Energy Price Cap & Off-Peak Tariffs: Can You Save More?

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)

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.

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Can Off-Peak Tariffs Save You Money?

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

How to Switch to an Off-Peak Tariff

If you are considering an off-peak tariff, follow these steps:

1. 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.
2. Look at Different Energy Providers – Some energy providers offer lower rates for night rate usage.
3. Review Your Appliances – Try to run your washing machine, dishwasher, or heating during off-peak times. This change could help you save money.
4. 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.
5. 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

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