Time-of-Use Electricity Tariffs Explained

A time-of-use tariff is an electricity plan where the price of a unit of energy varies during a 24 hour period¹. When demand on the grid is low, usually overnight, the unit rate is cheaper; when demand is high, typically in the early evening, it is more expensive². A household that can move washing, water heating, car charging or battery charging into the cheap hours pays less for those units, and one that cannot may pay more.

There are two broad families. The older, fixed-window tariffs are Economy 7, which gives cheaper prices for 7 hours during the night, usually between midnight and 7 am³, and Economy 10, which gives 10 set cheaper hours split across the afternoon, evening and night⁴. The newer smart time-of-use tariffs need a smart meter⁵, which sends a reading to the supplier every 30 minutes so each half hour can be priced separately⁶.

The smart meter itself is free from the supplier⁷ and is not compulsory⁸. What a time-of-use tariff does for a household's energy independence is limited but real: it rewards control over when electricity is drawn from the grid. It does not reduce dependence on the grid, on a supplier, or on the supplier's willingness to keep offering the tariff.

One price per unit, changing through the day

Every time-of-use tariff shares one principle: the price of a unit of electricity depends on when it is used. Official guidance describes the usual shape as prices that vary through the day with a cheaper overnight window⁹, and the purpose is to encourage households to shift use to periods of lower demand and lower prices¹⁰. Some tariffs vary the price on different days as well as at different times¹¹, and a few tariffs apply the same idea to gas as well as electricity¹².

Within that principle the tariffs sort into two kinds.

Static tariffs give fixed rates through the day, cheaper off-peak and higher at peak¹³, which makes planning straightforward: the cheap window is always in the same place. Dynamic tariffs move with conditions on the grid, so the cheap periods shift and a household has to watch prices or let automated kit respond. Energy Saving Trust notes that on dynamic tariffs times and rates typically change from day to day⁵. The mechanics of those are covered in agile and dynamic tariffs and the related tracker tariffs, which link price to the wholesale market over a whole day rather than by the half hour.

The flip side of a cheap window is a dear one. A time-of-use tariff charges a higher price for electricity used in peak periods⁵, so the comparison with a single-rate tariff depends entirely on the share of use a household can place off-peak. That is why the same tariff can cut one home's bill and raise its neighbour's. For how these tariffs sit among fixed, tracker and export deals, see the full guide to energy tariffs.

The smart meter logs use and bills by time window

On a modern tariff the smart meter does the work. Welsh Government guidance puts it simply: these tariffs use the smart meter to log electricity use and charge different rates during different time windows¹⁴. The government's statement of consumer rights adds that smart meters enable accurate billing by automatically recording energy use in half-hour periods¹⁵.

The sequence runs like this:

1. The meter records electricity use continuously and stores it in half-hour blocks.
2. Readings are sent automatically to the supplier, so the householder does not submit them⁷.
3. The supplier matches each block to the tariff's rate for that time window.
4. The bill is built from actual readings rather than estimates⁷.

The same data has other uses. The supplier uses it to bill, and the network operator uses it to carry out essential tasks¹⁶. Ofgem lists three uses: billing, offering new products and services such as new tariffs (where the customer has given permission), and helping make the energy system more efficient by recording demand more accurately¹⁷. National Energy Action describes the practical result as an accurate bill based on how much energy has actually been used¹⁸.

Inside the home, the in-home display shows how much electricity and gas is being used in near-real time and what it is costing at the household's unit rates¹⁹. Which? lists further monitor functions: historical use, setting a budget, showing meter readings and showing tariff information¹⁶. On a time-of-use tariff that display is the easiest way to see whether heavy loads really are landing in the cheap window. Practical ways to do that are covered in shifting electricity use to cheap rates.

The meter you need: half-hourly readings, free from your supplier

Smart time-of-use tariffs use half-hourly smart meter readings to let companies charge lower rates when demand is lower and electricity is cheaper²⁰. A smart meter can send readings half-hourly, daily or, in some cases, monthly¹¹; the Data Communications Company, which runs the national network, lists monthly, weekly, daily or even half-hourly readings²¹. For a smart time-of-use tariff only the half-hourly setting will do: Energy Saving Trust states these tariffs need a smart meter that communicates with the supplier every half hour².

For gas, the meter records every half hour; for electricity, it records in near-real time²². Citizens Advice notes that choosing half-hourly readings may give access to some new tariffs²³, and Smart Energy GB states that customers need a smart meter to get all the benefits from new flexible energy tariffs²⁴. The same requirement appears across guidance for each nation: Home Energy Scotland says smart time-of-use tariffs also require a smart meter²⁵, the Energy Ombudsman says many EV-specific tariffs need a working smart meter⁹, and Ofgem's ECO4 guidance describes smart technologies combined with a time-of-use tariff and used with a functioning electricity smart meter²⁶.

A household that has had a smart meter for a while can usually download its half-hourly usage data from the supplier or its online account². That history is the most reliable basis for judging whether a time-of-use tariff would suit, because it shows how much use already falls in off-peak hours.

The meter is free: Ofgem's instruction is to contact the supplier to get one⁷. The requirement is covered in more detail in whether a smart meter is needed for an EV or heat pump tariff and which tariffs your meter allows.

Economy 7: seven overnight hours at a cheaper rate

Economy 7 is the most familiar static time-of-use tariff: cheaper electricity for seven hours overnight². It has two set prices, an on-peak rate and an off-peak rate, with the cheaper rate applying for 7 hours out of every 24, usually at night²⁴. The cheap window usually runs between midnight and 7 am³, though exact times vary by area and meter.

Economy 7 depends on hardware. Smart Energy GB describes Economy 7 and Economy 10 as older tariffs that need compatible meters²⁴, and a specific Economy 7 meter records peak and off-peak use separately and is only compatible with Economy 7 tariffs²⁷. If a home does not already have an Economy 7 meter, the chosen supplier has to install one³. Two-rate readings on digital and prepayment Economy 7 meters are usually reached by pressing a button on the meter, sometimes marked Rate 1 and Rate 2²⁸. A bill that shows different day and night rates, or a tariff named Economy 7 or Economy 10, is another sign of such a set-up²⁹.

The tariff was built around storage heaters, which charge overnight and release heat through the day. Which? states that storage heaters need a time-of-use tariff such as Economy 7 or Economy 10 to access cheaper electricity prices³⁰. More on that pairing is in Economy 7 and storage heaters, and full rates and hours are covered in Economy 7 tariffs. A smart meter can also run an Economy 7 tariff; see Economy 7 with a smart meter.

For independence, Economy 7 is a fixed arrangement: the household knows its cheap hours in advance but cannot move them, and the value depends on having loads, such as storage heaters or a hot water cylinder, that can be timed into the night.

Economy 10: three cheaper windows, but a niche market

Economy 10 extends the idea to 10 cheaper hours, usually in three time periods through the day³¹. National Energy Action gives one common split: three hours in the afternoon, two in the evening and five through the night⁴. Energy Helpline describes a different pattern, 7 hours during the night and 3 during the day, most likely in the afternoon or evening³². Both describe the same 10-hour total; the split depends on the region and the meter.

Energy Helpline states that during the off-peak hours the price of electricity could fall by up to half of the average rate³². That is a general description rather than a published rate for any particular tariff, and actual rates vary by supplier and region.

The limit is availability. National Energy Action says Economy 10 is not as widely used as Economy 7 and that not all suppliers offer tariffs that support it⁴. Which? adds that Economy 10 gives 10 hours of cheaper electricity usually in three blocks³³, which suits homes whose heating or hot water can recharge in the afternoon as well as overnight. Some Economy 10 homes use meters controlled by the radio teleswitch service, discussed below³⁴. More detail is in Economy 10 and restricted meter tariffs and the side-by-side Economy 7 vs Economy 10.

Where time-of-use tariffs fall short: meters, switching and coverage

The evidence on these tariffs is mixed, and the limits are as important as the savings.

Bills can go up. The Centre for Sustainable Energy warns that households using most of their energy at peak times, and unable to move it, could see higher bills¹³. Energy Saving Trust says in that case it could even cost a little more, so a time-of-use tariff probably is not suitable². A government report on the heat pump transition found that where heating patterns are not well aligned to the tariff, time-of-use tariffs can increase fuel bills³⁵.

Take-up is held back. Ofgem's tracking research from June 2025 found consumers citing a lack of guaranteed savings, inertia and limited knowledge as reasons for not switching³⁶.

The old tariffs are shrinking. Which? reports that Economy 7 and Economy 10 are becoming less common as the legacy meters that support them are phased out²⁰. At the same time a wider variety of time-of-use tariffs is appearing now that most British consumers have smart meters²⁷.

They are hard to compare. Which? notes that time-of-use tariffs are not typically found on price comparison websites, so suppliers' own sites have to be checked³¹. Energy Saving Trust lists the points that decide whether a tariff pays: off-peak rates and times, peak rates, and any standing charges or exit fees², and it advises checking early termination fees, contract length, and any ability to switch tariffs or opt out of time-of-use pricing⁵.

Some are restricted by equipment. Some tariffs are only available with certain equipment installed, such as an EV charger or solar panels⁵. Welsh Government guidance says these tariffs especially suit homes with a heat pump, battery storage or an electric or hybrid car¹⁴. See EV tariffs, heat pump tariffs and a home battery with time-of-use.

Switching can break the smart link. Having a smart meter does not stop a household switching²³, and SMETS2 meters keep their smart functions across all suppliers through the national network; they are now the meter type for any new installation³⁷. Trading standards guidance still warns that a new supplier might not offer all smart meter services, such as remote readings, and the meter may need replacing³⁸. Which? states smart meters should make switching quicker, since they can send information to a new supplier instantly³⁹.

Getting a smart meter: who installs it, cost and your right to refuse

Smart meters are installed by the household's energy supplier at no extra cost²¹. The Data Communications Company states installation is free for UK energy customers⁴⁰, and Confused.com notes there may be a wait for an appointment but it should not cost anything²⁸. Ofgem's guidance is to contact the supplier to get one for free⁴¹.

A smart meter is not compulsory. Energy Saving Trust states:

That right has a cost in tariff choice. Smart Energy GB states that access to any new flexible time-of-use tariff needs a smart meter set to send readings every half hour²⁴, so a household that refuses keeps only legacy options where a compatible meter already exists.

The practical steps:

• Contact the current supplier, which installs the meter.
• At or after installation, choose the half-hourly reading setting if a smart time-of-use tariff is intended²³.
• Keep the in-home display, which shows energy use through the day⁴¹.

Supplier rules and consumer protections around installation are covered in tariff rules and consumer protections. Arrangements in Northern Ireland differ from Great Britain; see tariffs in Northern Ireland.

What happens when things go wrong: faults, lost connections and estimated bills

A time-of-use tariff only works if the meter keeps recording and reporting. Ofgem warns that a smart meter may stop recording energy use or may no longer send readings to the supplier⁷. When readings stop, the supplier cannot price each half hour, and billing can fall back to estimates.

Changing supplier is a common trigger. Ofgem states that a meter may not work in smart mode after moving to a new supplier, and the householder may need to take manual readings and submit them instead; it may work in smart mode again after a later change of tariff or supplier⁴².

Legacy meters face a harder deadline. The radio teleswitch service switches many older meters between rates and turns heating on and off. National Energy Action warns that if these meters are not upgraded, heating or hot water could be left continually on or off, charging could happen at the wrong time of day, and the supplier cannot confirm peak or off-peak use, which could mean higher bills³⁴.

Ofgem lists the problems to take first to the supplier: late, incorrect or missing bills; back billing; being overcharged; a faulty meter; poor customer service; and refusing to refund credit from an account⁴³. The same list appears in its guidance on complaints about suppliers and network operators⁴⁴. If a household is switched to a supplier in error, all suppliers must follow the Erroneous Transfer Customer Charter, and compensation may be payable⁴⁵.

Data, privacy and how your readings are shared

Readings from a smart meter are sent automatically via the Data Communications Company's secure network to the energy supplier⁴⁶. That data is used for three purposes set out by Ofgem: billing, offering new products and services such as new tariffs where the customer has given permission, and helping make the energy system more efficient by recording demand more accurately¹⁷. Which? adds that the network operator also uses it to carry out essential tasks¹⁶.

The half-hourly setting is the one that matters for time-of-use pricing. Citizens Advice frames it as a choice: choosing half-hourly readings might give access to some new tariffs²³. The consequence runs both ways: finer data unlocks the tariffs, and a household that prefers less frequent reporting gives up access to them.

The data is also the householder's to use. A household with a smart meter can usually download its half-hourly usage from the supplier or its online account², and the in-home display shows historical use and tariff information¹⁶. The Data Communications Company describes the result as ensuring the household only pays for the energy it has used, not the approximate costs of an estimated bill⁴⁶.

What owning a smart meter means for your energy independence

Ofgem lists the benefits of meters operating in smart mode as real-time information on energy use, more accurate bills, and access to more flexible tariffs⁴⁷. The Data Communications Company describes greater control of energy use and access to the most appropriate tariffs⁴⁸, and elsewhere automatic readings, access to the widest range of tariffs and a better understanding of energy use⁴⁹. Smart Energy GB points to tariffs and schemes that offer rewards or cheaper rates for off-peak use⁵⁰, and Welsh Government guidance adds incentives for using energy on high-supply days⁵¹. Which? notes these tariffs particularly benefit plug-in electric and hybrid vehicle owners³⁹. The decarbonisation case is that the data puts a household in control of its use so it can cut CO2 emissions⁵².

For independence, the picture has clear limits:

• Still grid-dependent. A time-of-use tariff changes the price of grid electricity; it does not replace it. Only generation or storage in the home does that, and those pair with time-of-use through solar and battery import tariffs.
• Still supplier-dependent. The Data Communications Company is plain: except by switching, a household does not control the tariff its supplier sets⁴⁶.
• Network-dependent. The meter's smart functions run over a national network, and faults or supplier changes can interrupt them⁷.
• Solar-compatible. For Feed-in Tariff generators, Ofgem states generation payments will not be affected by a smart meter⁵³.

Prepayment households keep options too. Smart prepayment meters may be topped up online or through the supplier's app⁵⁴, and in England cash top-ups can be made at a Post Office, Payzone or any shop with a PayPoint logo, with credit that should be added immediately⁵⁵. See prepayment and pay as you go tariffs and the wider view in tariffs and energy independence.