The Basics

There are really two reasons to take this step: first, to maximize your utility bill savings from your Step Two investments in switching to electricity; and second, to help reduce the costs for everyone from transitioning the electric grid to carbon-free energy sources. But how does that work?

You don’t need an engineering degree to understand the basic concepts. The key point to remember is that when it comes to electricity, “the law of supply and demand” is not just an economic principle, it’s a physical imperative. If we’re using more electricity than is being produced, or power sources are generating more electricity than we need, the whole grid can get thrown out of whack. In that case, really bad things happen. (I did promise I wouldn’t get too technical.)

That’s why a good portion of the tens of thousands of people keeping our electricity running are focused on making sure those levels of supply and demand stay in balance every minute of every hour, 8760 hours a year. The two main tools for maintaining that balance are pricing — by charging more for electricity at times when demand is high and supply is short, and vice versa — and direct control, by instructing generation resources to ramp up or down to meet demand or electricity consumers to moderate their energy use if it looks like there won’t be enough generation supply. (The not-so-nice version of that latter approach is a rolling brownout or blackout, when the flow of electricity gets deliberately interrupted in certain areas to avoid the whole grid going down.)

For a long time, this work has been mostly invisible to all of us regular folks. Yes, your utility and third party energy suppliers have dealt with prices that change by the hour and the minute, and big manufacturers might get paid to reduce or shut off production during electricity shortages. But with limited exceptions, until the last decade or so, our home electricity bills have had two components: a fixed charge for the connection to the grid, and a per kilowatt-hour charge reflecting how much electricity we use each month. You might pay more for being a high overall energy user through “tiered” pricing, but it’s been rare for residential customers to need to think about when they’re using energy during a given month or day.

This has changed in recent years, mainly due to the advent of all this “smart” technology — especially smart meters that can automatically measure your home electricity use every 5 or 10 or 15 minutes and send that data to your utility instead of having your meter read just once a month. Before electric companies had access to that information, the only way they could adjust your bills based on when you were using electricity was if you signed up to let them install control switches on your home appliances, so they could directly turn your air conditioning or hot water heating off times when the electricity supply was running low. Even that approach (which you might hear called “demand response” or “load control” if you’re spending too much time with us energy nerds) has become easier, with utilities using home Wifi networks to signal devices like smart thermostats instead of old-fashioned control switches.

These days, over a hundred million U.S. households have smart meters, with more being added every year. Many of those customers are now seeing rates where you pay a different amount for electricity depending on when you use it. (If you’ve heard the terms “time-of-day,” “time-varying,” or “time-of-use” rate, or “on-peak” and “off-peak” rates, you’ll have an idea what I mean.) Even customers with monthly meters can often find their utilities offering incentive payments if you let them control your HVAC, hot water heating, or EV charging. This means that it’s possible, even probable, that the carbon-free electricity you’ve signed up for can be cheaper if you use it at the right times. The more you use that cheaper electricity, the lower your bills will be, and the more likely it is that your Step Two efforts to switch away from fossil fuels will end up saving you money in the long run.

Remember, though, there’s a second element here that’s just as important. Carbon-free energy is increasingly supplied by wind and solar power that’s amazingly low-cost, but also “intermittent”; you don’t just flip a switch and produce as much electricity as you want whenever you want it. Instead, that generation is somewhat at the mercy of the elements. That means if there’s not enough renewable energy when we need it, we may have to rely on more carbon-intensive — and generally higher-priced — electricity resources like coal generation or natural gas “peaker” plants. Conversely, grid operators may actually need to tell renewable resources to “curtail,” or stop producing carbon-free electricity, if it’s coming when there’s not enough demand for it. Either way, as wind and solar become a bigger part of our energy mix, being able to shift our electricity use to better match when it’s generated by renewables can ensure we all get clean energy without incurring extra costs to fill in gaps with fossil fuel resources. This is one of those win-wins that’s good for you and for the adoption of clean energy across the grid.

There are two approaches to achieving the match between electricity demand and carbon-free supply: store the electricity for when we need it, or shift our electricity use to match when it’s generated. You can do both of those at home, just by charging your EV, heating your water, or running your HVAC at the right times. Of course, that can be easier said than done. It may not be so hard to remember to plug in your EV right before bed so it charges at night when demand is lower and electricity is often cheaper, or to set your dishwasher for a delayed start instead of running it right after dinner. But those daily tasks tend to multiply, and as energy expert Amory Lovins has observed, most people don’t want to spend lots of time thinking about and tinkering with their electricity use; they just want hot showers and cold beers. If you’re reading this, clean energy may also have a top spot on your list — but that doesn’t mean you want to spend lots of time actively managing your appliances and bills when you could be enjoying those showers and beers instead. That’s why this step focuses on how you get your technology and your energy company to do the work for you whenever possible.

 The When

You may start getting that feeling of “deja vu all over again” here: just as in the previous steps, this one is predominantly about making “climate smart” choices when you buy new things or get new opportunities from your energy provider. That means thinking about managing your electricity use at several of the same decision points I’ve highlighted before:

1. When you move.

2. When you buy an electric vehicle or replace fossil-fueled home appliances (furnace/boiler, AC unit, hot water heater, etc.).

3. When your utility or energy supplier offers you a way to save money by managing your electricity use.

Of course, just like in Step Two, this is something you can take a look at anytime energy is on your mind. Did your electric bill come in unexpectedly high in August? That’s a great time to look for special rates or programs to adjust your air conditioning, or to make sure you have the right charging schedule set for your EV. It may take a little extra time out of your day, but the point here is to “set it and forget it” so you can go on with life without thinking about energy for a while.

 The How

Whenever you’re thinking about how to use energy at the best times and prices, there are two questions you’ll want to ask. First, do you have the right technology in place? And second, are you signed up for the right electricity rates and/or programs to leverage that technology?

The technology piece may actually be the simplest to tackle. By now you’re probably getting to know the “big ticket” items for your energy consumption: home heating and cooling; hot water heating; and EV charging and a pool pump if relevant. There are viable options to manage the timing of electricity use for each of those with existing technology, some of which you may have heard of and some not. But here’s the list you’ll want to get familiar with:

• Smart thermostats

• Connected hot water heaters or hot water heater controls (built-in or add-on)

• Smart EV chargers

• Variable speed pool pumps (for at least some of you)

Each of these tools can help you (or a third party company if you let them) automatically control when you’re using electricity to aim for the times when it’s — say it with me here — cheap and clean.

It’s finding a good way to leverage these technologies that can be a bit more complicated, since there’s a wide-ranging mix of rates and programs related to managing the timing of your electricity use. In some places they’re non-existent; in some places they’re around but hard to find; in some places they’re becoming the default for all customers as deployment of smart meters and renewable energy take off. That’s why it’s a good idea, when you move to a new home, to survey the field. Does your electric utility or a local energy company offer any rates or programs where you can pay less if you use energy at certain times of day, or get an incentive payment for letting them occasionally manage when your appliances or EV uses electricity? You’re generally looking for a reference to time-of-use or time-of-day, real-time, smart, or peak rates, or demand response, load management, or peak time rebate programs. You might even see offers for “free nights and weekends.” (Yes, some energy companies are leveraging that old-school cellphone plan marketing.) This is definitely a fine time to seek outside help and call your utility’s customer service line to ask if they have any special rates for households that use less energy at “peak” times.

If these types of options exist where you live, you may actually already be enrolled on one as the default; in that case, skip ahead to the explanation of what to do with a time-based rate. If you get to choose whether or not to make the switch, you may be asking what that will mean for your monthly bills. If the offer is for some kind of rebate or payment for lowering your usage during “peak” times (i.e., when demand is high and energy is expensive), then there’s usually nowhere to go but down. For a rate that would charge you more for using electricity “on-peak,” you’ll want to find out if it applies just to a specific activity — most likely EV charging — or to your whole home. Shifting one specific use to off-peak times shouldn’t be too hard; more on that below. If you’re dealing with all of your home electricity use at once, there’s a little more to think about since not every piece of that will be as flexible. Some utilities do offer various forms of rate calculators or what’s called “shadow billing” that let you compare what your bills might look like under different rates, but keep in mind that those are often based on your historic usage and don’t account for what might happen if you do change when and how you’re using electricity. Overall, the best way to know if you can successfully shift your electricity use to save money is to go ahead and give it a try.

What does that look like? It mainly depends if you’re dealing with a program geared toward a specific technology or a generic time-based rate.

A technology-based program might include smart thermostats or smart EV charging , and occasionally a hot water heater or pool pump alternative. Fortunately, these options will tend to be pretty straightforward, with specific eligible technologies and structures for what you’ll pay when. In an ideal world, you’ll sign up and let the technology do the work, but you may need to establish a schedule for your device (usually through a smartphone app) to make sure it’s operating during lower-cost hours. Note that you’ll always have the option to move off your set schedule any time it’s not convenient and you’d rather just pay a little more for electricity that day or month.

A “whole-home” rate that applies to all your electricity use is mainly different in that you’ll be wrangling more devices. While your exact prices and rate structures may vary depending on where you live, the principle should always be the same: figure out when your “peak,” more expensive hours are, and set your devices to avoid those times as much as you can. Automate where possible, but know that your focus should be on heating, cooling, hot water heating, and EV charging since as we reviewed in Step Zero those will have the biggest impact on your monthly bills. If you can remember to run your dishwasher and clothes dryer outside those peak hours, even better. You might even invest in “smart plugs” if you have some energy-intensive devices that you want to program to use electricity only at certain times.

What if you’re not finding any of these options where you live? Go read the Politics and Prejudice page if you want to let the right people know that you’d like to see them, then move on to the New Purchase and New Offer sections below.

Once you’ve successfully gotten the right automation technology in place and enrolled in the relevant rates or programs, there are three main possible outcomes:

1. Your monthly bills go down without affecting your hot showers and cold beer. Congrats, you’re an energy automation winner!

2. Your bills seem to stay the same. That may not feel quite as glorious, but keep calm and automate on — at least currently, there may not be that big a price differential at those peak hours or they may just be a few times a year. You could be cutting your bills by a small amount and not even be able to tell given natural variation in weather or your living patterns. Even if you’re paying the same amount, you’re probably doing better in helping shift us all to greater proportions of carbon-free energy.

3. You run into higher bills than usual. Don’t give up! Take a deep breath and look at your monthly usage — you should be able to get the detailed hourly data from your utility. It may be that you have some inadvertent usage during those more expensive “on-peak” hours that you can fix going forward. If you’re in a colder climate, this may be a natural result of using some less efficient back-up “emergency” heat for the few coldest days of the year and more than offset by savings during the warmer months. Do some experimentation to see what you might change or just decide to live with because you can afford a few more dollars on your electric bill each month, more on that in the Energy Equity section.

Ultimately, this is going to be a bit of an adjustment process, both for you and for the evolving world of utility rates. Remember when you were learning to shop for a cellphone plan or figuring out what streaming services to subscribe to? This is no different. It takes a little time to get used to how things work, but they’re not actually that complicated. You don’t have to be a rocket scientist — or electrical engineer — to get “climate smart” in managing your energy use, especially if you can take advantage of automated technology.

With those basics in place, the main thing to know is how to dive into this process at the right times. Here’s the quick guide:

A New Home

A new home means a new energy set-up and also (potentially) a new energy company. In both cases, you should go back to those two key questions: do you have the energy management technology you need, and the right rates to leverage those technologies? See what you need on the technology side from the list above, and whether you can pair those devices with available rates or program to access lower-cost and/or cleaner electricity. If you don’t have the right equipment, decide if it’s time to go shopping. It may be a lot to tackle at once, but remember that “set it and forget it” will hopefully pay off once you get done with this stage, and you’ll be back to your hot showers and cold beer. At the very least, a smart thermostat and smart EV charger are relatively manageable investments you can make that are likely to put you in a great position to manage a large chunk of your energy use.

A New Purchase

You may not be ready to transform your whole home the second you get in the door. Maybe you’re waiting for the end of a car lease, or you know you’ll move in a couple years so it doesn’t make sense to replace a well-functioning natural gas furnace with a heat pump. That’s your call. But any time you’re buying one of these key items anyway, please please please make sure it’s a model that moves you in the right direction for Step Three. You may not stay in this home forever, but investing in technology for future residents to automatically manage their electricity use might be the most effective application of your climate budget, since those people could be stuck with your choice of HVAC or hot water heating equipment for years to come.

That advice applies even if you’re not finding any energy rates or programs that would actually let you utilize a smart EV charger or connected hot water heater to lower your bills. Those types of options aren’t everywhere yet, but they’re spreading, and I’ll refer you again to the Politics and Prejudice page if you want to support that effort. Whether or not you’re a climate optimist, the dollars and cents calculations show that renewable energy is becoming the lowest-cost option for electricity generation, which means that simple economics are moving us toward energy management technologies that can help customers save money by matching their electricity use with that cheap supply. It’s a good idea to make sure you’re ready to take advantage of that opportunity whenever the time comes.

A New Offer

Remember in Step Zero and Step Two when I told you that you might be able to find utility and energy company offers to help you save money while you’re reducing your climate footprint? The same goes here. There are plenty of programs and discounts out there for home energy management technologies like smart thermostats, and they’re usually in place because experts have done the work to figure out that they can benefit customers — you and everyone else who saves money when the electric grid runs efficiently.

This is a little different than the previous steps in that you’re not just keeping an eye out for discounts on products. You’ll also want to learn about any new rate options if you haven’t already, since your bill savings may come through those cheaper “off-peak” rates I mentioned instead of an up-front payment. Even though many customers already have access to those rates, there are new options coming all the time as electricity providers figure out how to leverage smart technologies to move toward lower-cost, cleaner energy. I’ll admit that a new utility rate might not be as exciting as a new electric car or home solar system, but if you want some climate innovation in your life, it just might do the trick.