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Economy 7

What is Economy 7?

Economy 7 is a special type of energy tariff which could be a cheaper option, or cost more depending on your lifestyle

By Lucy Hancock

Published: 22 December 2020

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What is Economy 7?

Economy 7, otherwise known as ‘differential’ or ‘multi-tariff rate’, is a type of energy tariff that can work out as a cheaper alternative, depending on your lifestyle and energy habits.

It offers cheaper electricity at night, but a higher rate during the day. You’ll often get cheaper rates between midnight and 7am, but specific hours can vary by supplier so make sure you check!

If you use more energy after midnight, you could save money by switching to an Economy 7 tariff. But it may not suit you most of your household energy is used during the day, as you’ll be charged more on the higher rate.

How does an Economy 7 tariff work?

Economy 7 tariffs are often a cheaper energy option than other price plans because you’ll commit to using most of your energy at night. This means you can get a good discount for the units you use during the off-peak hours.

They are best suited to people with storage heaters and a hot water tank, as these can be heated up at night when it’s cheapest and then used to provide hot water and heating for the next day.

A lot of modern appliances also include a timer, so you can set your washing machine and dishwasher to run during the off-peak window.

It’s called an Economy 7 tariff because the off-peak window is usually a seven-hour period, usually between midnight and 7am – but this can vary depending on your provider, location and the time of year.

Do keep in mind that if you’re not using much energy at night, an Economy 7 tariff can mean you’re paying more money for your energy than you would on a standard tariff.

How do I know if I’m on Economy 7?

You may not have realised you’re on an Economy 7 tariff, so you might be left wondering why your bills seem high – especially if you use most of your electricity during the day. You can check if you’re on an Economy 7 tariff by taking a look at your bill.

You bill will have separate readings for ‘electricity – day’ and ‘electricity – night’ if you’re on Economy 7. You’ll also see a Meter Point Administration Number. If the first number on the top line is 02, it’s likely that you’re on an Economy 7 tariff.

Confused about how your bill looks? It’s best to give your provider a call. They’ll be able to talk you through your bill and give you the information you need.

What are Economy 7 hours?

Economy 7 hours may vary depending on your energy provider, but they typically fall in a 7-hour window between 10pm and 8:30am. This time window can vary across the country.

British Summer Time may affect Economy 7 hours, as well as the type of meter you have. To check what your exact Economy 7 hours are, take a look at your meter or ask your energy supplier to confirm.

Can I save money with Economy 7?

You can save money with Economy 7 depending on your lifestyle. Here’s our list of pros and cons with switching to Economy 7:

Pros

Can be a cheaper energy option:  By shifting more of your energy usage to the off-peak period, you could save a good amount of money without even realising. Setting your appliances to run at night will make them much cheaper. By investing in a storage heater or hot water tank, you can heat the water you need for the following day, overnight

Ideal for electric cars: If you drive an electric car, it may work for you to charge it during the night. Economy 7 gives you cheaper rates during off-peak hours, so charging your vehicle at night could save you a good amount of money

Cons

Storage heaters can leave you feeling cold: You may find that heating water and storage heaters during the night doesn’t give you enough warmth to last a full day. This could leave your house feeling cold in the evenings, and an expensive bill if you need to turn the electricity on outside off-peak hours. Prefer a long bath in the evenings rather than a shower first thing in the morning? The Economy 7 tariff may not suit you

Could end up paying more: If you’re not suited to an Economy 7 tariff, you could end up paying much more for your energy overall than you would on another deal. Using too much energy during peak hours will quickly become expensive and could cancel out the savings you make at night. It’s only a cheaper option if you can be strict with yourself. Installing timers on your appliances so you don’t use them during the day is a good solution to avoid an expensive and unexpected bill!

How do I switch to or from an Economy 7 meter?

Energy companies aren’t pushing Economy 7 tariffs as much as they used to, but you can still ask to move onto one. This will involve having a new, special meter installed – there may be a small fee for your meter installation, but many providers will offer it free of charge.

Before you have your meter installed, it’s a good idea to check if you’ll need to pay to switch back, just in case you decide Economy 7 isn’t the best option for you.

If you’re already on an Economy 7 tariff and it doesn’t suit your energy use, then you may want to consider switching to a different energy provider. Most providers won’t charge for you to change your meter back and if they do, you don’t have to stick with that provider! Why not compare energy tariffs for your home by using our price comparison page?

Do bear in mind that your provider may automatically switch you to a standard tariff when you make the move, so it’s a good idea to compare deals so you aren’t paying more than you need to.

What are the alternatives to Economy 7?

Economy 7 not the right option for you? There are is an alternative that works in a similar way. Some providers offer an Economy 10 tariff. This gives you a longer discounted period, including daytime hours, which may work better for a busy household.

Economy 10 deals usually offer you an off-peak rate at several points throughout the day, rather than Economy 7 offering you seven solid hours. So, you might get cheaper energy between midday and 3pm, again between 5pm and 7pm and again between midnight and 5am.

How can I make Economy 7 work for me?

If you’ve opted for an Economy 7 tariff and want to get the best possible savings from it, you’ll need to be smart with your energy use. Here’s our top tips for how to make Economy 7 work for you:

  • Check which hours are discounted: Discounted hours can vary from supplier to supplier, so make sure you know exactly when energy is cheap, and when it’ll be more expensive
  • Keep an eye on the clocks changing: Be careful when the clocks change so you don’t run all your appliances an hour too soon
  • Charge your gadgets at the right time: Charging up your gadgets at night and installing timers to your appliances like washing machines will ensure they’re only using energy when it’s cheaper. The only exception is tumble dryers, which fire fighters warn can be a fire risk if left to run unattended
  • Invest in a smart meter: Ask your energy company if they can issue you with one, as a smart meter will let you see how much power you’re using at any one time, helping you adjust your usage to fit your discounted deal

Are storage heaters expensive to run?

Storage heaters are commonly used with an Economy 7 tariff, but may be expensive to run if you’re not careful.

A big factor is storage heaters are powered by electricity, not gas, which is often more expensive.

If you're using it during the day, most of the stored heat will be released by the evening which may not ideal for cold winters.

If your storage heater releases most of its heat by the evening, it may leave you paying more for your heating during the evening when you need it, especially if you’re on an Economy 7 tariff.

Can I have a smart meter with Economy 7?

You may be able to have a smart meter with Economy 7, as some energy suppliers are starting to offer smart meters that can juggle two tariffs. This could be useful as you’ll be able to see which tariff you’re using and how much energy you’ve used under each.

Not all Economy 7 providers will offer a smart meter, so make sure you check with your energy provider and get all the details before you accept a smart meter.

Does Economy 7 still exist?

Economy 7 does still exist and can be one of the cheapest ways to save on your energy. Ideal for those who don’t need electricity during the day (if you have a storage heater and hot water tank), Economy 7 can be the cheapest energy option depending on your lifestyle.

How much do storage heaters cost for Economy 7?

Storage heaters differ in price depending on the brand you choose and what type you need. The more efficient your storage heater is, the less it’ll cost to run.

With an Economy 7 tariff, you’ll save on your energy at night-time and be charged a lot more to use it during the day. This is why having a storage heater if you’re on Economy 7 is a good option – you can draw electricity over a few hours at night and store it for when you need it.

Should you turn storage heaters off during the day?

Storage heaters are designed to store up heat during the night, for you to use the following day. You should turn your storage heater off during the day when you don’t need electricity, especially if you’re on an Economy 7 tariff.

Economy 7 is a cheaper option for electricity if you use your electricity at night, to store heat in your storage heater for the next day. By turning off your storage heater during the day and only using it when you need to, you can save the heating for the evening when it’s colder – especially during the winter.

What time of day is cheapest to use electricity?

The cheapest time of day to use electricity (known as off-peak) tends to be between 10pm and 8am, when less people use electricity. This is ideal if you’re on an Economy 7 tariff, as you’ll be charged a lower rate for using electricity during the night. Just remember if you use your electricity outside your 7 hour window, you’ll be charged a lot more money.

Why is economy 7 so expensive?

Depending on your lifestyle, Economy 7 can work out more expensive. If you can use most or all of your electricity at night, rather than during the day, Economy 7 can be one of the cheapest electricity tariffs. If you forget, or need to use your electricity during the day, your rate will be higher than normal (to balance out the off-peak price), so can be expensive if you’re not careful.

It’s important to check the ins and outs of your Economy 7 tariff before switching, including which seven hours of the day the cheaper rate will be apply.

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