Economy 7 Guide: How Economy 7 Tariffs Work
Economy 7 tariffs charge different prices for your energy depending on the time of day. While costs at night can be significantly lower than on a regular tariff, rates are much more expensive during the day. Find out how you can save money on an Economy 7 tariff to decide whether it could be the right fit for you.
What is Economy 7?
Economy 7 is an electricity tariff that could help you save money on your overnight energy costs. A specially installed Economy 7 meter switches your unit rates automatically between a day-time rate and a cheaper night-time rate.
Economy 7 could particularly help keep your costs down if you run electric storage heaters and energy-sapping appliances such as washing machines, dishwashers and slow cookers at night.
Why is it called Economy 7? The name ‘Economy 7’ comes from the seven-hour off-peak time slot when electricity is cheaper due to lower demand on the National Grid. The major downside to one of these plans is that electricity is a lot more expensive during the daytime.
What Is an Economy 7 Meter?
An Economy 7 meter has a special design that allows them to measure electricity usage at two or more different rates. If you have an Economy 7 meter, you will see two readouts labelled ‘normal’ and ‘low’ or ‘day rate’ and a button that switches it to ‘night rate’. This is what allows these tariffs to work.
If you decide to switch to an Economy 7 tariff you may need to have a compatible dual-rate meter fitted. If you decide to switch back to a standard tariff, your meter may have to be changed over again. Depending on whether you are switching energy suppliers or not, you may be charged to have a new meter installed, which can cost anywhere between £50 and £130.
It’s important to double-check if the potential savings from an Economy 7 tariff are likely to be undercut by electricity meter installation fees.
Is Economy 7 Going To Be Phased Out?
Economy 7 is still available from a number of electricity suppliers, though its days looked numbered. Around 3.5 million households in England still have Economy 7 meters, however this number is falling as providers promote smart metering as the way forward.
Economy 7 Heating
The main use for Economy 7 tariffs and meters is for households who use electricity instead of gas central heating to warm their homes. Since electricity is more expensive per kWh, lowering the rate during the night benefits customers who use storage heaters.
What Are Storage Heaters Economy 7?
Electric storage heaters work by warming up internal ceramic bricks that can hold heat over time so that it can be stored and released when needed. Households that have storage heaters can unlock savings with Economy 7 tariffs as they can be run during the night, at the cheaper off-peak rate, storing up heat that can be released when needed the next day.
Storage heaters can have a number of different controls. Older or basic models should have both an input dial, which controls how much heat will be stored, and an output dial to set how much heat is being released. These heaters take a lot longer to cool down than newer models, which can lead to unintended heat loss.
More advanced and recent models may just have a thermostat to set a temperature goal so that you don’t need to worry about anything else. Newer High Heat Retention Storage Heater designs can provide increased performance, though installation costs can potentially cancel out any savings gained from Economy 7 tariffs.
Economy 7 Tariff
Virtually all bigger energy companies will offer an Economy 7 tariff and give you both day and night rates that you can combine with a dual-fuel tariff. British Gas, SSE, EDF Energy are all companies that will cater for Economy 7 meters. Some smaller companies will also offer an Economy 7 tariff.
|Energy February 2023
What Is the Best Economy 7 Tariff?
Before the energy crisis and the collapse of 27 domestic energy suppliers within the last eight months, the best economy 7 tariffs could be found with Neon Reef’s Aqua tariff, Spark Energy’s Tili Select Saver, and Entice Energy’s Flexible Saver. All of these energy suppliers, however, have gone bust.
Currently, energy suppliers are not offering any tariffs except to a very few customers, so if you are looking to switch to an Economy 7 tariff, you should wait until after the April 2022 price cap comes into effect. However, before the crisis, the best tariffs available from surviving suppliers were:
What Help Is There Available?
In response to the rising energy prices, the government has announced schemes to help those customers struggling.
Up to £350 per household to help customers manage their energy bills. £200 will be a discount off energy bills to apply in October and will be paid back by customers from 2024. £150 will be a Council Tax Rebate for those households in Tax Bands A-D.
In addition, the government has raised the Warm Home Discount to £150 and launched £144 million of discretionary funding to councils.
You may also be able to take advantage of other schemes that have been set up to help customers with their energy bills. You can read about them in our Home Energy Grants and Schemes Guide.
Economy 7 Times
Economy 7 off-peak hours will largely depend on your area. During the off-peak time, your night rate will be activated and this is the time in which you should use the majority of your high energy consumption devices.
1.5 million British homes have this system in place to automatically turn on storage heaters or appliances running on a separate circuit. It allows electricity suppliers to stagger the time storage heating kicks in throughout the country, which prevents overloading the electricity grid.
Economy 7 timings in My Area
Economy 7 off-peak times can vary nationwide. You should always check the schedule with your own energy provider, but the table below will give you a general idea.
|Economy 7 off-peak times
|12:00am-7:00am OR 12:30am-7:30am
|Merseyside and North Wales
|No standard off-peak time, but typically seven hours between 11pm and 7am
|10:30pm-12:30am and 2:30am-7:30am
|11:30pm-6:30am or 12:30am-7:30pm
It is worth keeping in mind that the off-peak times can shift when clocks go back or forward during the year. Timing your electricity use accurately during off-peak hours is crucial if you want to lower your electricity bill.
If you can schedule the bulk of your electricity consumption to the off-peak hours set by your energy provider, then an Economy 7 tariff may be for you. However, your heating and hot water systems also play a major role in how much you could end up saving on your electricity bill.
Economy 7 Smart Meter
It is possible to have an Economy 7 smart meter where the smart meter can be put onto an Economy 7 mode. A smart meter will send your meter readings regularly and automatically to your energy company to make sure you’re paying exactly what you use.
You should check with your energy provider to see if they will support your Economy 7 tariff with a smart meter.
How To Change from Economy 7 to Standard Meter
You should be able to switch to a single-rate tariff without having to change your meter since most dual-rate meter can support a single rate. If you have gas central heating at home, it might even work out cheaper for you to switch to a single-rate tariff.
You should check with your energy supplier whether they make the switch for you.
Is Economy 7 Worth It?
At Selectra, we speak with hundreds of customers about their gas and electricity. Time and time again, we see people on Economy 7 meters overpaying for their electricity due to a whole host of issues.
Many Economy 7 meters are older models and their reliability suffers for it. In some cases, the meters do not switch correctly to Daylight Savings Time or their internal clocks change over time. Technical issues aside, Economy 7 tariffs can require know-how, routine and discipline for customers to benefit from them.
Selectra’s Verdict on Economy 7
We lead much busier and more flexible lives now than in the 1970s, when Economy 7 was first introduced to respond to increasing energy demand, prices and economic hardship. Nowadays, differential tariffs like Economy 7 can seem very much a relic of the past just like the storage heaters that are designed to work with them.
For this reason, we can only recommend Economy 7 if you have recent and efficient storage heaters. For most modern households Economy 7 just doesn’t make sense, so switching to a cheaper fixed rate tariff is our strong recommendation.