What is the Economy 7 tariff and could it save you money?

Economy 7 is an electricity tariff that offers cheaper electricity for 7 hours through the night. and is how the tariff gets its name. The off-peak hours are usually between midnight and 7am, but this can vary by supplier, and where you live. Economy 7 users are given two rates as part of their tariff: one that applies if you use electricity during peak hours, and one for off-peak hours. But it’s important to note that the ‘peak’ charges are often considerably higher than if you were on a ‘normal’ electricity tariff. So it’s usually only a cost effective option if lots of your electricity usage is at night.

This tariff is also known as a time-of-use tariff, a differential plan or multi-rate plan. Whether it could be a worthwhile option for you depends on when you tend to use electricity, and if you’re able to move your usage into those cheaper off-peak hours.

If you’re able to switch a portion of your electricity usage to off-peak times – such as if you charge an electric vehicle overnight – then Economy 7 could be a good option for you.

Why is it called Economy 7?

The tariff is called Economy 7 because suppliers offer a cheaper energy rate during 7 off-peak hours during the night. The remaining 17 hours of the day carry a more expensive rate.

The exact peak and off-peak hours are decided by the energy supplier.

When are the Economy 7 times?

Off-peak hours can vary slightly depending on the energy supplier, but the cheaper rate is typically applied between midnight and 7am. A more expensive rate is then charged over the rest of the day (between 7am and midnight).

Why does Economy 7 exist?

Economy 7’s main benefit is that it can save people money on their energy bills. But using electricity at night is also good for the environment.

Economy 7 promotes electricity usage when demand is at its lowest. This helps suppliers manage demand, and relieve pressure on the UK’s national grid. This is important, because when demand sometimes outstrips supply during peak periods, gas or diesel-powered plants need to be fired up, to help cope with demand.

Managing the UK’s power supply in this way adds to the UK’s carbon dioxide emissions, and this kind of reactive energy production is expensive. It causes price spikes for energy companies, which are subsequently passed on to customers.

How much could the Economy 7 tariff save me?

It depends. Economy 7 can be cheaper than a regular, single rate tariff, but you should first consider how you tend to use electricity. Do you mainly use electricity during the day? Or do you have things that require power through the night?

If you use a lot of electricity during off-peak hours, you could save a significant amount of money. But it’s worth pointing out that the peak hour rates are higher than normal, so you might end up paying more if you end up using most of your energy between 7am and midnight, and were on a ‘normal’ tariff.

Who could benefit from Economy 7?

The Economy 7 tariff was designed for people who use a lot of electricity during the night. So, this might be someone with a storage heater, or a hot water tank that needs to be full of hot water ready for the morning. These could be heated during the night, keeping you warm during the day. Or perhaps you have an electric car that needs charging?

And there are other situations where you can make the most of an Economy 7 tariff. You could set your appliances to come on at night. Setting washing machines, dishwashers and slow cookers to operate at night could reduce your bills considerably.

As a general guide, if you use more than 40% of your electricity at night, you could save money by switching to an Economy 7 tariff.

Do Economy 7 energy rates vary?

Yes, electricity rates can vary between suppliers. The Price Cap doesn’t set a limit on peak and off-peak Economy 7 prices. Energy companies can charge what they like, as long as they don’t exceed the overall Price Cap for a typical household.

Can I switch away from Economy 7 if I want to?

Yes. If you’re on an Economy 7 tariff and want to change to a regular single-rate tariff, most suppliers will let you switch without changing your meter.

It should be simple, and if you’re in a situation where you do need to change your meter, many energy companies will do this for free.

How can I get involved with Economy 7?

The majority of energy suppliers offer the Economy 7 tariff, but you’ll need a smart meter or a special Economy 7 meter installed. This is so that your supplier can see the time you’re using electricity, and charge you the right amount.

Be sure to check when the off-peak period starts and ends before switching, so you’re aware of the hours when you can access the cheaper rate.

Any other tips?

Keep an eye on what happens to your tariff when the clocks change in March and October. Some energy providers adjust the off-peak period accordingly, while others keep the same hours throughout the year.

Can I get an Economy 7 tariff for my gas?

No – Economy 7 is only applied to electricity tariffs. Because gas is mainly used for cooking, central heating and hot water, there isn’t the same likelihood of customers being able to switch to using gas during off-peak hours.