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Economy 7

Economy 7, is an electricity tariff that means that you pay a different price for your electricity at different times of day, a bit like on-peak and off-peak phone calls
 

With Economy 7, the electricity you use at night costs about a third of the price of the electricity you use during the day – a big difference. The hours of cheap electricty are normally from 12 midnight until 07.00 in winter, and from 01.00 to 08.00 in summer, although this can vary between suppliers.

Economy 7 tariffs use a different kind of electricity meter, which, unlike a standard meter, can track the electricity you use during the day and at night separately.

Is Economy 7 right for me?

Whilst Economy 7 gives you seven hours of cheap electricity at night, the downside is that for the other 17 hours the electricity costs more than normal – higher than the standard tariff rate. This suits certain customers, but not others. If you are paying more for your daytime electricity, you should think about running appliances like your washing machine and dishwasher at night.

As a rule of thumb, Economy 7 will be cost-effective if you use electricity (not gas, which is a cheaper heating fuel) for your heating and hot water, and if you use more than 80% of your electricity at night.

For this to be the case you’re almost certainly using electric storage heaters for warming the house and have a hot water tank that is heated by electricity. This is because both storage heaters and hot water tanks can be timed to use cheap, night-time electricity and store this as heat until needed during the day.

If you heat your home and water with electricity, but don't have storage heaters or a hot water tank, Economy 7 probably won’t be cost effective for you.

If you are on an Economy 7 tariff, your electricity bill will show a day-rate and a night-rate.

Your electricity meter will likewise show two sets of numbers, one marked ‘low’ and one marked ‘normal’, or else there may be a set of figures marked ‘day rate’ and a red button, which you press to get your night reading. If you are in any doubt whether or not you are on Economy 7, call your electricity supplier.

Make sure the meter is set to the right time

On-peak and off-peak times vary between tariffs, regions and seasons. It is important that the meter is set to the correct time, otherwise you’ll find yourself being charged at the higher rate when you should be getting cheap rate electricity. There are a few ways to check when your meter moves over to the off-peak rate:

Often with Economy 7 the immersion heater will only start heating water when the off-peak period begins. So if you hear the immersion come on this is likely to be the start of your seven hours of cheap electricity.

You could use an energy monitor which will show a sharp increase in electricity demand when your storage heaters and immersion come on – indicating the beginning of the off-peak period. If you cannot lay your hands on an energy monitor you could try the ‘kettle test’ by boiling a full kettle of water (for a big pot of tea) and then checking whether the on-peak (normal) or off-peak (low) units have increased on the meter.

Although energy suppliers are not specifically required to check meter clocks they must take ‘reasonable steps’ to ensure the accuracy of the meter. So if you suspect there might be a fault then you should contact your energy company and they will be obliged to investigate.

Tips for saving money if you’re on Economy 7

  • Use appliances like dishwashers, washing machines and tumble dryers at night when electricity is cheaper. You could buy timers for them if this helps.
  • If possible, set the timer on your hot water tank so that the immersion heater comes on during the night, even if you use the hot water during the day.
  • Consider investing in a plug-in slow cooker - they use a fraction of the electricity that an oven will use.
  • Microwave instead of using the electric hob where possible.
  • Fit energy-saving light bulbs where possible.

Image: Alex Foster | flickr.com | creative commons

Frequently asked questions

How do I switch to an Economy 7 tariff?

The Economy 7 tariff is only usually recommended for people who use night storage heaters as their main form of heating. You'll need to have an Economy 7 meter installed so that your electricity use can be recorded at both 'day' and 'night' rates. You supplier may charge you for fitting a new meter. If you are switching tariff it's best to shop around to get the best deal. There are a number of independent online or freephone services that can help you.

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We can advise you about saving energy, or help you understand what grants and support you're eligible for:

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Do some tariffs give a cheap rate for a few hours during the day?

Yes, some electricity suppliers offer an Economy 10 tariff where an additional few hours of off-peak electricity are available each afternoon. This gives the householder an opportunity to recharge their storage heaters to get some additional heat in the evening or run appliances like the washing machine or dishwasher at a convenient time and take advantage of cheap rate electricity.

Need more help?

We can advise you about saving energy, or help you understand what grants and support you're eligible for:

Contact us Or freephone: 0800 082 2234


Next question

View all frequently asked questions

Need more help?

We can advise you about saving energy, or help you understand what grants and support you're eligible for:

Contact us

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