If your business is on a time-of-use (TOU) tariff, the clock on the wall now decides how much each kilowatt-hour costs you. Run a compressor at 5 pm and you pay the peak rate. Run the same compressor at 11 am and the price drops. Solar plugs straight into this dynamic, because the hours when panels produce the most energy overlap heavily with the hours your retailer charges the most. That overlap is where the real savings live, and it is also where most businesses leave money on the table.
Below: how a TOU tariff is built, why solar offsets the expensive hours first, why self-consumption beats export by a wide margin, and where demand charges quietly undercut the maths. There is a worked example for a 75 kW system so you can see the dollars rather than the theory.
What a TOU tariff is actually made of
A TOU tariff splits the day into pricing windows. The exact times shift between networks and retailers, but the three standard bands look like this:
| Window | Typical times (weekday) | Example rate (c/kWh) | What drives it |
|---|---|---|---|
| Peak | 3 pm–9 pm | 40–55 | Highest grid demand, evening crunch |
| Shoulder | 7 am–3 pm | 20–30 | Steady daytime business load |
| Off-peak | 9 pm–7 am | 12–18 | Low overnight demand |
The peak window is priced high for a reason. Late afternoon into early evening is when household and commercial demand collide, the grid runs hardest, and wholesale prices spike. Shoulder periods cover the working day, when offices, factories, and shops are open but the system is not straining. Off-peak is the quiet overnight stretch, which is why some businesses already shift batch processes or EV charging into those hours. The gap between peak and off-peak can be three or four times the rate, and that spread is the whole reason TOU exists.
Why solar attacks the expensive hours first
Solar generation follows a bell curve. It starts after sunrise, climbs through the morning, peaks around midday, and tails off in the late afternoon. Lay that curve over a TOU tariff and something useful happens: your panels are producing right through the shoulder window and well into the start of the peak window. Every kilowatt-hour the array supplies in those hours is a kilowatt-hour you do not buy at the shoulder or peak rate.
This is why solar savings on a TOU tariff are worth more per kilowatt-hour than the same solar on a flat tariff. A flat-rate site saves one average rate on every offset unit. A TOU site saves the shoulder rate during the day and bites into the early peak before the sun drops. The catch is the evening peak after 6 pm, when the array has gone quiet but the price is still high. Without storage, those hours stay on the grid at full peak rates, which is exactly the argument for a battery covered later.
Self-consumption versus export: not even close
Every unit your solar produces goes one of two ways. It either powers the building right then (self-consumption) or it flows back to the grid (export). These two outcomes are worth wildly different amounts, and getting the balance right is the single biggest lever on payback.
When you self-consume a kilowatt-hour, you avoid the full retail price of buying it: the energy rate, the network charge, and the environmental levies stacked on top. On a TOU tariff during the day, that avoided cost is often 25–35 c/kWh. When you export instead, the feed-in tariff for commercial solar typically sits around 4–8 c/kWh. So a unit you use on site can be worth four to seven times what the same unit earns sent back to the grid.
| Where the kWh goes | What it is worth | Example value (c/kWh) |
|---|---|---|
| Self-consumed (daytime) | Avoided retail + network + levies | 28 |
| Exported | Feed-in tariff only | 6 |
The practical takeaway: a commercial solar system earns its keep by displacing power you would otherwise buy, not by selling surplus. Size and behaviour should both push toward keeping as much generation on site as possible.
Worked example: a 75 kW system on a TOU tariff
Take a light-manufacturing site running roughly 8 am to 5 pm, five days a week, with a 75 kW rooftop system. In a sunny region that array produces around 110,000 kWh a year. Because the business operates during daylight, say 80 % of that generation is self-consumed and 20 % is exported.
- Self-consumed: 88,000 kWh × 28 c = $24,640 avoided each year.
- Exported: 22,000 kWh × 6 c = $1,320 earned each year.
- Combined first-year benefit: roughly $25,960.
Now look at what self-consumption does to that figure. If the site instead ran a poor daytime match and exported half its generation, the export half earns 55,000 kWh × 6 c = $3,300, while the self-consumed half saves 55,000 kWh × 28 c = $15,400, for a combined $18,700. Same panels, same sunshine, but about $7,000 a year lost simply because the load did not line up with the generation. Stretch that gap over a 10-year horizon and it is the difference between a strong investment and a mediocre one. Run your own numbers in the commercial solar payback calculator.
The demand charge catch
Larger commercial sites usually carry a demand charge on top of energy charges. This bills your single highest power draw in the month, measured in kW or kVA, and it can be a big slice of the total bill. Here is the part people miss: solar cuts your energy charges reliably, but it only cuts demand charges when your peak draw happens to fall during solar hours.
If your worst spike lands at 7 pm with the array asleep, or on an overcast afternoon when output collapses, the demand charge barely moves. Solar alone is not a demand-charge tool. To trim that line you need either active load management, shifting big draws off the peak moment, or a battery that discharges during the demand window. That is why a payback model that only counts energy savings can overstate the result on a demand-heavy site.
How to squeeze the most out of TOU plus solar
- Shift flexible loads into daylight. Move pumping, batch runs, pre-cooling, and EV charging into the midday solar window so they run on free generation instead of grid power at the shoulder rate.
- Size to your daytime baseload, not your peak. A system matched to the load that is always running during the day maximises self-consumption. Oversizing just exports more at the low feed-in rate.
- Map your half-hourly profile before quoting. Your interval data shows exactly when you draw power. Designing the system against that profile beats a rule-of-thumb kW figure every time.
- Consider a battery for the evening peak. If a chunk of your consumption sits in the post-sunset peak window, storing midday surplus to discharge after 6 pm converts 6 c export into 50 c of avoided peak, and can shave demand charges too.
- Recheck your tariff. Once solar reshapes your load, the TOU plan that suited you before may no longer be the cheapest. It is worth re-comparing tariffs after install.
The bottom line
A TOU tariff rewards businesses that can move their consumption to match cheap, sunny hours, and solar is the most direct way to do that. The system pays best when generation lands on your own load rather than the grid, so self-consumption and load timing matter as much as panel count. Model the daytime match first. Then check whether your demand charge and evening profile justify a battery before you lock in a size. Estimate your payback with a TOU-aware model here.