to solar and battery backup and managing your energy usage throughout the day. Want to learn more about solar or battery backup? Our non-commissioned solar experts will assist you in determining whether solar and battery backup is the right fit for your home and help you navigate the time of rates structure so you can save money on your energy bill. Give us a call at 303-536-8920 or click the button below to get started.
