diff --git a/esphome/components/total_daily_energy/total_daily_energy.cpp b/esphome/components/total_daily_energy/total_daily_energy.cpp
index e7a45a5edf..161c712cc1 100644
--- a/esphome/components/total_daily_energy/total_daily_energy.cpp
+++ b/esphome/components/total_daily_energy/total_daily_energy.cpp
@@ -1,10 +1,21 @@
 #include "total_daily_energy.h"
+#include "esphome/core/application.h"
 #include "esphome/core/log.h"
 
-namespace esphome {
-namespace total_daily_energy {
+namespace esphome::total_daily_energy {
 
 static const char *const TAG = "total_daily_energy";
+static constexpr uint32_t TIMEOUT_ID_MIDNIGHT = 1;
+static constexpr uint8_t SECONDS_PER_MINUTE = 60;
+static constexpr uint8_t MINUTES_PER_HOUR = 60;
+static constexpr uint8_t HOURS_PER_DAY = 24;
+static constexpr uint32_t SECONDS_PER_HOUR = SECONDS_PER_MINUTE * MINUTES_PER_HOUR;
+static constexpr uint16_t MILLIS_PER_SECOND = 1000;
+// Wake up 90 minutes before midnight to recalculate, ensuring DST transitions
+// (which shift wall clock by 1 hour but don't change millis()) don't cause
+// the midnight reset to fire late. DST transitions don't trigger the time sync
+// callback since they change local time interpretation, not the epoch.
+static constexpr uint32_t PRE_MIDNIGHT_SECONDS = 90 * SECONDS_PER_MINUTE;
 
 void TotalDailyEnergy::setup() {
   float initial_value = 0;
@@ -15,28 +26,55 @@ void TotalDailyEnergy::setup() {
   }
   this->publish_state_and_save(initial_value);
 
-  this->last_update_ = millis();
+  this->last_update_ = App.get_loop_component_start_time();
 
   this->parent_->add_on_state_callback([this](float state) { this->process_new_state_(state); });
+
+  // Schedule initial midnight reset if time is already valid, otherwise
+  // the time sync callback will handle it once time becomes available.
+  this->schedule_midnight_reset_();
+  // Re-schedule on every NTP sync in case the clock jumped across midnight.
+  this->time_->add_on_time_sync_callback([this]() { this->schedule_midnight_reset_(); });
 }
 
 void TotalDailyEnergy::dump_config() { LOG_SENSOR("", "Total Daily Energy", this); }
 
-void TotalDailyEnergy::loop() {
+void TotalDailyEnergy::schedule_midnight_reset_() {
   auto t = this->time_->now();
   if (!t.is_valid())
     return;
 
-  if (this->last_day_of_year_ == 0) {
+  // Check if the day changed (time sync moved us past midnight, or first call)
+  if (this->last_day_of_year_ != t.day_of_year) {
+    if (this->last_day_of_year_ != 0) {
+      // Day actually changed — reset energy
+      this->total_energy_ = 0;
+      this->publish_state_and_save(0);
+    }
     this->last_day_of_year_ = t.day_of_year;
-    return;
   }
 
-  if (t.day_of_year != this->last_day_of_year_) {
-    this->last_day_of_year_ = t.day_of_year;
-    this->total_energy_ = 0;
-    this->publish_state_and_save(0);
+  // Calculate seconds until next midnight.
+  // Uses the same TIMEOUT_ID_MIDNIGHT ID so re-scheduling (e.g. from time sync) cancels
+  // any previously pending timeout.
+  uint32_t seconds_until_midnight =
+      ((HOURS_PER_DAY - 1 - t.hour) * MINUTES_PER_HOUR + (MINUTES_PER_HOUR - 1 - t.minute)) * SECONDS_PER_MINUTE +
+      (SECONDS_PER_MINUTE - t.second);
+
+  // set_timeout counts real elapsed millis, but DST shifts wall clock by up to 1 hour
+  // without changing millis. To avoid firing up to 1 hour late/early, we use two stages:
+  // 1) Wake up 90 minutes before midnight to recalculate with current wall clock
+  // 2) From there, schedule the precise midnight reset
+  uint32_t timeout_seconds;
+  if (seconds_until_midnight > PRE_MIDNIGHT_SECONDS) {
+    timeout_seconds = seconds_until_midnight - PRE_MIDNIGHT_SECONDS;
+  } else {
+    timeout_seconds = seconds_until_midnight + 1;
   }
+
+  ESP_LOGD(TAG, "Scheduling midnight check in %us", timeout_seconds);
+  this->set_timeout(TIMEOUT_ID_MIDNIGHT, timeout_seconds * MILLIS_PER_SECOND,
+                    [this]() { this->schedule_midnight_reset_(); });
 }
 
 void TotalDailyEnergy::publish_state_and_save(float state) {
@@ -50,14 +88,14 @@ void TotalDailyEnergy::publish_state_and_save(float state) {
 void TotalDailyEnergy::process_new_state_(float state) {
   if (std::isnan(state))
     return;
-  const uint32_t now = millis();
+  const uint32_t now = App.get_loop_component_start_time();
   const float old_state = this->last_power_state_;
   const float new_state = state;
-  float delta_hours = (now - this->last_update_) / 1000.0f / 60.0f / 60.0f;
+  float delta_hours = (now - this->last_update_) / static_cast<float>(MILLIS_PER_SECOND) / SECONDS_PER_HOUR;
   float delta_energy = 0.0f;
   switch (this->method_) {
     case TOTAL_DAILY_ENERGY_METHOD_TRAPEZOID:
-      delta_energy = delta_hours * (old_state + new_state) / 2.0;
+      delta_energy = delta_hours * (old_state + new_state) / 2.0f;
       break;
     case TOTAL_DAILY_ENERGY_METHOD_LEFT:
       delta_energy = delta_hours * old_state;
@@ -71,5 +109,4 @@ void TotalDailyEnergy::process_new_state_(float state) {
   this->publish_state_and_save(this->total_energy_ + delta_energy);
 }
 
-}  // namespace total_daily_energy
-}  // namespace esphome
+}  // namespace esphome::total_daily_energy
diff --git a/esphome/components/total_daily_energy/total_daily_energy.h b/esphome/components/total_daily_energy/total_daily_energy.h
index 1145f54f95..9a20ecea01 100644
--- a/esphome/components/total_daily_energy/total_daily_energy.h
+++ b/esphome/components/total_daily_energy/total_daily_energy.h
@@ -6,8 +6,7 @@
 #include "esphome/components/sensor/sensor.h"
 #include "esphome/components/time/real_time_clock.h"
 
-namespace esphome {
-namespace total_daily_energy {
+namespace esphome::total_daily_energy {
 
 enum TotalDailyEnergyMethod {
   TOTAL_DAILY_ENERGY_METHOD_TRAPEZOID = 0,
@@ -23,12 +22,12 @@ class TotalDailyEnergy : public sensor::Sensor, public Component {
   void set_method(TotalDailyEnergyMethod method) { method_ = method; }
   void setup() override;
   void dump_config() override;
-  void loop() override;
 
   void publish_state_and_save(float state);
 
  protected:
   void process_new_state_(float state);
+  void schedule_midnight_reset_();
 
   ESPPreferenceObject pref_;
   time::RealTimeClock *time_;
@@ -41,5 +40,4 @@ class TotalDailyEnergy : public sensor::Sensor, public Component {
   float last_power_state_{0.0f};
 };
 
-}  // namespace total_daily_energy
-}  // namespace esphome
+}  // namespace esphome::total_daily_energy