What is a time of use tariff, and how can I get one?
Feb 19, 2021
A time-of-use tariff offers at least two different prices for the energy you use at different times in a day. Some time-of-use tariffs also have a third, ‘peak’ rate, which encourages us to avoid using energy at busy times too.
Households on time-of-use (ToU) tariffs get cheaper prices when demand is generally low.
The idea behind these tariffs is to smooth demand out across each day, reducing the way that demand peaks in the early evening. Low prices mean households will use more energy when demand is normally lower. Shifting demand into quieter times supports a greener electricity system – as we won’t have to switch to more polluting fossil-fuel based generation to cover the normal daily peaks in demand.
Because electric cars use so much energy, and can easily be delayed, many of these tariffs are offered only to EV owners and marketed as EV tariffs.
Time-of-use tariff factfile
Time-of-use tariffs help customers lower their bills by using energy at off-peak times
By shifting use, you help reduce the energy ‘rush hours’
You’ll need a smart meter for most time-of-use tariffs
It’s much harder to compare tariffs, because what you pay depends on when you use energy as well as how much you use.
What’s wrong with flat prices for electricity?
UK energy infrastructure is changing rapidly. More and more energy from renewables is great. If we want to hit our carbon targets, we need to look beyond traditional coal powered plants to help out in the times where supply doesn’t keep up with demand.
Time-of-use tariffs, especially as more and more households charge electric cars and switch to electric heating, can help by giving us price signals that tell us when we should be switching on and off. In other words, by making savings with time-of-use tariffs, households help close any gap between energy supply and demand.
What are peak and off-peak times for electricity?
Some energy suppliers charge less for using electricity at certain times. ‘Off-peak’ hours are the quietest periods, most of them are between midnight and 7am. Some tariffs offer weekend daytime off-peak rates too. For more information, see our complete list of time-of-use tariffs and the hours they use.
What are the pros and cons of time-of-use tariffs?
Cheaper overnight energy
Energy from greener sources for your home
Relieves pressure on UK energy infrastructure
You’ll make the best savings if you change the way you use energy – things like running your washing machine at night
Standing charges and daytime rates can be higher, as suppliers are keen to protect their profit margin.
Do I need a smart meter for a time-of-use tariff?
You’ll need a smart meter to get a ToU tariff from most suppliers. A smart meter automatically sends information about when you’re using energy to your supplier. Some EV tariffs will also work with a legacy Economy 7 meter.
Why is overnight EV charging greener?
Economy 7 was built on the idea that people with night storage heaters would use more energy during the night when fewer other people were using it. This was because energy from coal and nuclear was produced round the clock and couldn’t easily be switched on and off.