I’ve always heard this from people but I never belived it. It seems like a myth to me. Thier explanation is that less people are using power from the grid so its cheaper. I always thought the power companies always charged a flat rate per kilo watt hour. Which is it?? Thanks!
It depends on your electric utility.
Most offer "time of use" (TOU) rates for commercial/industrial customers, but some also offer it to residential customers.
Historically the cost to electricity is cheaper during the night because of the laws of supply and demand. During the day the loads are higher and extra generators are brought "on-line" to meet the demand. In the middle of the night loads are lower and they need to throttle back the generators.
Generating stations that use steam turbines do not like to ramp the loads up and down. That causes extra wear and tear on the equipment. In the case of nuclear plants, they’re designed to run "flat-out" until the next refueling outage.
To avoid reducing load, generating stations are willing to sell their "off-peak" energy for little more than the cost of fuel.
To encourage customers to shift their usage patterns to use "off-peak" energy, these TOU rates provide substantial discounts for usage during nights (and in some cases weekends).
The next extension of this is "real time pricing" were the cost of electricity is dynamically changing every hour throughout the day. This requires a more sophisticated electric meter that records your usage for each hour of the month. Computer programs apply the hourly costs of electricity to your usage and generate the bills. Depending on your usage patterns, these "market based" rates can save a substantial amount of money (20+%)compared to traditional flat rates.
Call your local electric company and ask them about time-of-use or real-time-pricing rates that might be available.