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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?

While 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 those on a singe-rate tariff. This suits certain customers, but not others. If you are paying more for your day-time 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 for your heating and hot water (not gas, which is a much cheaper heating fuel) and if you use more than 40% of your electricity at night.

For this to be the case, you’re almost certainly using electric night 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 with electricity, but don’t have storage heaters or a hot water tank, Economy 7 probably won’t be cost effective for you, but your electricity supplier can confirm this. 

If you are on an Economy 7 tariff, both your electricity meter and electricity bill will show a day-rate and night-rate. If you are in any doubt whether or not you are on Economy 7, call your electricity supplier.

Wiring circuits

A home using Economy 7 should have two wiring circuits. The main wiring circuit is the same as in any home, connecting to the plug sockets, lights etc. Anything using this circuit will turn on at any time, but if turned on at night you will be charged the cheaper rate.

There will also be a second wiring circuit that is connected to just the night storage heaters and (usually) the hot water tank – and this circuit will only activate when the electricity meter switches to off-peak mode.

Next to your heaters and hot water tank there will often be 1-2 socket switches – but which ones connect to the on-peak or off-peak circuit will depend on your individual home set-up. Any off-peak switches can be left ‘on’ as they will not actually be heating during the day. Any on-peak switches should only be turned on for a short period of time, if you need to boost the heating or hot water.

If you ever move off Economy 7 and onto a single-rate tariff (e.g. you get gas heating installed) you need to make sure an electrician checks the wiring in the home, as there is a risk the old Economy 7 wiring circuit will be always active and your heaters and tank are heating continuously.

Hot water tank

An Economy 7 hot water tank will have a slightly different set up than a standard immersion tank, in order to take advantage of cheaper off-peak rates. (See our separate factsheet on tank insulation and water temperature). 

On the front of the tank you should see two circular disks, with wires connecting into the wall. These are the two heating elements (illustration below). 

The lower heating element is the main one. It should be turning on automatically during off-peak hours, and will heat the whole tank. In some homes you may have additional controls, such as being able to turn it off at the wall or set a timer so the tank does not heat for the full 7 hours.

The top heating element is a boost. It is intended to heat the top section of the tank and provide extra hot water if you run out during the day. It should always have a control or switch that allows you to turn it on and off. This is because the boost can use on-peak electricity. Only turn it on for 1-2 hours when needed, as it can be extremely expensive if left on for a long period of time (when on continuously it can add several hundred pounds to your annual bill).


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.

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


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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

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