Time-of-Use Electricity Tariffs Explained

A time-of-use tariff charges different prices for electricity depending on when you use it. The official definition is simple: it is "a plan where the price of a unit of energy varies during a 24 hour period"¹. Rates are usually cheaper when demand is low, typically overnight, and more expensive when demand is high, such as the early evening². In exchange for shifting your use into the cheap windows, you pay a higher price for anything you use in the peak³.

Two broad families exist. Static time-of-use tariffs offer "the same prices at the same times each day"¹, and this is the shape of the long-standing Economy 7 and Economy 10 products. Dynamic time-of-use tariffs go further: the times and rates "typically change from day to day"⁴, following the real balance of supply and demand on the grid. Both need a smart meter, and the newer flexible products need one that communicates with your supplier every half hour².

A single unit rate that shifts across the day

The core idea is that electricity is not equally expensive to supply at all hours. National demand is low overnight and high in the early evening, and a time-of-use tariff passes that difference through to your bill. Energy Saving Trust describes it as a tariff that "charges you different rates depending on the time of day", with cheaper units when demand is low, usually overnight, and dearer units when demand is high². The same principle underpins the whole family of products: Economy 7, Economy 10, EV charging tariffs with a cheaper overnight window, and dynamic half-hourly tariffs where the price follows the day-ahead market⁶.

The distinction that matters most when comparing products is static versus dynamic. With static tariffs, "the same prices are offered at the same times each day"¹: you know exactly when the cheap hours fall, and they do not move. With a dynamic tariff, "the times and rates can change from day to day"⁴, which suits households that can respond, for instance by charging a car or a battery when the price dips. Smart Energy GB notes that Economy 7 and Economy 10 use fixed cheaper periods, "while newer EV and tracker tariffs can be more dynamic and usually work best with a smart meter"⁶.

Time-of-use tariffs alter the price of your gas and electricity depending on the time you use them⁷, though in practice the products on sale are overwhelmingly electricity-only, because that is where the daily demand shape is strongest. The trade is always the same: a lower rate in the cheap window, balanced by a higher rate outside it. Energy Saving Trust states plainly that "a time of use tariff will charge you a higher price for any electricity used in this period" when demand is high³. Whether the overall bill falls depends on how much of your use you can move, which is covered later in this page.

How your usage is recorded and charged by the hour

None of this works with a meter that only records a running total. Time-of-use tariffs use your smart meter to log electricity use, "and charge you different rates during different time windows"⁸. The meter records energy use in half-hour periods, which is what enables a supplier to bill the overnight units at one rate and the evening units at another⁹.

The data your smart meter sends has three stated uses: to bill you for the energy you use, to offer you new products and services such as new tariffs where you have given permission, and to help make the energy system more efficient by recording demand more accurately¹⁰. Billing is the one that touches you directly: smart meters enable accurate billing, "based on actual rather than estimated usage", because energy use is automatically recorded in half-hour periods⁹.

For a time-of-use tariff specifically, the meter has to be set up in the right way. Which? notes that "your smart meter will need to be set up to provide automatic meter readings every 30 minutes, so that your provider can" bill you correctly across the rate windows¹¹. A smart meter that only sends monthly readings can still support a traditional dual-rate tariff, but the flexible products depend on the half-hourly setting. If you have had a smart meter for a while, you can usually download your own half-hourly usage data from your supplier or your online account, which is the raw material for working out whether a time-of-use tariff would actually save you money².

The half-hourly meter your supplier provides at no cost

The meter requirement is not a technicality; it is the entry condition for the whole market. To sign up to a time-of-use tariff, "you'll need a smart meter"³, and for the newer flexible products the requirement is stricter: "customers will need a smart meter to get all the benefits from new flexible energy tariffs"⁶, and to access any new flexible time-of-use tariff "you will need to have a smart meter that is set to send readings every half an hour"⁶. Energy Saving Trust puts it the same way: smart time-of-use tariffs need a smart meter that communicates with your supplier every half hour².

The frequency matters because it defines which products are open to you. Automatic meter readings can provide your supplier with "monthly, weekly, daily, or even half-hourly readings"¹², and the half-hourly end of that range is what the dynamic tariffs are built on. Half-hourly readings mean your smart meter sends a reading to your supplier every 30 minutes⁴. The same requirement appears in official guidance on EV tariffs: "for many EV-specific tariffs, particularly smart or time-of-use tariffs, you will need a working smart meter"¹³.

The cost is not a barrier. You can get a smart meter installed by your energy supplier at no extra cost¹², and Ofgem's consumer guidance is to "contact your supplier to get a smart meter for free"⁵. Getting a smart meter installed is free for UK energy customers¹⁴. What the meter then unlocks is access to more flexible tariffs, including dual-rate tariffs¹⁰, which is the door time-of-use pricing sits behind.

Seven hours of cheaper overnight power with Economy 7

Economy 7 is the oldest and best-known time-of-use tariff, and it is static in the fullest sense: the cheap window never moves. It gives seven hours of cheaper electricity overnight¹¹, on a tariff structure with two set energy prices, an on-peak rate and an off-peak rate, with the cheaper off-peak rate applying for 7 hours out of every 24, usually at night⁶. Confused.com describes it the same way: Economy 7 tariffs "offer a low-cost rate for electricity for 7 hours each night"⁷.

The product was designed around storage heaters, which charge up on the cheap overnight rate and release heat through the day, and around hot water heated overnight. Because the cheap hours are fixed, the household does not need to think about the price from day to day: the heating and hot water simply run on the night rate. The trade-off is the day rate, which is higher than a standard single-rate tariff's, so a home that uses most of its electricity during the day can end up paying more overall.

The exact overnight window varies by supplier and by region, so treat the timing as something to confirm with your own supplier rather than a national standard. What is consistent is the shape: seven cheap hours, usually at night, and a dearer rate for the other seventeen. If you already have an Economy 7 meter, you are already on a time-of-use tariff, whether or not anyone has ever used that phrase with you. More detail on the rates, the night hours and who the tariff suits is on our Economy 7 tariffs page.

Economy 10: three discounted periods, but few suppliers offer it

Economy 10 takes the same idea and spreads it across the day. It offers much cheaper usage rates during 10 off-peak hours of the day¹⁵, split into 7 hours during the night and 3 hours during the day, which will most likely be sometime in the afternoon or evening¹⁵. Which? describes it as 10 hours of cheaper electricity, "usually in three time periods throughout the day"¹¹.

The attraction is the daytime boost. Three cheap hours in the afternoon or evening let a household run a washing machine, a dishwasher or an immersion heater at a low rate without waiting until midnight. During the off-peak hours, the price of electricity could fall by up to half of the average rate¹⁵.

The catch is the meter. Economy 7 and Economy 10 are older time-of-use tariffs that rely on having a specific type of electricity meter that works for those tariffs⁶, so an Economy 10 customer needs a dedicated Economy 10 meter rather than a standard smart meter configuration. That makes it a niche product: fewer suppliers offer it, and it is not the sort of thing you stumble onto. The exact cheap windows also vary by region and supplier, so the timing is something your supplier must confirm for your own meter point.

For most households considering time-of-use pricing today, the modern smart-meter-based products have largely taken the place Economy 10 once held, because a smart meter can bill any window a supplier cares to define. Our Economy 10 and restricted meter tariffs page covers the product in more depth.

The limits of time-of-use tariffs: kit, switching and availability

The limitations are worth stating as firmly as the benefits, because the downside is real and well documented.

• The meter is the gatekeeper. Without a smart meter set to half-hourly readings, the flexible time-of-use products are simply unavailable⁶.
• Savings are not guaranteed. Ofgem's 2025 research found consumers citing "a lack of guaranteed savings, inertia and limited knowledge" as reasons for not switching to these tariffs¹⁶.
• Bad alignment raises bills. Official guidance on heat pumps is blunt: "where heating patterns are not well aligned to the tariff, time-of-use tariffs can increase fuel bills"¹⁷.
• Peak-heavy homes lose out. If you use most of your energy during peak times and cannot shift it, "it could even cost a little more", and the tariff is probably not for you².
• Coverage is patchy. You will not typically find time-of-use tariffs on price comparison websites, so you need to check energy providers' websites directly¹¹.
• Some tariffs need equipment. Some are only available if you have certain equipment installed, such as an EV charger or solar panels³.

The contract terms deserve a read before signing. Energy Saving Trust advises households to understand the terms of the contract, including any early termination fees or contract duration³, and to ask about flexibility in the tariff, "such as the ability to switch between tariffs or opt-out of time of use pricing"³. When comparing, the factors that matter are the off-peak rates and times, the peak rates, which are important if you cannot shift much of your energy use, and any standing charges or exit fees². Our pages on exit fees and contract terms and comparing energy tariffs go through these in detail.

Where time-of-use tariffs shine is in homes with flexible demand: official guidance highlights that they especially suit households with green tech "such as a heat pump, battery storage or an electric or hybrid car"⁸. A home that can charge a car, a battery or a hot water cylinder overnight is in a completely different position from one whose demand sits in the evening peak.

Installation, costs and whether you can say no to a smart meter

The practical route to a smart meter runs through your energy supplier, which installs it at no extra cost¹⁸. Ofgem's guidance repeats the point: contact your supplier to get a smart meter for free⁵, and getting one installed is free for UK energy customers¹⁴. There is no charge for the meter, the installation or the in-home display that comes with it.

The installation itself is arranged with your supplier, and the meter then sends its readings automatically via the DCC's secure network to your energy supplier¹⁹. Once it is in, the in-home display shows you how much energy you are using during the day⁵, which is the tool most households use to work out where their use actually falls.

On compulsion, the position is clear. Smart meters are not compulsory, and the government's own statement of your rights and expectations is the reference document for what a supplier may and may not do in offering one⁹. Suppliers are working to a deadline to offer smart meters to all households and small businesses by the end of 2030, but that is a duty on them to make the offer, not a duty on you to accept. The consequence of refusing is practical rather than legal: without a smart meter, the time-of-use market described on this page stays closed.

Two special cases are worth naming. If you have solar panels, a smart meter works alongside them and your generation payments will not be affected²⁰. If you are on prepayment, a smart meter in prepayment mode lets you add credit automatically or without having to visit a shop¹⁰, and smart prepayment meters can usually be topped up online or using your supplier's mobile app²¹.

Dealing with faults, lost connections and estimated bills

Smart meters are reliable, but they are not infallible, and the failure modes are defined in official guidance. Your smart meter "may stop recording the energy you use, or may no longer send readings to your supplier"²². When that happens, the automatic billing that time-of-use tariffs depend on stops with it, and you may need to take meter readings manually and submit them to your supplier instead²³.

Switching supplier is the other common point of failure. You can switch suppliers if you have a smart meter, but your new supplier might not offer all the smart meter services, such as remote meter readings, and the meter may need replacing²⁴. The position has improved with the newer meters: SMETS2 meters are cross-compatible, meaning "a smart meter will keep its smart functions across all energy suppliers" using the purpose-built national network, and they are now the meter type for any new smart meter installation²⁵. Even where smart mode is lost, "your meter may work in smart mode again if you change tariffs or suppliers"²³. The Energy Ombudsman handles complaints about smart meters where a supplier has not resolved them²⁵.

If your supplier goes out of business, the protections are the same as for any tariff: Ofgem's process moves you to a new supplier, and your meter goes with the home²³. For billing problems, Ofgem's list of issues to take to your supplier includes late, incorrect or missing bills, back billing, being overcharged, a faulty meter, poor customer service, and refusing to refund credit from your account²⁶. If you are transferred to a supplier in error, all energy suppliers must follow the Erroneous Transfer Customer Charter, and "you could get compensation if this happens to you"²⁷.

Your readings, privacy and who sees your data

A meter that reports every half hour is a data device, and it is fair to ask who sees what. The readings travel over the DCC's secure network to your energy supplier¹⁹, and the stated uses of that data are limited: to bill you for the energy you use, to offer you new products and services such as new tariffs where you have given permission for this to happen, and to help make the energy system more efficient by recording demand more accurately¹⁰.

The permission point matters. New tariffs are only offered on the back of your data if you have said yes¹⁰, and the government's rights and expectations document sets out what suppliers must tell you and what choices you have⁹. The half-hourly record is also yours to inspect: if you have had a smart meter for a while, you can usually download your half-hourly usage data from your supplier or your online account².

There is a transparency norm in the wider reporting system too. Ofgem's Feed-in Tariff annual report notes that "a spreadsheet containing the data used in the production of this report is published alongside the report on our website"²⁸, which reflects the general expectation that official energy data is published, not held privately. For most households the practical position is simple: the meter's data is used to bill you accurately and, with your consent, to tell you about tariffs it suggests you might suit. If that consent position ever changes, it is a matter for your supplier and for Ofgem's complaint process²⁶.

Smart meters and your freedom to manage your own energy

A smart meter does not generate electricity, and it is worth being clear about that. What it does is give the household information and access. Ofgem's own performance reporting lists the benefits of meters operating in smart mode as "providing real-time information on your energy usage, enabling more accurate bills, giving you access to more flexible tariffs"²⁹. The DCC makes the same point about control: the data provided by your smart meter "puts you in control of your energy usage, meaning you can take energy-saving steps"³⁰, and the industry's announcements to households promise "greater control of their energy use and access to the most appropriate tariffs"³¹, along with automatic meter readings, access to the widest range of tariffs and a better understanding of their energy usage³².

For a household working towards energy independence, the smart meter is the piece of infrastructure that lets the rest of the toolkit pay off. A home with solar panels and a battery, or a heat pump, or an electric car, can only monetise its flexibility through a tariff that knows when it uses power, and that tariff needs the half-hourly meter². Time-of-use tariffs reward exactly the behaviour a self-sustaining home is built around: generating, storing and consuming on your own schedule rather than the grid's peak.

The dependence that remains is real, and it should be stated. Except by switching, "you don't control the tariff your energy supplier sets", though you can change how much energy you use¹⁹. The rates, the windows and the products are the supplier's to define, the meter's communications run over a national network you do not own, and the data flows to your supplier rather than staying in the home. A time-of-use tariff shifts when you pay, not whether you depend on the grid. The deeper reduction in dependence comes from the generation and storage side, covered in our tariffs and energy independence guide, and from the export payments described in our Smart Export Guarantee pages.