Energy Price Cap & Economy 7 Tariffs: Is It Still Worth It?

The energy price cap, which is set by Ofgem, determines how much energy suppliers can charge their customers for each unit of energy on standard variable tariffs. However, the price cap works differently for Economy 7 tariffs. Economy 7 tariffs offer different rates for energy use during the day and at night.

Economy 7 is a good option for homes that use a lot of electricity at night. This is especially helpful for heating and hot water tanks. However, as energy prices rise, many people are questioning if it is still a cheaper rate than a single-rate tariff or a fixed tariff.

How Does Economy 7 Work?

Economy 7 is an energy plan. It has different unit rates. These rates change based on the time of day.

• Night rate – This means you will pay less money for electricity for at least seven hours. This time is usually from midnight to 7 AM.
• Day rate – You will have higher peak rates for the rest of the day.

The exact hours for cheaper electricity can vary depending on your electricity supplier and your electricity meter. In some places, Economy 7 hours could run from 12:30 AM to 7:30 AM, or from 1 AM to 8 AM. In other areas, these times may change during British Summer Time (BST).

Current Economy 7 Electricity Rates (2025)

Typical Economy 7 Rates Under the Price Cap

The price cap is for standard variable tariffs. However, Economy 7 customers have different rates that are set by their energy provider.

• If you use 40% or more of your electricity at night, Economy 7 can help you save money.
• If you use most of your energy during the day, a single rate tariff or a fixed tariff may cost you less.

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Who Benefits Most from Economy 7?

Economy 7 is a good fit for households with:

• Storage heaters – They fill up on heat overnight at a cheaper rate. Then, they let out heat during the day.
• Electric hot water tanks – These warm up water during the night when rates are low.
• Smart meters – They give you accurate meter readings. This helps you see peak hours and night rate usage.
• EV owners – They can charge their vehicle overnight at a cheaper rate.
• Timed appliances – You can set washing machines, tumble dryers, and other heavy users of electricity to work at night.

How to Check If You’re on an Economy 7 Tariff

Look at your electricity meter:

• Economy 7 meters display either two sets of numbers or a single row of numbers that changes based on day and night usage.
• Some smart meters show “low” and “normal” rates. They allow customers to check their unit rates through an online account.

You can look at your electricity bill to find the day rate and night rate. You can also reach out to your current supplier to check this information.

Is Economy 7 Cheaper Than a Standard Variable Tariff?

The energy price cap helps keep unit rates fair. But, it does not protect customers using Economy 7 tariffs in the same way.

• Economy 7 costs less if you change 40% or more of your energy use to the night.
• If you use more electricity during the daytime hours, Economy 7 will end up costing you more.

Cost Comparison for a Typical Household

Economy 7 vs Smart Time-of-Use Tariffs: Which Is Better?

Many energy companies now use smart meters to provide Time-of-Use (TOU) tariffs. These tariffs have different electricity rates that change based on demand throughout the day. This is not the same as Economy 7, which has fixed off-peak hours. With TOU tariffs, the rates vary all day depending on the energy the grid uses.

Comparison of Economy 7 vs TOU Tariffs

Some energy companies now offer TOU tariffs. These tariffs have lower rates at night that change automatically. Economy 7 is good for people who need a constant amount of electricity at night. However, TOU tariffs may provide more ways to save money.

How Daylight Saving Time Affects Economy 7 Users

British Summer Time (BST) can be confusing for Economy 7 customers. Some electricity meters do not change automatically when the clocks change. This can cause customers to use energy during peak hours, believing they are still in off-peak hours.

How to Check If Your Economy 7 Meter Adjusts for BST

• Older Economy 7 Meters – Many older meters do not adjust for daylight saving time. If your off-peak hours are 12 AM – 7 AM during winter, they might change to 1 AM – 8 AM in summer.
• Smart Meters – Most new smart meters automatically adjust the time for daylight saving.
• Check Your Energy Bill – Your bill will show if your off-peak hours have changed.

If your electricity meter does not move, you could pay more in peak rates. This can occur for the electricity you use in the early morning hours.

How Economy 7 Works for Electric Vehicle (EV) Charging

As more people have electric vehicles (EVs), many are choosing to charge them at lower rates during off-peak times. This helps them save money. Using Economy 7 can charge an EV overnight at a good price. However, how well it works depends on how you use it.

Is Economy 7 the Best Tariff for EV Charging?

• Best for EV Owners Who Charge at Night – If you charge your EV at night, the lower night rate from Economy 7 can help you save money.
• Not Ideal for Daytime Charging – The day rate with Economy 7 is much higher than regular prices, making daytime charging expensive.

Alternative: Smart EV Tariffs – Some companies offer special EV tariffs with very low night rates, sometimes only 7p per kWh, for charging your EV.

Hidden Fees & Additional Costs with Economy 7 Tariffs

Economy 7 tariffs can save you money. But, many people often overlook some costs that are not easy to see.

Common Hidden Costs of Economy 7

• Higher Standing Charges – Economy 7 plans often come with higher standing charges. This means you will pay more every day, even if you use less energy.
• Expensive Day Rates – The daytime rate for Economy 7 can be double the night rate. This makes using electricity during the day very costly.
• Meter Upgrade Fees – If you switch from Economy 7 to a plan with one rate, you may need to change your electricity meter. Some providers may charge you for this.
• Prepayment Meters & Economy 7 – Customers using prepayment meters with Economy 7 usually pay higher unit rates than those who use Direct Debit.

Before you change to Economy 7, you should compare all the costs. Don’t only focus on the savings from the night rate.

Regional Differences in Economy 7 Tariffs

Not every Economy 7 plan has the same night rate across the UK. Electric companies set different rates based on how much it costs to deliver power to each area. Because of this, some customers pay more depending on where they live.

Economy 7 Prices by Region (2025)

Why Economy 7 Costs Vary by Region

• Grid costs – In some areas, it costs more to send energy. This changes the prices.
• Supplier competition – When there are not many energy suppliers in a place, the prices are usually higher.
• Rural vs urban pricing – People living in rural areas often pay more because it costs more to deliver energy there.

If you live in a place with a high day rate, you may want to think about choosing a single-rate plan or a special EV plan.

Switching from Economy 7: What You Need to Know

If you have an Economy 7 tariff but don’t use the night rate, you might be able to save money. Think about changing to a single rate tariff or a fixed tariff.

• Look at the type of meter you have. Some electricity meters might need an upgrade to switch.
• Compare the standing charges. Standing charges for Economy 7 can be more than the regular rates.
• Consider getting a smart meter. A new meter can help you track your energy use in real time.

Final Thoughts

Economy 7 is great for people who use electric heating, storage heaters, hot water tanks, and EVs during off-peak hours. If you use most of your energy during the day, a single rate tariff or a fixed tariff may save you money. The price cap on energy does not affect Economy 7 rates, so prices can change based on the energy supplier. It’s a good idea to check your meter and compare energy tariffs. This way, you can find the best deal.

FAQs About Economy 7 and the Energy Price Cap

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