Quick answer
Energy Arbitrage is storing electricity when it is cheap and using or selling it when it is expensive, earning the price difference minus the energy lost in storage.
For a home battery that usually means filling up from solar or off-peak grid power and discharging during a time-of-use rate's peak hours. For grid batteries it means buying low and selling high in wholesale markets.
Quick facts
The key facts about energy arbitrage, with sources:
- Also called
- Load shifting, TOU arbitrage, energy time shift 8
- Needs
- A price gap between hours, and a battery to move energy across it
- Profit per kWh
- High price × round-trip efficiency − low price
- Grid-scale use
- Primary use for 10,487 MW of US battery capacity, the most reported 6
- Example peak gap (Duke Energy Carolinas SC, R-STOU)
- 20.9021¢ on-peak vs 9.3782¢ super off-peak per kWh 1
- Not the same as
- Peak shaving, which targets demand charges in kW
Key takeaways
- Energy arbitrage means filling a battery when power is cheap and using it when power is dear.
- It only pays when your rate charges different prices at different hours.
- Every cycle loses some energy, so the price gap must beat those losses.
- Storing midday solar you would have exported for a low credit is often the best case.
- Your utility’s rules can limit grid charging, so ask before you turn it on.
What energy arbitrage means
“Arbitrage” is a trading word. It means buying something where it is cheap and selling it where it is dear. With electricity, the “where” is a time of day.
NREL describes it as charging a battery when energy prices are low and discharging during more expensive peak hours 7. At home, you do not sell the power. You use it, so you avoid buying grid power at the high price.
The thing that makes it possible is a time-of-use rate. That is a rate plan with different prices for different hours, usually highest in the late afternoon and evening.
Sources: [7]
One arbitrage cycle
- Cheap hours (overnight or midday solar) → battery charges
- Battery holds energy → a little is lost as heat
- Peak hours → battery powers the home → grid imports drop
- Bill → fewer kWh bought at the peak price
How arbitrage works
Sandia's storage handbook lists arbitrage among the core uses of storage. It notes that behind-the-meter savings come from time-of-use energy charges, demand charge reduction and net metering 8.
The arithmetic is short. Every kWh you discharge is worth the peak price. Every kWh you put in costs the off-peak price, or the export credit you gave up if it came from solar. Round-trip efficiency means you must put in a little more than you get out.
A battery’s software does the timing. You set a schedule or a mode, and it charges and discharges on its own. Most systems also let you keep a reserve for outages.
Types of arbitrage
| Type | Charges from | Earns or saves |
|---|---|---|
| Solar shifting | Midday solar surplus | Retail peak price instead of a low export credit |
| Grid time-of-use arbitrage | Off-peak grid power | The gap between off-peak and on-peak prices |
| Wholesale arbitrage | Market power at low-price hours | Market price at high-price hours (grid-scale or aggregated) |
Worked example on Duke Energy Carolinas Schedule R-STOU (South Carolina)
An example using Duke Energy Carolinas' SC time-of-use energy charges effective 1 August 2026 (Docket No. 2026-131-E) and a battery with 90% AC round-trip efficiency. Rates exclude riders and taxes. It compares one weekday cycle of 10 kWh in.
| Source of the stored energy | Cost of 10 kWh in | Value of 9 kWh out at on-peak (6–9 p.m.) | Gain per cycle |
|---|---|---|---|
| Grid, super off-peak (midnight–6 a.m., March–November) | 10 × $0.093782 = $0.94 1 | 9 × $0.209021 = $1.88 1 5 | $0.94 |
| Grid, off-peak | 10 × $0.128191 = $1.28 1 | $1.88 | $0.60 |
| Midday solar surplus that would have been exported | 10 × $0.0419 export credit forgone = $0.42 2 | $1.88 | $1.46 |
Three hours of on-peak means the battery must deliver 9 kWh at 3 kW, within the 3.84 kVA continuous rating of one IQ Battery 5P 5. The example ignores battery price and wear, which HyreSolar does not publish without dated quotes.
Rider RSC nets energy within each time-of-use period before crediting any excess, and utilities set their own rules on charging storage from the grid, so ask your installer which rows your tariff allows.
Second example: the same cycle on Dominion Energy South Carolina Rate 5
Dominion Energy South Carolina’s Rate 5 time-of-use schedule prices on-peak energy at 29.907¢ and super off-peak at 9.623¢ per kWh. On-peak runs 4–8 p.m. in summer (May–September) 3. Same battery, 90% round trip.
| Step | Math | Result |
|---|---|---|
| Cost of 10 kWh in at super off-peak | 10 × $0.09623 | $0.96 |
| Value of 9 kWh out at on-peak | 9 × $0.29907 | $2.69 |
| Gain per cycle, grid-charged | $2.69 − $0.96 | $1.73 |
This row is for illustration only. Dominion’s Solar Choice rider counts storage only if it charges solely from onsite renewables 4, so a solar customer on that rider should not grid-charge without checking. Charging from solar instead changes the cost of the kWh in.
Where you set and see arbitrage
- In the battery app, as a mode such as “time-of-use,” “cost savings” or “self-consumption.”
- On your rate schedule, which lists the hours and prices.
- On your bill, as fewer kWh in the on-peak line.
- On a battery quote, where savings should be shown by rate period, not as one lump figure.
Benefits and limitations
Benefits
- Cuts the most expensive kWh on your bill.
- Turns low-value solar exports into higher-value home use.
- Runs on its own once set.
- Can work alongside backup if you keep a reserve.
Limitations
- Needs a time-of-use rate or low export credit to pay.
- Loses some energy every cycle.
- Adds cycles that count against the battery warranty.
- Energy used at the peak is not there for an outage.
When arbitrage pays, and when it does not
- It pays where on-peak prices are well above off-peak prices or export credits, as in the examples above.
- It barely pays on a flat rate, where every hour costs the same and only round-trip losses are left.
- It competes with backup. Energy used at 7 p.m. is not there for a 9 p.m. outage. Most owners keep a backup reserve and arbitrage the rest.
- It wears the battery. One cycle a day adds up to 365 a year against a warranty that may cap cycles or total energy.
Cost drivers and battery life
The yearly gain is the gain per cycle times the number of useful cycles. Weekday-only peaks, seasons with no super off-peak, and cloudy days all cut the count. On Duke’s R-STOU, for example, the super off-peak window runs only March to November 1.
Against that gain sits the battery’s price and its life. Life is set by the warranty, which usually limits years and sometimes cycles or total energy delivered. Read those limits on the data sheet and warranty before you decide. We do not print battery prices; see home battery storage for what drives them.
Rule of thumb: divide the battery’s cost by its warranted years. If one year of arbitrage gain is far below that, arbitrage alone will not pay for the battery. Backup value may still justify it.
How to set up arbitrage at home
- Check whether your utility offers a time-of-use rate, and its hours and prices.
- Ask whether your solar rider allows grid charging of the battery.
- Have a licensed installer size the battery to cover the peak window. Our battery sizing tool helps.
- Switch to the time-of-use rate if it suits your use, after comparing bills.
- Set the battery mode and a backup reserve in the app.
- Check the next few bills to confirm on-peak kWh fell.
Keeping arbitrage working
- Update the battery schedule when your utility changes rate hours. Rate schedules carry effective dates.
- Recheck the seasonal windows twice a year.
- Watch the app for falling usable capacity, a sign of ageing.
- Keep firmware current so the scheduler follows the right clock.
Warning signs
- A quote shows big arbitrage savings on a flat rate.
- Savings assume one full cycle every day of the year.
- No one checked whether your rider allows grid charging.
- The backup reserve is set to zero by default. You may have no power in an outage.
- A battery fault or error code in the app. Call your installer; do not open the unit.
Rules that affect arbitrage
There is no federal rule on home arbitrage. Your utility’s rate schedule and solar rider set the terms. For example, Dominion Energy South Carolina’s Solar Choice rider (PSC Order No. 2026-374) counts storage only if it charges solely from onsite renewables 4.
In Virginia, the version of Va. Code §56-594 in force today allows storage with net metering; a new version takes effect on 1 January 2027 with the same core limits 9. Check your utility’s tariff for storage terms.
For wholesale arbitrage, FERC Order No. 2222 (17 September 2020) lets aggregations of small resources, including home batteries, take part in regional markets. Programs depend on your region 10.
Arbitrage vs related battery strategies
| Strategy | What it targets | Rate it needs |
|---|---|---|
| Energy arbitrage | Price difference per kWh between hours | Time-of-use or wholesale prices |
| Peak shaving | Highest kW drawn in a billing period | A demand charge |
| Self-consumption | Gap between export credit and retail price | Low export credit |
| Backup | Keeping power on in outages | Any |
Common misconceptions
- Myth Any battery saves money through arbitrage.
- Reality Only with a price gap between hours or a low export credit.
- Myth A battery gives back all it stores.
- Reality Some energy is lost each cycle; the example assumes 90%.
- Myth I can always charge my battery from the grid.
- Reality Some solar riders limit that 4.
- Myth Arbitrage and peak shaving are the same.
- Reality Arbitrage targets kWh prices; peak shaving targets kW demand charges.
In South Carolina, Georgia and Virginia
Arbitrage value is set by your utility's rate schedule, not by the state.
In South Carolina, Duke Energy Carolinas’ R-STOU (effective 1 August 2026) and Dominion Energy South Carolina’s Rate 5 both publish separate on-peak and super off-peak prices, retrieved 5 October 2026 1 3.
Other utilities' windows and export credits are set out on the state net metering page.
In Georgia we have not verified current time-of-use schedules, and for Virginia we have not loaded utility time-of-use schedules; check your own utility before counting on a price gap.
Is arbitrage worth it for you?
It is worth a look if you are on, or can switch to, a time-of-use rate with a wide gap. It is also worth a look if your export credit is far below your retail rate.
Quick test: take the on-peak price times 0.9, then subtract the price of the energy you would store. If the result is only a few cents, arbitrage is a side benefit, not a reason to buy a battery.
Next step: read time-of-use rates and solar, then run your numbers in the savings calculator.
Questions about energy arbitrage
Is energy arbitrage the same as load shifting?
They describe the same action from two sides. Load shifting moves when energy is drawn from the grid. Arbitrage is the money made from doing it across a price gap. You can also shift loads without a battery, for example by running the dishwasher at night on a time-of-use rate.
Can a home battery charge from the grid to do arbitrage?
Technically most can. Whether you should depends on your utility. Some export-credit riders only treat storage as part of the solar system if it charges from onsite solar. Dominion Energy South Carolina’s Solar Choice rider is one. Ask before enabling grid charging.
How much can a home battery earn from arbitrage?
Per cycle, it is the peak price times the kWh out, minus the cost of the kWh in. On the Duke Energy Carolinas SC R-STOU schedule that is about $0.94 for a 10 kWh charge from super off-peak, before battery cost and wear. Multiply by the number of useful cycles in a year.
Does energy arbitrage work on a flat electricity rate?
Not from the grid. With one price all day, you only lose the round-trip losses. Storing solar instead of exporting it can still pay where the export credit is below the retail rate. That is self-consumption more than arbitrage, but the math is the same.
Does arbitrage shorten battery life?
It adds cycles, and cycles are one thing that ages a battery. Many warranties limit years and also cycles or total energy delivered. One cycle per weekday is about 260 a year. Check your battery’s warranty terms before running it hard every day.
What round-trip efficiency do I need for arbitrage to work?
The higher the better, but the price gap matters more. A rough test: the peak price times the efficiency must exceed the off-peak price. At 90% and Duke’s R-STOU prices, that test passes easily. On a narrow gap, losses eat most of the gain.
Can I do arbitrage and keep backup power?
Yes, by setting a reserve. Most battery apps let you hold back a share of capacity for outages and cycle the rest. A larger reserve means less arbitrage. Raise it before storms, when outages are more likely.
Can my battery sell power to the grid at peak prices?
At home, usually not at peak retail prices. Exports are paid under your export tariff, not at the retail peak. Some regions run programs that pay aggregated home batteries for grid services. FERC Order No. 2222 opened wholesale markets to such groups, but programs vary by region.
Sources
- Duke Energy Carolinas (SC), Schedule R-STOU (effective 1 August 2026, Docket No. 2026-131-E), retrieved .
- Duke Energy Carolinas (SC), Rider RSC Residential Solar Choice (effective 1 January 2026), retrieved .
- Dominion Energy South Carolina, Rate 5 Time-of-Use Residential, retrieved .
- Dominion Energy South Carolina, Residential Solar Choice rider (PSC Order No. 2026-374), retrieved .
- Enphase Energy, IQ Battery 5P data sheet (DSH-00010-11.0-EN-2025-05-06), retrieved .
- US EIA, Today in Energy: Utilities report batteries are most commonly used for arbitrage and grid stability (25 June 2024), retrieved .
- NREL, Grid-Scale Battery Storage: Frequently Asked Questions (NREL/TP-6A20-74426, 2019), retrieved .
- Sandia National Laboratories, DOE/EPRI Energy Storage Handbook, Chapter 15: Energy Storage Management Systems, retrieved .
- Code of Virginia §56-594 (versions effective until and from 1 January 2027), retrieved .
- FERC, Order No. 2222 fact sheet: A New Day for Distributed Energy Resources (17 Sep 2020, Docket RM18-9-000), retrieved .
Expert review
Written by the HyreSolar Research team. Not yet reviewed by an outside expert. We say so rather than imply a review that has not happened; see our editorial policy.
How the numbers were checked: Tariff figures from Duke Energy Carolinas SC Schedule R-STOU and Rider RSC, and Dominion Energy South Carolina Rate 5 and Solar Choice rider, as held in sc-local/facts.js (retrieved 5 October 2026).
Efficiency and power from the Enphase data sheet; grid usage from EIA; definitions from NREL and Sandia; Virginia storage rule from the VERIFIED Virginia fact pack and LIS.
The examples multiply published numbers only.
Suggest a correction. We fix errors and say what changed.