Should I switch to a time of use tariff?

A time of use electricity tariff charges you different rates depending on the time of day. When demand is low (usually overnight), electricity is cheaper. When demand is high (early evening), it’s more expensive. 

There are two main types of time of use tariffs:

Static time of use tariffs offer fixed cheaper hours every day. One common static time of use tariff is Economy 7, which offers cheaper electricity for seven hours overnight.

These are the same hours every day (although they might change with daylight savings time). People with Economy 7 typically use these hours to charge their electric storage heaters with heat. Some variations offer 8.5 or 10 hours.

There are some modern tariffs available if you have an electric vehicle (EV) chargepoint at home, but the principle is the same.

These are the new generation of tariffs enabled by smart meters. The price you pay for electricity can change every half hour, reflecting real-time demand and supply. Smart time of use tariffs reward flexibility and can lead to big savings on energy bills. 

With more renewable energy on the grid and more people with smart meters, smart time of use tariffs are becoming more common. They let you: 

• Shift energy use to cheaper periods. 
• Save money on your electricity bill. 
• Reduce your carbon footprint. 

Usually, yes. Many time of use tariffs set their off-peak electricity rates overnight. So, running your washing machine or charging an electric car at night can make a difference. 

If you’re on a standard electricity tariff, the price is the same whatever the time of day or night. So, running your washing machine at midnight won’t make a difference. 

Some people will save a lot, some will save a little. If you use most of your energy during peak times and can’t shift that, it could even cost a little more. In that case, a time of use tariff probably isn’t for you. 

If you can move your energy use to cheaper periods, like charging an electric vehicle when prices are low, you could benefit the most. The more flexible you are, the bigger the savings. 

If you have a home battery, being flexible is easier. You can store cheap electricity when prices are low and use it later, even during peak times. This can significantly increase your savings and reduce your reliance on expensive energy periods. 

A time of use tariff might not save you money if your energy use is mostly fixed. For example, if you work from home during peak hours and: 

• Don’t have a home battery or electric vehicle. 
• You can’t shift your appliance use. 

Shifting electricity use to off-peak times doesn’t just save money, it can reduce your carbon footprint. Here’s why: 

• The UK electricity grid is supplied by a mix of sources: wind, nuclear, gas and solar. 
• At peak times (eg 5 pm on a calm day) there’s more demand, so more electricity comes from gas, meaning higher emissions. 
• At off-peak times (eg overnight, and its windy) demand is lower and more electricity comes from renewable sources, meaning lower emissions. 

If you combine a smart tariff with solar panels or a home battery, you can store clean energy when it’s abundant and use it later. This reduces the demand during the peak times and helps make that energy cleaner, too. 

Smart time of use tariffs are worth exploring if: 

• You can be flexible when you use electricity. 
• You’re planning to install tech like an EV charger, heat pump or home battery 

But if your use is fixed, there might not be any benefit to you. 

Before switching energy tariff, it’s worth doing a quick check to see if the switch is right for you. Here’s how: 

If you’ve had a smart meter for a while, you can usually download your half-hourly usage data from your supplier or your online account. 

Look at when you use the most electricity. If most of your energy use is in the evening (4 to 7 pm), savings might be harder unless you can move some of that. 

Can you run appliances during off-peak times? 

Do you have (or plan to get) an EV, heat pump or home battery? These make smart tariffs much more valuable. 

Some suppliers and comparison tools let you upload your half-hourly data to estimate what you’d pay on their smart tariff. 

While past tariff rates don’t guarantee future rates, this can give you a useful indicator of potential savings.

If reducing your carbon footprint matters to you, smart tariffs can help by shifting your use to times when the grid is cleaner. 

Smart time of use tariffs need a smart meter that communicates with your supplier every half hour. If you don’t have one, your supplier can install it for free. 

Ask if it offers smart time of use tariffs. Many big suppliers now have options. 

Use comparison sites or your supplier’s website to see what’s available. Look for: 

• Off-peak rates and times. 
• Peak rates (important if you can’t shift much of your energy use). 
• Any standing charges or exit fees. 

For more information, read our guide on switching energy supplier.

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