For anyone living on a tight budget, the rising cost of electricity bills is a constant concern. You might try and focus on switching lights off when you’re not using them, turning thermostats down and not overfilling your kettle in an attempt to cut back on what you’re spending, but is there another way?
Economy 7 electricity tariffs might be one option if you’re looking to save on your electricity bills. They track when you’re using electricity and give you a different rate for electricity used in the day time and at night. This could mean it might work out cheaper for you depending on when you’re using electricity – but it could also end up more expensive too.
How it works
To be on an Economy 7 electricity tariff, you’ll need an Economy 7 meter. These meters charge you for using electricity on two different rates – the day rate and the night rate. The day rate usually runs from 7 am until midnight and the night rate runs for the rest of the time, but this can vary based on the electricity supplier and the meter, so make sure to check when your night rate is.
You’ll be charged a lower price for electricity you’re using on the night rate compared to the day rate. You’ll typically pay between 13p and 17p per kWh on your Economy 7 day rate while you’ll pay around 7p to 10p per kWh for electricity on the night rate.
As a real-world example*, if you were to use a standard washing machine for 15 hours in a month on the Economy 7 day rate, it could cost an average of £2.70. On the night rate, it could cost you around £1.50. That’s an average saving of £1.20 a month, or £14.40 a year. When you think about all of the appliances in your home, you could save quite a substantial amount off your electricity bills on Economy 7 if you commit to using some of your appliances at night instead.
Of course, this doesn’t mean you need to become nocturnal to save money on energy. Economy 7 is best suited to homes with storage heaters and water tanks that can be programmed to run at night. You’ll then be able to use hot water and heating throughout the next day without having to pay for the electricity on the day rate. You might also be able to run certain appliances on timers – washing machines or dishwashers – so that they can make the most of the cheaper night electricity.
Economy 7 is only suited to people who are willing to use their energy in this way so if you don’t want the trouble of having to use appliances at night, you might be best sticking to a traditional electricity tariff. If you’re on an Economy 7 tariff and you don’t use much electricity at night, you could end up paying more than you would do if you were to stay on a standard plan instead.
Switching to an Economy 7 tariff will mean having an Economy 7 meter installed. You’re likely to be charged for this and the same will probably apply if you want to switch from an Economy 7 tariff back to a traditional plan. However, some energy suppliers will let you keep an Economy 7 meter and just charge you a flat rate for electricity through this – it’s worth getting in touch with your supplier to see what its rules are.
*Calculated using the UKPower Electricity Running Costs Calculator