Free Nights and Weekends Energy Plan, Is it a Good Deal?
As consumers, we are always on the lookout for the next bargain, so when the magic word ‘free’ is uttered in relation to a usually expensive product, such as electricity, we have to know more. At some point, you might have come across an energy provider advertising a ‘free nights and weekends electricity plan and you might have wandered – is this a scam?
Our website prides itself on always trying to provide you with factual, reliable information about all things electricity, so we set out to analyze the topic of a free electricity plan – and whether it’s really worth it.
The Free Hours
Free electricity plans might sound like a classic case of “sounds too good to be true”, so let us start by confirming that the “free power” slogan is not really a cheap trick. The electricity really is free during the hours advertised in the contract. We have practical examples. For instance, a few Texas energy companies offer free electricity from 8, 9 pm to around 6, 7 am. Now that’s what you call a truly free nights plan!
Why would retail electricity providers willingly decrease the amount they can charge their customers by offering such plans? The original idea behind the free electricity plans, sometimes also known as ‘Time of Use’ tariff, was to encourage customers to shift their energy usage from peak hours to non-peak hours.
What are the peak hours? They are the times of day when people most need and use electricity. Think of a late afternoon (approximately 4 – 7 pm) – that’s when everyone comes back from work or school and starts using electricity – to cook a meal, watch TV, play music or turn on an AC after.
Sudden spikes in energy demand put pressure on our electric grid and can result in blackouts and outages. Some electricity companies, therefore, decided to incentivize customers to voluntarily shift their electricity usage to “off-peak” times, by making the electricity cheaper – or free.
Still with us? Great. You might be thinking “Okay, that doesn’t sound so bad. I can save money each month AND reduce the possibility of a blackout just by doing my laundry at night, instead of an afternoon?” Yeah, but… A free energy plan is great in principle, but you have to be mindful of a few things.
Double-Check If the Time Alloted can be Utilized
If your free nights and weekends electricity plan offers free power between 10 PM and 7 AM, it might be very difficult for you to actually shift your energy usage. Your family won’t be too happy with the prospect of waiting to eat dinner until 11 PM and your neighbors might have a thing or two to say about your late-night hoovering and running the washing machine.
You need to be clear on the energy plan details and be realistic about what’s really possible so that you can use it in a way that helps you lower your electricity bill.
Ask The Provider For Details
If you are interested in a particular free nights or free weekends electricity plan, you should get in touch with the supplier’s customer service team before you sign up. You should ask them questions and get clarity on the following
- What times of day/week really come with a free price tag
- What’s the price per kilowatt-hour of electricity during the non-free times
- What does the average monthly bill look like
- Cancellation fees & penalties if you decide to exit your contract early
Other Hours will Come with a Much Higher Rate
The reason why we bring up the price for electricity during the non-free times of the day is what most providers don’t tell you. Very often, free nights and weekend plans have a much higher rate per kWh of electricity during the non-free times than the rate of a typical fixed-rate plan.
For example, Direct Energy, one of North America’s largest retail energy providers offers a Free Nights Twelve Hours plan with free electricity between 9 PM and 9 AM every day. However, the daily electricity charge outside of the designated time period is 15.8¢ per kWh, compared to the regular fixed-rate – 10.6¢ per kWh.
Read/Study the EFL
As the old saying goes, the devil is in the detail so if you are someone who tends to skip the small print, you can soon find yourself overpaying for electricity. One important thing stands when shopping for energy plans – always read the EFL. The document contains all essential information about your electricity plan, such as the rate structure, fees, and policies. It looks like this:
Review Your Usage
You can easily calculate an estimate of your next electric bill to decide whether the free nights and weekends plan will actually save you money.
- Grab your old electric bill to review your household average energy usage.
- Make a (realistic) assumption about what percentage of that usage can you shift to the free electricity hours
Your calculation is as follows:
- Percentage of monthly usage in non-free times x electric rate (amount 1)
- Entire monthly usage x electric delivery charges (amount 2)
- Amount 1 + Amount 2 + any additional charges that you see on the EFL
Estimate Your Electric Bill
We can now use the numbers and the formula from the above section to calculate your hypothetical electric bill.
Let’s say you signed up for Direct Energy’s Twelve Hour Power 12 with the below terms:
Energy Supply Charge:
- 15.8¢ per kWh – Daily beginning at 9:00 AM ending at 8:59 PM
- 0.0¢ per kWh – Designated Free Period (9:00 PM until 8:59 AM)
Electric Delivery Delivery Charges:
- $3.42 per month
- 3.578¢ per kWh
We will assume that the average monthly usage of your household is 1500 kWh and you can switch 30% of it to the designated free period times.
Your bill will be calculated like this:
- (1500 kWhs x 30%) x 0.0¢ = $0
- (1500 kWhs x 70%) x 15.8¢ = $165.9
- 1500 kWhs x 3.578¢ = $53.67
Final monthly electric bill estimation: $0 + $165.9 + $53.67 = $219.57
Choose the Plan That’s Right For You
Electricity plans are like shoes. One size does not fit all. Free nights and weekends plans aren’t “set it and forget it” types of electricity plans — you will have to monitor your usage regularly to ensure that you are really saving money. If you don’t have the time or energy to do that, a conventional fixed-rate plan might be better for you.
This Does Not Automatically Equate to Cost Savings
Marketing materials for free nights or free weekends electricity plans will tell you that 30 to 40% of energy is used at night and on weekends, tricking you into believing that by switching, you will save 30% on your total electric bill.
They make it sound so easy! However, let’s be realistic – you won’t be able to shift 100% of your usage to the designated time periods. If you turn the above statistic around, it says that 60 to 70% of energy is used during weekdays. With a very steep rate for the non-free electricity times, you might not see true cost savings from switching plans.
Compare the Rates to See If It’s Worth It
Still not sure if free weekends or free nights electricity is right for you? We recommend another place to start. You can compare electric rates and plans available in your area. Our website reviews all major U.S. providers to only feature reputable and reliable companies. There are also various free resources to help you estimate your energy usage, understand the charges on your bill, and step-by-step switching guides. Once you see all the options available to you, you will be in a better position to select the plan that’s just right for you.
Below you can find the answers to some of the questions you might have about free nights and weekends electricity plans:
What Does Free Nights and Weekends Mean?
Free Nights and Weekends plans are energy products offered by some retail electric providers (REP) to incentivize customers to switch their energy usage to the off-peak hours of the day. On this plan, your electricity will be free during the designated time period each day (for example between 9 PM and 9 AM or Friday evening to Sunday night). The rate you will pay for electricity used during the normal times (when electricity isn’t free) will often be higher than the fixed rate you would pay otherwise, which might result in fewer savings than originally estimated.
Are Free Nights and Weekends Electricity Plans Worth It?
Free Nights and Weekends electricity plans are an interesting energy product and if understood and used correctly, they can save your household a lot of money. However, there are a couple of things you should watch out for when signing up for free electricity. You should carefully confirm the times of day when the electricity comes free and be realistic about how much of your monthly usage can you shift to those times. The other consideration is the rate per kWh of electricity during the non-free times – it is often a lot higher than the average fixed electric rate. Do some simple calculations to find out if you’ll really save money because free electricity is great — except when it isn’t.
What Time of Day is Electricity the Cheapest?
The cost you pay for electricity during different times of day depends on the specifics of your energy plan. Fixed-rate plans have the same price per kilowatt-hour all day every day for the duration of your contract. On the other hand, free nights and weekends plans charge nothing for the energy used during the non-peak hours (late evening to early morning) and a high rate for the usage during all the other times. The reason is to incentivize customers to switch their usage away from peak hours – when everyone uses a lot of electricity (for example, mid to late afternoon).