The energy price cap is set by Ofgem. It decides the most an energy supplier can charge for gas and electricity on standard variable tariffs.
This cap helps protect households from sudden price increases. Still, many customers are now looking into
off-peak tariffs. They want to save even more on their energy bills.
By using energy when demand is low, homes can save money. This is possible because rates are cheaper during
off-peak hours. But how much can you actually save with the current energy price cap?
How Do Off-Peak Tariffs Work?
Off-peak tariffs offer lower rates for electricity at certain times of the day. This usually occurs when
fewer people are using energy, so the demand on the grid is lower. These tariffs have different unit rates
for peak electricity times, which are when demand is high, and off-peak hours, which are when demand is low.
Types of Off-Peak
Tariffs
Economy 7– Offers you seven hours of cheaper electricity, often from midnight to 7 am.
Economy 10– Gives you ten hours of lower rates, split between day and night hours.
Smart Time-of-Use (TOU) Tariffs– Adjusts energy prices based on real-time demand using
a smart meter.
Off-peak rates are great for homes with storage heaters, electric vehicles (EVs), or smart home devices.
These devices can work when the rates are lower.
How the Energy Price Cap
Affects Off-Peak Tariffs
The energy price cap applies to standard variable
tariffs. Off-peak tariffs follow different rules. Suppliers have to stick to the highest prices set
by Ofgem. However, they can change the prices for day and night in their plans.
Current Energy Price Cap (Jan–Mar
2025)
Tariff Type
Unit Rate (p/kWh)
Standing Charge (p/day)
Electricity (Standard Tariff)
24.86p
60.97p
Gas (Standard Tariff)
6.34p
31.65p
On Economy 7 tariffs, the night rate often costs 30–50% less than the peak rate. This can vary, though, based
on the energy provider you choose.
Using an off-peak tariff can help you save money on your electricity bill. But, the amount you save will
depend on your energy usage habits.
Who Benefits Most from Off-Peak
Tariffs?
Households with storage heaters can heat their homes when energy costs are lower, during off-peak hours.
They can save warmth to use during the day.
EV owners can charge their electric vehicles overnight. A cheaper rate makes this option cost-effective.
Homes with smart meters receive accurate meter readings. This enables users to change their energy
consumption patterns for better efficiency.
Users with smart home devices can set their appliances, like washing machines, dishwashers, and kettles,
to run during off-peak times with timers.
Who Might Not Benefit?
Households that use energy mostly during peak hours – If you mainly use energy in the evening, from 5 pm
to 9 pm, an off-peak tariff could cost more.
People who do not have a smart meter – Without a
smart meter, it’s tough to monitor off-peak usage. Estimated meter readings can lead to paying more than
needed.
Smart Meters and Time-of-Use (TOU)
Tariffs
Many energy providers are now using Time-of-Use (TOU) rates. They use smart meter information to create
different prices based on the time of day.
Benefits of TOU Tariffs
More Control Over Energy Use – Families can adjust their energy use to when the rates are lower.
Better Energy Efficiency – Using less energy at peak times helps reduce the strain on the grid.
Lower Carbon Footprint – This encourages a shift away from fossil fuels during times of high usage.
Smart TOU tariffs are likely to be used more often. This is especially true as the UK grid shifts towards
renewable energy sources.
Comparing Fixed Tariffs vs.
Off-Peak Tariffs
Feature
Fixed Tariff
Off-Peak Tariff
Pricing Structure
Fixed unit rate all day
Different unit rates (day/night)
Savings Potential
No savings from shifting usage
Savings if used at off-peak times
Ideal For
People who use energy anytime
Homes using storage heaters, EVs, smart meters
Smart Meter Required?
No
Yes (for smart TOU tariffs)
Volatility
Prices stay the same for the contract
Can fluctuate with grid demand
How to Switch to an Off-Peak Tariff
If you are considering an off-peak tariff, follow these steps:
Check How Much Electricity You Use – Look at your online account or smart meter to find out your usage during peak
hours and off-peak times.
Look at Different Energy Providers – Some energy providers offer lower rates for night rate usage.
Review Your Appliances – Try to run your washing machine, dishwasher, or heating during off-peak times.
This change could help you save money.
Ask for a Smart Meter – If you don’t have the option of a smart meter at home, reach out to your
supplier to ask about getting one installed.
Check Standing Charges – Some off-peak tariffs might have higher standing charges. This might affect the
savings you get.
Final Thoughts
The energy price cap is helpful for people with standard tariffs. If you want to save more, think about using
off-peak tariffs. If you have storage heaters, electric vehicles, or smart appliances at home, using energy
during off-peak hours can lower your energy bills. However, if you use most of your electricity supply
during peak times, a fixed tariff may be a better choice for you.
Using a smart meter can help you understand your energy consumption patterns. This knowledge, along with
choosing the right energy provider, may show if an off-peak tariff is a good option for your home.
FAQs About Off-Peak
Tariffs and the Energy Price Cap
What
time is off-peak electricity in the UK?
Most Economy 7 plans run from midnight to 7 am. But, the specific off-peak hours can change based
on the energy supplier.
Do off-peak
tariffs include gas?
Off-peak rates are only for electricity supply. For gas, you will pay either a fixed tariff or a
variable tariff rate.
Can a
smart meter help with off-peak tariffs?
A smart meter monitors your energy use as it happens. This means you get billed accurately for
your day rate and night rate usage. It also displays the energy consumption patterns in your
home.
Is Economy 7 still worth it under the
energy price cap?
It depends on how much energy use you move to off-peak hours. Homes with storage heaters and
electric vehicles will benefit the most from this change.
How
much can I save with an off-peak tariff?
You can save money by how and when you use your appliances. A normal household can save between
£100 and £300 each year. This is better for homes that use more than 40% of their electricity
during off-peak hours.
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