Each hour the grid sells electricity at a different price: cheap overnight (off-peak), pricier during the day (shoulder), most expensive in the early evening (peak). A house with no battery simply pays that hour's live rate for every kWh it uses.
The battery strategy charges during the day's cheapest hours (up to its capacity, limited by its charge power and round-trip efficiency loss), then during the day's most expensive hours it discharges to cover as much of the household's load as its remaining stored energy and discharge power allow — buying only the leftover kWh from the grid at that hour's price.
- Capacity — how many kWh the battery can bank; a bigger battery covers more of the peak window before it runs empty.
- Charge/discharge power — the kW rate limit; a small battery power rating can't fully charge in one cheap hour or fully cover one peak hour.
- Round-trip efficiency — every kWh drawn from the grid to charge yields slightly less than a kWh of usable stored energy; the shortfall is still paid for at the (cheap) charging-hour rate.
The total energy consumed over the day is identical in both scenarios — the battery changes only when the grid is paid, not how much is used.