Economy 7 Tariffs myths vs facts

The truth about off-peak electricity in Britain

Economy 7 sounds simple: seven cheaper night hours, higher daytime rates. In practice, savings depend on when and how you use power. We separate myths from facts so you can choose a tariff that matches your routine and budget.

Understanding Economy 7 starts with your hourly usage, not the headline night rate.

Is Economy 7 right for you?

If you can shift a meaningful share of electricity use to night-time - think immersion heaters, storage heaters, EV charging, or scheduled appliances - Economy 7 can cut bills. If your household is busy during daylight and most demand happens 07:30 to 23:30, a standard or other time-of-use tariff may cost less overall. Renters, EV owners, and homes with electric heating should look closely.

Jargon made clear

• Economy 7: A tariff with two unit rates - a cheaper night rate for around seven off-peak hours and a higher day rate the rest of the time.
• Off-peak window: Typically seven consecutive night hours, often somewhere between 00:30 and 07:30. The exact times vary by supplier and region, and British Summer Time can shift them slightly. Always confirm your meter’s schedule.
• Dual-register meter: A meter that records day and night usage separately. Smart meters can do this with the right configuration.
• Price cap: Ofgem’s Energy Price Cap limits the annual cost for a typical household. As of Oct-Dec 2025, a typical Economy 7 customer is capped at £1,179 per year. Suppliers still set day and night unit prices within that cap.
• Usage threshold: As a rule of thumb, you often need at least 40% of consumption off-peak to beat a standard tariff. Your exact break-even depends on your supplier’s day-night split.
• Time-of-use tariff: Newer tariffs that may offer more than seven cheap hours or dynamic pricing across the day, often managed via smart meters.

What are your choices?

Economy 7 is one option among several. The best fit depends on your routine, metering, and appliances.

Key points:

• Suppliers decide the day-night split within the cap, so night rates and day penalties vary. Comparison matters.
• Economy 7 is still available from major providers, though some are shifting to flexible smart tariffs.
• Switching is usually straightforward, especially if you already have a smart meter configured for dual rates.

Pounds and pence: what it means for your bill

• Day rates on Economy 7 can be nearly double standard tariffs. If most of your usage is during the day, costs can rise quickly.
• Savings typically require shifting 40% or more of usage into the off-peak window. Households charging an EV overnight or heating water with an immersion heater often meet this threshold.
• Ofgem’s price cap applies to Economy 7, with a typical cost of £1,179 per year for Oct-Dec 2025. The cap protects the overall bill for a typical profile, but it does not standardise individual unit rates.
• Meter upgrades or reconfiguration may be needed. Some suppliers cover this, others may charge or require an appointment.
• Risk: if your routine changes - for example, hybrid working shifts back to the office - your day share could increase and erode savings.

Standout insight:

High day rates can wipe out cheap nights if you only move a little usage.

Who qualifies and what you need in place

• Metering: You need a dual-register or compatible smart meter that records day and night separately. Without it, you cannot access the off-peak rate.
• Property type: Flats and homes with electric heating often benefit, but any home can qualify if metering is suitable.
• Usage profile: Best for those who can automate off-peak use - EV charging, storage heating, dishwashers, washing machines, and immersion heaters.
• Regional timing: Off-peak windows vary by network region and supplier. Check your meter label, in-home display, or contract for exact hours, especially around British Summer Time changes.
• Tenants: You can usually switch supplier and tariff if you pay the bill, but check tenancy agreements for restrictions on meter changes.

What to do - step by step

1. Download your last 12 months of half-hourly usage data.
2. Estimate your current off-peak share across typical weeks.
3. Confirm your exact off-peak hours with your supplier.
4. Compare day and night rates from at least three providers.
5. Model bills at 30%, 40%, and 60% off-peak usage.
6. Check meter compatibility and any upgrade costs.
7. Schedule appliances to run within the off-peak window.
8. Reassess after one to two billing cycles.

Advantages and watchpoints

Pros:

• Lower night rate can materially cut bills for night-heavy users.
• Encourages smarter energy use and supports grid balance.
• Works well with EV charging and storage heaters.
• Covered by Ofgem’s price cap for overall bill protection.

Cons:

• Day rates are often much higher than standard tariffs.
• Off-peak times vary by supplier and can shift with BST.
• Requires suitable metering and sometimes an upgrade appointment.
• Not the cheapest for daytime-heavy households.

Common pitfalls to avoid

• Assuming off-peak hours are identical nationwide. They are not. Verify your window.
• Overestimating how much usage you can shift. Be realistic and test schedules.
• Ignoring standing charges and regional pricing when comparing.
• Missing clock changes. Your dishwasher finishing outside the window costs more than you think.
• Forgetting lifestyle changes. School holidays or new working patterns can raise daytime use.

If Economy 7 is not a match

• Standard variable or fixed single-rate tariffs can be more predictable if you use most power during the day.
• Smart time-of-use tariffs may offer more cheap hours or dynamic prices that beat classic Economy 7 for flexible users.
• Consider efficiency upgrades: better insulation, LED lighting, and smart thermostats reduce total consumption regardless of tariff.
• For EV owners, look for EV-specific plans with longer off-peak windows.

Quick answers to frequent questions

Q: Do I always save with Economy 7? A: No. You generally need around 40% of usage at night to beat standard tariffs. High day rates can offset cheap nights if you cannot shift enough.

Q: Are Economy 7 bills protected by the price cap? A: Yes. Ofgem’s price cap applies, with a typical Economy 7 household capped at £1,179 for Oct-Dec 2025. Suppliers still set individual day and night unit rates.

Q: Are off-peak hours the same everywhere? A: No. They vary by region and supplier, usually within 00:30 to 07:30. British Summer Time can shift timings. Always confirm with your supplier or meter.

Q: Do I need a special meter? A: Yes. You need a dual-register meter or a smart meter configured for day and night rates. Without it, you cannot access off-peak pricing.

Q: Is Economy 7 only for homes with storage heaters? A: No. It also suits EV owners, homes with immersion heaters, and households able to run appliances overnight.

Q: Is Economy 7 becoming obsolete? A: Some suppliers are moving toward flexible time-of-use tariffs, but Economy 7 remains available and viable for many households in 2025.

What to do next

• Check your current usage split and confirm off-peak hours.
• Compare at least three suppliers on day-night splits, standing charges, and off-peak windows.
• If suitable, arrange a smart meter or enable dual rates, then automate overnight usage.
• Review after the first bill and adjust schedules to maximise off-peak share.

Important information

This guide is general information, not personalised advice. Energy prices and tariff availability change regularly. Confirm rates, off-peak windows, meter requirements, and any fees with your supplier before switching. Always consider your actual usage profile.