Many people have heard of Economy 7 tariffs, but aren’t sure if it’s right choice for their home. Use this guide to find out if Economy 7 is the best option for you.
Remember, even if you decide Economy 7 is the best option for your home, you can always knock hundreds of pounds off your bill by switching to a cheaper Economy 7 deal.
How does Economy 7 work?
Put simply, having an Economy 7 meter means you will be charged different rates for your electricity (there is no such thing as Economy 7 for gas), depending on the time of consumption.
In most cases, cheaper electricity is available between midnight and 7am and more expensive rates kick in from 7am to midnight. The difference between day and night rates varies between suppliers, but is often close to 40% more expensive during the day.
For more information on how Economy 7 works and finding out if you have Economy 7, check our dedicated guide.
Economy 10 meters work in a similar way.
A bit of history
The first Economy 7 tariffs appeared back in 1978. They were designed to benefit homes with storage heaters. The latter work by storing heat during the night, when electricity is cheaper, and releasing it during the day, resulting in a cheaper overall cost.
Why is electricity cheaper during the night? Well, simply because the electricity grid is under less pressure at this point in time as fewer people use electricity in the dead of night.
However, nowadays many households have switched to more efficient gas heating systems. This means that being on an Economy 7 tariff could result in homes paying more than they should.
On top of this, relatively few energy suppliers offer competitive Economy 7 plans. This means many homes are paying over the odds for their electricity.
Even more concerning is that research from Consumer Focus in 2012, found that hundreds of thousands of Brits on Economy 7 did not know how to make the best use of their tariff.
Who should consider Economy 7?
The golden rule is that if you use about 40% of your electricity during the night, then Economy 7 should be a cost effective choice for your home.
Other considerations include, if your household has a storage heater or a hot water tank, which can be switched on at off-peak consumption times. In both of these cases it might be worth keeping or switching to Economy 7. You should also consider doing as much of your washing and charging as possible during off-peak times.
You can find out more, including how to switch away from Economy 7, in our dedicated guide.
Five tips to make the most of an Economy 7 tariff
So you’ve worked out that having an Economy 7 tariff makes sense for your home. Great, but there are still some actions you can take to make even more savings.
Get a better deal on Economy 7
Even if you are on an Economy 7 tariff and your electricity consumption patterns mean it makes sense for you to stay on a time of use plan, you can still find better deals. Several suppliers offer Economy 7 deals, which could be hundreds of pounds cheaper than the one you are already on.
Make sure you know when off-peak consumption times are
This might seem like an obvious point, but you would be surprised at how many homes are not sure when peak and off-peak times are. The name “Economy 7” originally relates to the seven hour period in which electricity is cheaper. However, different suppliers have different set times, so make sure you are aware when yours are.
Use timers on your appliances
To make sure you are getting the most out of cheap night rates, use timers to ensure your washing machine and dishwasher are on at the right times. Do the same when it comes to recharging your gadgets.
However, do not do this with your tumble drier, as fire brigades have labelled their use when no one is awake as a potential fire risk.
Watch the clock!
Not all Economy 7 meters will change their internal time when the clocks move forward. Make sure you know what your day-night rates are during the summer to ensure you do not end up mistakenly setting your appliances to switch on during peak times.
Some meters might have this information written on them, in other cases you might need to contact your supplier.
Send your supplier frequent meter readings
This is essential if you want to make sure your energy supplier sends you accurate bills. Without meter readings your supplier will estimate your usage for large parts of the year and you could end up being over or undercharged. We recommend sending a meter reading at least once every three months.
In the future, your smart meter will take care of sending out meter readings, but until you have yours installed, you will need to keep doing it manually.
Want to know more about Economy 7? Check our dedicated guide.
Find out more about Economy 10 meters and how they work.
When will your smart meter be installed? Find out here.