Energy Tariffs

Economy 7 energy tariffs

Article updated: Tuesday 26 May, 2009 By becca.talbot@consumerchoices.co.uk

An Economy 7 energy tariff is designed to save customers money, with different pricing structures at different times of the day. However, if not used properly, the tariff can result in even bigger bills than other standard energy tariffs.

Our guide to Economy 7 energy will tell you everything you need to know about the tariff, including how to get the most from it, and what pitfalls to avoid if you are already an Economy 7 customer.

• 1. What is an Economy 7 tariff?
• 2. How does Economy 7 work?
• 3. How much does Economy 7 cost?
• 4. The pros and cons of Economy 7
• 5. How do I switch
• 6. Change your habits
• 7. Save on your energy bills

1. What is an Economy 7 tariff?

Economy 7 is an electricity tariff designed to save you money by charging you less for using electricity at night time. The tariff sets two prices for your electricity – one for the night, and another for electricity used during the day.

It’s called Economy 7 because for seven hours every night (normally from 1am until 8am) your electricity will cost considerably less than the standard daytime rate. Although times can vary dependent on suppliers and regions.

2. How does Economy 7 work?

Economy 7 works by charging less for the electricity you use during the “off-peak” night time hours.

However, the ‘peak-hours’ during the day are a lot more expensive, so if the tariff isn’t managed effectively, your electricity can end up costing you significantly more than a customer on a standard energy tariff.

Heating your water and your storage heaters during the night is the most cost effective way of using Economy 7. The heat stored and emitted by the storage heaters during the night is generally relied on to last throughout most of the day, helping to save money on heating bills. Water is also heated and stored during the night, for use throughout the day.

To make an Economy tariff worth its while, you will usually need to install timing devices on key electrical appliances such as dishwashers, washing machines and tumble dryers, as well as ensuring your hot water boilers and storage heaters are switched on fully overnight, during the ‘off peak’ hours.

3. How much does Economy 7 cost?

If you are on an Economy 7 tariff, you will have a meter that measures the amount of electricity used during the day and the night separately. There will be two dials, and two sets of figures for each.

Costs for the tariff will vary from supplier to supplier, but an example of the different rates may be 8p per unit for the ‘peak’ hours, and 2.5p per unit for the cheaper night time ‘off-peak’ hours. You should check with the supplier to find out exactly what charges are involved with the tariff

.

To find out more about how it works and the different types of meters, read our Economy 7 guide.

4. The pros and cons of Economy 7

If you can manage your energy usage effectively, the most obvious advantage of Economy 7 is the amount you can save on your household’s fuel bills. Using appliances during the night instead of day could significantly reduce your bills.

Economy 7 uses a different kind of meter to a standard energy tariff. The meters, which separately measures the amount of electricity used during the night and the day, can be useful in helping you manage your fuel bills and cut down on energy consumption, making your home more energy efficient.

You should remember that some Economy 7 tariffs may charge you almost double the rate of a standard tariff for any energy you use during the ‘peak’ time, which can quickly cancel out any savings you’ve made through using Economy 7 at night.

If you pay a standing charge on your account, this may be higher if you have an Economy 7 tariff (anything up to 50% more). If your account does not have a standing charge, then instead the first ‘peak’ units you pay each quarter will be charged at a much higher rate.

It is a good idea to check with your supplier exactly what charges are involved on your account.

5. How do I switch

1. To a standard tariff? – If you are considering changing your household’s energy from Economy 7 to a standard tariff, you can use our online energy comparison service to find out what’s available to you, and compare rates to find the cheapest deal.
2. To an Economy 7 tariff? – Moving from a standard tariff to Economy 7 requires a change of meter, which your current energy supplier should arrange for you, although there may be a fee for the new meter to be installed. Once your Economy 7 meter has been installed you can then switch between suppliers.
3. To a different economy 7 tariff – if you are already an Economy 7 customer, make sure you are getting the best rates by comparing Economy 7 tariffs. It is easy to switch supplier using our online energy comparison service.

Read our Energy switching guide for more information on how to switch online.

6. Remember

An important factor to take into consideration with Economy 7 is that although you can heat your water and storage heater continually throughout the night, this may be insufficient to last you through the day.

Your house will be nice and warm when you wake up, with enough hot water for a bath or shower, but as you reach the evening your house will probably start growing colder.

This is not practical for large families or families with children for example – there may not be enough time for everyone to have a bath in the morning, or there may not be enough hot water for children to have a bath in the evening.

Although over six million people in the UK are on Economy 7 tariffs, many of them do not use their energy efficiently. As a general rule of thumb you would need to use more than 40% of your energy at night to make the tariff cost effective.

7. Save on your energy bills

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