What the Time of Use Battery Savings Calculator Measures
The Time of Use Battery Savings Calculator models a simple form of energy arbitrage. The battery charges when the marginal electricity price is lower and later supplies your load when the marginal price is higher. The economic question is not merely the difference between the two tariff numbers. The calculation must also account for the extra charging energy required because a battery does not return every kilowatt-hour that entered it.
U.S. Department of Energy guidance describes time-variable pricing as rates that change at set times, and notes that time-of-use schedules can include peak, off-peak and shoulder periods. That means your actual tariff can vary by utility, customer class, season, weekday, holiday and hour. Before using the Time of Use Battery Savings Calculator, copy the applicable energy rates and time windows from your own tariff rather than assuming the example values are universal.
Time of Use Battery Savings Calculator Formula
The Time of Use Battery Savings Calculator begins with the battery energy you can actually deliver during the expensive period. If a battery has 10 kWh nominal capacity and you model 90% usable depth of discharge, the delivered energy target is 9 kWh for one equivalent full cycle. A partial cycle can be represented with the cycles-per-day input rather than by changing the battery rating.
Delivered energy (kWh) = nominal battery capacity × usable fraction. Charging energy (kWh) = delivered energy ÷ round-trip efficiency. Avoided peak cost = delivered energy × peak rate. Off-peak charging cost = charging energy × off-peak rate. Gross saving per cycle = avoided peak cost − charging cost.
For example, with 9 kWh delivered and 85% round-trip efficiency, the battery must receive about 10.59 kWh from the grid. At an off-peak rate of 0.15 per kWh, that input costs about 1.59 currency units. If 9 kWh of peak purchases would otherwise cost 3.15 at a 0.35 rate, the gross energy saving is about 1.56 for that cycle.
Round-Trip Efficiency in a Time of Use Battery Savings Calculator
Round-trip efficiency is the ratio of useful energy output to useful energy input. NREL's 2024 residential battery storage assumptions use 85% as a representative round-trip efficiency for the modeled system. That is why the starting example in this Time of Use Battery Savings Calculator uses 85%, but it is not a recommendation for every battery. Use the specification or measured value for your system when available.
Efficiency matters because a 15-cent off-peak price is not really 15 cents per delivered kilowatt-hour when the battery loses energy. At 85% round-trip efficiency, 1 kWh delivered later requires about 1.176 kWh of charging energy. The effective off-peak energy cost per delivered kWh is therefore about 17.65 cents before adding battery wear, standby consumption or other costs.
Time of Use Battery Savings Calculator: 5 Smart Checks
Run these five checks before treating the Time of Use Battery Savings Calculator result as money you will actually save. They are designed to catch the biggest gaps between a clean energy-arbitrage equation and a real utility bill.
- Confirm the exact tariff windows and marginal energy rates. Use the rate that changes when one more kWh is bought in each period. Some bills include fixed charges, taxes, riders or tiered energy prices that do not move with every shifted kWh.
- Confirm there is enough time and power to charge and discharge. A 10 kWh energy target cannot be shifted through a 2 kW charger in a two-hour off-peak window. Check charger and inverter power as well as battery energy.
- Use a defensible round-trip efficiency. The Time of Use Battery Savings Calculator increases required charging energy when efficiency falls. Manufacturer data or measured AC-to-AC performance is preferable to a generic assumption.
- Respect usable capacity, cycling limits and degradation. A battery may reserve energy for backup, protect itself at low state of charge or lose usable capacity with age. Repeated cycling also has an economic cost even when the energy-arbitrage result is positive.
- Compare the model with actual bills and tariff rules. Demand charges, export credits, minimum bills, seasonal schedules, weekend rules and utility-controlled battery programs can materially change the outcome. Verify how your utility applies each component.
Time of Use Battery Savings Calculator Examples
Example 1: Wide price spread with a 10 kWh battery
Enter 10 kWh nominal capacity, 90% usable energy, 85% round-trip efficiency, 0.15 off-peak, 0.35 peak, one equivalent cycle per day and 365 active days. The Time of Use Battery Savings Calculator models 9 kWh delivered and about 10.59 kWh purchased while charging. Gross saving is about 1.56 per cycle and roughly 570 per year before battery ownership and degradation costs.
Example 2: Narrow price spread that fails the loss test
Keep the same battery assumptions but set the off-peak price to 0.20 and peak price to 0.22. Charging 10.59 kWh costs about 2.12 while avoiding 9 kWh of peak energy saves only 1.98. The Time of Use Battery Savings Calculator therefore shows a negative energy-arbitrage result even though the peak price is nominally higher than the off-peak price.
Example 3: Seasonal tariff with fewer active days
Suppose the useful rate spread exists only for 120 days of a summer season. Set active days to 120 instead of 365. The Time of Use Battery Savings Calculator keeps the same per-cycle saving but scales annual value to the limited season. This prevents a common mistake: applying a seasonal opportunity across an entire year.
Break-Even Rate for the Time of Use Battery Savings Calculator
The break-even peak energy rate is the off-peak rate divided by round-trip efficiency. If off-peak energy costs 0.15 per kWh and round-trip efficiency is 85%, the break-even peak rate is about 0.1765 per delivered kWh. A peak rate below that value cannot recover the charging-energy cost in this simplified model.
This break-even rule is useful because it converts battery losses into a minimum tariff requirement. The Time of Use Battery Savings Calculator displays that rate directly and also shows net value per delivered kWh. If your actual peak rate is only slightly above break-even, even modest battery wear, standby consumption or tariff changes may erase the apparent margin.
| Off-peak rate | Round-trip efficiency | Break-even peak rate | Interpretation |
|---|---|---|---|
| 0.10/kWh | 90% | 0.1111/kWh | Peak must exceed about 0.1111 for positive gross energy value. |
| 0.15/kWh | 85% | 0.1765/kWh | The default calculator example uses this efficiency relationship. |
| 0.20/kWh | 80% | 0.2500/kWh | Higher losses require a wider price spread. |
These rows illustrate only energy-rate arbitrage. They do not include battery capital cost, degradation, demand charges, taxes, export value or incentives.
What the Time of Use Battery Savings Calculator Does Not Include
The Time of Use Battery Savings Calculator intentionally focuses on energy charges. It does not model demand charges based on monthly maximum kW, fixed service charges, minimum bills, taxes, export compensation, solar self-consumption, backup-reserve value, utility incentives, financing, maintenance or replacement. Those items may matter more than the simple energy spread for some homes and businesses.
It also does not simulate an hourly load profile. A positive annual result assumes the modeled peak load actually exists when the battery discharges. If a home uses only 2 kWh during the expensive period, a 9 kWh usable battery cannot create value from the unused 7 kWh unless another eligible load or export pathway exists. For runtime and capacity planning, use the site's Battery Runtime Calculator and Battery Capacity Calculator.
Power limits are separate from energy capacity. Use the Charge Time Calculator to test whether the off-peak window is long enough and the Load Current Calculator when current capability matters.
Do not divide battery purchase price by this gross energy-arbitrage value and call the result a complete investment analysis unless you also account for degradation, replacement, financing, incentives, installation, maintenance, residual value and other bill components that apply to your project.
Time of Use Battery Savings Calculator Data and References
For tariff structure, the U.S. Department of Energy explains that time-variable pricing can change by set times and may include peak, off-peak and shoulder periods. DOE also recommends reviewing interval usage data and the specific utility rate options available to the customer. See DOE's time-variable pricing overview and utility rate evaluation guidance.
For a transparent battery-efficiency reference, NREL's 2024 Residential Battery Storage ATB defines round-trip efficiency as useful energy output divided by useful energy input and uses 85% as a representative modeling assumption. The Time of Use Battery Savings Calculator uses 85% only as an editable starting example; your battery specification, inverter architecture and operating conditions can differ.