Economy 7 electricity tariffs
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What is an Economy 7 electricity tariff?
The Economy 7 tariff is designed as a way of encouraging customers to use most of their electricity at times when it is least in demand across the network – typically at night.
It is also known as a Time of Use tariff, which defines any deal where customers are charged different rates for their electricity at specified times of the day. The other Time of Use tariffs are the Economy 10 and protected multi-rate tariffs, both of which offer cheaper electricity at certain times. The following is a short guide to the Economy 7 tariff – used by 66% of customers on Time of Use tariffs.
What is Economy 7?
An Economy 7 tariff is a type of electricity tariff where you pay a lower price for the electricity you use during the night than that you use during the day. Depending on your circumstances, this can be a useful way of saving money on your overall energy bill. The tariff is called Economy 7 as the lower rates apply for a specified seven hours each night. The time-frame these off-peak hours fall into for your particular tariff are determined by your supplier who will also take into account your location. Typically, this is any seven-hour period between 10pm and 8am.
Whatever time period you have been given will change when the clocks go back or forward – contact your supplier or check your latest energy bill if you become unsure when your Economy 7 rates are due to start. This will help to avoid accidentally paying more than necessary. Daytime rates can be as much as three times higher than your night rates – and usually more expensive than your supplier’s standard rates – so it is important to be careful with your usage in the day to avoid overpaying.
The Economy 7 meter
Households using the Economy 7 tariff will be required to get a special two rate meter installed that records two different readings – one for electricity used during the day and one for electricity used during the seven hours at night.
The meter will either have two sets of numbers – one marked ‘low’ and one marked ‘normal’ – or will have one set of numbers displaying either the daytime or night-time reading, along with a red button that can be pressed to switch between the two.
Is an Economy 7 tariff right for me?
Taking into account the lower rates for electricity at night, you’ll need to evaluate the typical times you usually use energy to help determine whether an Economy 7 tariff is a cost-effective option for you. You should be using around 40% of your electricity at night, which helps to ensure you’re not cancelling out the savings you make at night by using too much electricity during the day.
There are also several circumstances where you can gain the maximum benefit of an Economy 7 tariff. These include:
You use electric storage heaters and hot water tanks (also known as an immersion heater): An Economy 7 tariff enables you to heat your electric storage heaters and your hot water overnight, for them to slowly emit the stored heat the next day. This means you won’t need to use electricity for heating or hot water during the day. If you heat your home with gas, Economy 7 can still work for you, as long as most of your electricity use is at night.
Your appliances have a timer: With an Economy 7 tariff, it’s best to use appliances overnight whenever possible, so it can help if your dishwasher, washing machine and tumble dryer have a timer so you can leave them running overnight. You might consider buying and installing low-cost timers if they are not already built in to the appliances. When it comes to running your tumble dryer, it’s best to set it to come on just before you wake up, to avoid it running while you’re asleep.
You’re usually home only at night: If your home is vacant for most of the day, most of your household electricity will be consumed at night, making an Economy 7 tariff ideal. It is also important to maximise your night-time usage, including for smaller appliances such as charging laptops and phones.
You use electricity – not gas – for the majority of your energy: An Economy 7 tariff is most cost-effective if everything in your household is powered by electricity.
You’re disciplined about your energy usage: An Economy 7 tariff is most beneficial if you can make sure you only use electricity during the off-peak times, and can minimise your usage during the day, every day.
How to find out if you’re on an Economy 7 tariff
As the Economy 7 tariff is unique compared to standard tariffs – and can cost a lot of money if you don’t know how to manage your energy consumption properly – it is important to find out whether your household is on an Economy 7 tariff, particularly if you’ve just moved into a new property.
The first thing you might want to check is your meter – if it can display two different rates as outlined above, you’re probably on an Economy 7 tariff. Alternatively, you can wait to receive your electricity bill – if it notes two different rates, one for night and one for day, you’re probably on an Economy 7 tariff. The Meter Point Access Number (MPAN) on your bill will also start with ‘02’. You could also contact your supplier for more information.
Switching to an Economy 7 tariff
If you’re not currently an Economy 7 customer but would like to be, you’ll need to get an Economy 7 meter installed at your household, which may be done free of charge or could cost around £50. Whether or not you need to pay to install a meter depends on the supplier you choose, so it’s important to take this into consideration when comparing Economy 7 tariffs across suppliers. Once your meter is installed, you can switch between Economy 7 tariffs at no extra cost.
You can compare Economy 7 tariffs through a price comparison site, using an energy broker or by going through each supplier’s deals individually. Once you’ve found a deal you’re happy with, your chosen supplier can arrange to have the meter fitted.
Switching away from Economy 7
If you’re on an Economy 7 tariff but no longer wish to be, the best course of action is to contact your current electricity supplier to find out what you need to do. Your supplier may charge you to install a new meter, although some suppliers can use your Economy 7 meter to get your usage figures instead.
When switching, it is important to make sure you fulfil any conditions of your current Economy 7 deal, including making sure you’re not in the middle of the tariff term. Switching away before your tariff is due to end can incur cancellation fees. Once you’ve arranged your switch, your new supplier may automatically move you onto their standard tariff, so it’s important to compare tariffs as soon as possible so you can move onto a cheaper tariff.
If you’re looking to save money, instead of switching away from an Economy 7 tariff, you might instead compare deals across other suppliers, as you may find a cheaper Economy 7 rate elsewhere. Managing your energy usage with off-peak times in mind can also help save money on an Economy 7 tariff, as well as making sure your home is well-insulated and energy-efficient.
Alternatives to Economy 7
An alternative to the Economy 7 tariff is the Economy 10 tariff, which offers ten hours of cheaper electricity rather than seven. The Economy 10 also differs in that the cheaper hours are split into three different time periods – often into three-, two- and five-hour time periods. Again, you'll need a special Economy 10 meter for this tariff, and will benefit if you have storage heaters and use most of your energy during the specified off-peak times. If you’re interested in an Economy 10 tariff – which is also known as Heatwise – you’ll need to contact individual suppliers directly, as price comparison sites tend not to offer the deal.
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