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Battery Arbitrage / TOU Savings Calculator

Enter your battery size, TOU rates, and installed cost — get daily arbitrage profit, annual revenue, 10-year NPV, and optimal charge/discharge windows.

Battery system
kWh
%
$
Your TOU rates
¢/kWh
¢/kWh
¢/kWh
kW
Battery arbitrage economics
$3.80/cycle — $1,331/yr arbitrage revenue
Usable capacity per cycle10.8 kWh (80% DoD)
Charge cost per cycle$0.86
Discharge revenue per cycle$4.67
Annual arbitrage revenue$1,331/yr
Est. VPP program bonus$74/yr
Total annual benefit$1,405/yr
Simple payback period8.2 yrs
10-year net savings (NPV 5%)-652
Effective cost per kWh delivered$0.338/kWh
Optimal charge windowMidnight–6am (super off-peak)
Optimal discharge windowPeak hours (typically 4pm–9pm)
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Extended AnalysisDaily TOU schedule, seasonal revenue & VPP income
kWh
kW
4pm-9pm weekdays | Peak: 47¢ | Off-peak: 12¢
%
TOU spread: 35¢/kWh. Charge 12.2 kWh off-peak, discharge 10.9 kWh at peak. Daily profit: $4.
24-hour charge/discharge schedule
Midnight6amNoon6pm
Charge: 12am-6am (12.2 kWh @ 12¢)Discharge: 4pm-9pm (11.2 kWh @ 47¢)Idle
Daily arbitrage profit: $4 = 11.2 kWh x 47¢ discharge – 12.2 kWh x 12¢ charge

How to Use This Calculator

Enter your battery specs and cost

Start with your battery capacity in kWh and its installed cost. Most home batteries are 10-13.5 kWh. Round-trip efficiency of 90% is accurate for most lithium-ion systems (Powerwall, Enphase, Franklin). Select cycles per day — if your utility has both a morning and evening peak period, 2 cycles/day doubles your arbitrage opportunity.

Enter your TOU rate schedule

Find your off-peak and peak rates on your utility's time-of-use rate schedule — search for "[your utility name] TOU rate schedule PDF." Enter rates in cents per kWh. If your utility offers a super off-peak period (like PG&E's midnight–9am spring/fall rate), enter that as the cheapest charge rate. The wider the spread between off-peak and peak, the more you earn per cycle.

Read the results

The results show daily profit per arbitrage cycle, annual revenue, VPP program bonus estimate, 10-year NPV, payback period, and effective cost per kWh delivered. The VPP bonus ($50-100/yr/kWh) reflects programs where utilities pay battery owners to discharge during grid stress events — available through programs like Tesla Energy Plan, Sunrun Shift, and Swell Energy.

The Formula

Usable kWh = Battery kWh × 0.80 (80% DoD) Charge Cost/Cycle = Usable kWh × Charge Rate ($/kWh) Discharge Revenue/Cycle = Usable kWh × RTE × Peak Rate ($/kWh) Profit/Cycle = Discharge Revenue − Charge Cost Annual Cycles = Cycles/Day × 350 days Annual Revenue = Profit/Cycle × Annual Cycles VPP Bonus = Battery kWh × $5.50/kWh/yr (est.) Total Annual Benefit = Annual Revenue + VPP Bonus Payback = Battery Cost ÷ Total Annual Benefit 10-yr NPV = Σ(Annual Benefit ÷ 1.05^yr) − Battery Cost [yr 1-10] Effective $/kWh = Battery Cost ÷ (Usable kWh × RTE × Annual Cycles × 10 yrs)

The 80% depth of discharge extends battery calendar life — most manufacturers recommend not going below 20% for daily cycling. The 350 active days accounts for roughly 15 days per year where TOU arbitrage isn't worthwhile (flat rates, grid outages, maintenance). The VPP bonus is an estimate; actual program values range from $50 to over $300/kWh/year in high-demand markets.

Example

Carlos — CA NEM 3.0 with Powerwall 3

Carlos has a 13.5 kWh Powerwall 3 ($11,500 installed) and a 7 kW solar system in California under NEM 3.0. His PG&E E-ELEC tariff has off-peak at 12¢/kWh and peak at 48¢/kWh.

BatteryPowerwall 3, 13.5 kWh
Off-peak rate12¢/kWh (charges overnight)
Peak rate48¢/kWh (4pm–9pm)
Super off-peak8¢/kWh (spring, midnight–9am)
System cost$11,500

Result

Usable per cycle10.8 kWh
Profit per cycle$4.30 (charge $0.86, discharge $5.16)
Annual arbitrage~$1,505/yr
VPP bonus (est.)~$74/yr
Total annual benefit~$1,579/yr
Payback period~7.3 years
10-year NPV+$1,698

Under NEM 3.0, the 4x rate spread between super off-peak (8¢) and peak (48¢) creates one of the strongest battery arbitrage cases in the US. Carlos's Powerwall pays for itself in about 7 years and delivers over $1,600 in net savings over 10 years — before accounting for backup power value during outages, which in California averages 2-3 hours per customer per year.

FAQ

Battery arbitrage is worthwhile when the spread between off-peak and peak rates exceeds roughly 15¢/kWh. On California NEM 3.0 (spreads of 30-45¢), Texas (spreads of 12-20¢), and New York ConEd (spreads of 20-30¢), batteries pay back in 5-12 years. On flat-rate utilities with no TOU option — arbitrage generates near-zero savings. Check if your utility offers a TOU plan first; if not, the primary battery value is backup power, not arbitrage.
A Virtual Power Plant aggregates home batteries across thousands of customers and dispatches them as a collective resource during grid stress events. Utilities or grid operators pay battery owners for this service — typically $50-300/kWh/year depending on program. Examples include Tesla Energy Plan (CA, TX), Sunrun Shift (CA), Green Mountain Power (VT), and Swell Energy programs. Enrollment is usually free and opt-out is easy. This is additional income on top of TOU arbitrage, not instead of it.
Daily cycling does add wear to lithium-ion batteries, but modern home batteries are designed for this. The Tesla Powerwall 3 is warranted for unlimited cycles during its 10-year warranty. The Enphase IQ Battery 5P warrants 4,000 cycles. Operating at 80% DoD (as this calculator does) is recommended — going to 100% charge or 0% discharge accelerates degradation and voids some warranties. At 1 cycle/day within DoD limits, most batteries maintain 70%+ capacity after 10 years.
Search "[your utility name] time-of-use rate schedule" and look for the PDF rate schedule on your utility's website. You want the rates in ¢/kWh for each period. Alternatively, check your utility bill — many now show your rate plan name. Common plans: PG&E E-ELEC (CA), SCE TOU-D-PRIME (CA), Xcel TOU (CO), APS Saver Choice (AZ), Con Edison Smart Usage Rewards (NY). Many utilities have a residential storage rate specifically optimized for battery customers — ask your utility if one exists.
Yes — battery arbitrage works independently of solar. You charge from the grid at off-peak rates and discharge during peak periods, earning the rate spread. This is actually the basis of utility-scale battery projects. For residential customers, the math requires a meaningful TOU rate spread (15¢+ difference) to overcome the battery cost. Without solar, there's no "free" charging — you pay the off-peak rate every cycle, so the arbitrage profit is only the spread times the round-trip efficiency.

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