Economy 7 is designed to save customers money. 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?
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 depending on your energy supplier and the region it operates in.
2. How does Economy 7 work?
Economy 7 works by charging less for the electricity you use during "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 customers on a standard energy tariff.
Heating your water and 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 7 tariff worthwhile, 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 boiler and storage heaters are switched on fully overnight, during the "off peak" hours.
3. How much does Economy 7 cost?
If you're 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 or a different set of figures for each - one marked "low" and the other marked "normal".
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 or look at your energy bill to find out exactly what charges are involved.
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. 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 measure 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 you 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 also be higher if you have an Economy 7 tariff - anything up to 50% more. If your account does not have a standing charge, then the first "peak" units you pay each quarter will be charged at a much higher rate.
It's a good idea to check with your supplier exactly what charges are involved on your account.
5. How do I switch
- To a standard tariff- If you are considering changing your household 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.
- 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 as you would on a standard tariff.
- 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.
An important factor to take into consideration with Economy 7 is that, although you can heat your water and use storage heaters continually throughout the night, this may be insufficient to last you through the next 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, and there may be no more water to go round.
This may not be practical for large families or families with children for example - there may not be enough time for everyone to have a shower 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, making Economy 7 both impractical and expensive.
As a general rule, you would need to use more than 40% of your energy at night to make the tariff cost effective.
Also, whether you're on the Economy 7 tariff or not, you should take steps to make your home more energy efficient.
So you should always do whatever you reasonably can to reduce your current use of electricity and other fuels - draft excluding and loft-lagging etc. - as this not only reduces your energy bills but also helps to reduce your carbon footprint as well.