Using Heating Controls with Time-of-Use and Smart Tariffs

A time-of-use tariff is a plan where the price of a unit of energy varies during a 24 hour period¹. The Low Carbon Hub defines it as a pricing scheme where the cost of electricity varies at different times of the day, encouraging consumers to shift usage to periods of lower demand and lower prices². For a household with electric heating, a heat pump or a hot water cylinder, that shift is not something a person can do by hand every evening. It is a controls problem.

The controls decide whether the tariff pays. Energy Saving Trust states plainly that a time-of-use tariff charges different rates depending on the time of day, cheaper when demand is low and more expensive when demand is high, and that if most energy is used at peak times and cannot be shifted, the tariff could cost a little more³. Citizens Advice found that these tariffs require increased engagement from consumers at key points in the consumer journey, from choosing a tariff to monitoring their usage⁴. A schedule, a timer or a tariff-aware thermostat does that monitoring instead.

The stakes are real in both directions. Government research on the heat pump transition found that where heating patterns are not well aligned to the tariff, time-of-use tariffs can increase fuel bills⁵. Aligned well, they are one of the few ways a household can cut running costs without changing the fabric of the home. This page sets out the tariff structures, the controls that can chase them, and the evidence on what automation actually delivers.

What a time-of-use tariff is, and why the controls decide whether it pays

A time-of-use tariff charges different prices for energy at different times of day, or on different days¹¹. Energy Saving Trust describes smart time-of-use tariffs as a pricing structure that varies the cost of electricity based on the time of day it is used¹². The Energy Ombudsman notes that electricity prices vary throughout the day, usually with a cheaper overnight charging window¹³.

The structures fall into two families. 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 meter¹⁴. With dynamic time-of-use tariffs, energy prices can vary continually and are calculated in real-time depending on various factors¹. That difference matters for controls: a fixed window can be met by a timer, while a half-hourly price needs something that reads the price.

Smart time-of-use tariffs use half-hourly smart meter readings to allow companies to charge lower rates when demand is lower and electricity is cheaper¹⁵. A supplier cannot charge based on when energy is used unless the household chooses such a tariff¹⁶. So the tariff is a choice, and the meter is the enabling device.

What the controls add is the ability to act on the price without a person watching the clock. Smart heating controls automatically optimise heating settings to save money and energy¹⁷. Smart thermostats can be programmed, or remotely controlled, to manage a home's temperature, and can switch heating off remotely, use more sophisticated sensors to avoid temperature extremes, and heat or pre-heat certain rooms while leaving unused rooms untouched¹⁸. On a time-of-use tariff, that room-by-room control is what turns a price signal into a smaller bill.

The dependence that remains is worth naming. A tariff-aware control depends on the supplier publishing prices, on the meter reporting half-hourly, and often on a manufacturer's cloud service and app. The household gains flexibility but takes on a relationship with a supplier and a platform that a simple timer does not require.

Economy 7: seven overnight cheap hours, and who they suit

Economy 7 is a time-of-use electricity tariff that charges two different prices for the electricity used¹⁹. The cheaper off-peak rate applies for seven hours out of every 24 hours, usually at night¹⁴. Which? reports that the cheaper period usually runs between midnight and 7am, though this varies across suppliers⁸. Energy Helpline puts the cheaper rate usually between midnight and 7am⁶, and National Energy Action describes seven hours, usually between midnight and 7am²⁰.

The window is not set nationally. uSwitch reports that the cheaper Economy 7 time period runs for a seven-hour period at some point between 11.00pm and 8.00am, and that the regional network operator, the company responsible for physically supplying electricity to the property, defines the window, which can be between 7 and 9 hours⁷. Which? notes that some energy companies also offer extra hours during winter⁸. The remaining hours are charged at a more expensive peak rate²⁰, and uSwitch describes a 17-hour day period⁷.

Economy 7 is mainly intended for homes that run on an electric heating system and use storage heaters²¹. Energy Saving Trust notes that storage heaters should always be used on an Economy 7 tariff to take advantage of cheaper overnight electricity⁹, and that a time-of-use tariff such as Economy 7 or Economy 10 is needed to access cheaper electricity prices²². National Energy Action states that storage heaters use Economy 7 or Economy 10 tariffs for cheaper energy at night²⁰.

The controls are the mechanism. Energy Saving Trust explains that the meter or a timer switch controls when the off-peak circuit is live, and the heater charges automatically during these cheaper hours²³. That is a hard-wired arrangement rather than an app: the off-peak circuit is energised by the meter or a time switch, and the storage heater's input control decides how much heat is taken in during the window. Storage heater controls are covered in more detail on Storage Heater Controls: Input, Output and Smart Charging.

In Scotland, Economy 7 meters are known as white meters, because the meters supplied by energy companies are white¹⁹. The Consumer Council for Northern Ireland publishes Economy 7 night unit rates for Northern Ireland suppliers, including 17.291p for Click Energy, 18.138p for Budget Energy Bill Pay and 19.641p for Budget Energy Keypad²⁵. Those are Northern Ireland figures and do not apply in Great Britain.

Economy 7 rates: roughly 8p to 15p at night against 25p to 45p by day

Published Economy 7 rates vary widely by supplier, region and date, and no single national figure holds. What can be said is the shape: a cheap night rate against a much higher day rate, with the gap doing the work. One comparison puts the night rate at between 8p/kWh and 15p/kWh depending on the provider²¹, while a standard variable Economy 7 equivalent carries a night-time unit rate of 16.63 pence per kWh²². Northern Ireland night rates run from 17.291p to 19.641p across three suppliers²⁵. Time-of-use tariffs can go lower still, with off-peak charging for a home car quoted at as little as 7p/kWh²³.

The Centre for Sustainable Energy models Economy 7 tariffs at 34.38p for on-peak and 15.43p for off-peak, with a 58:42 split⁹. That is a modelling assumption for its electric heating advice, not a market average. uSwitch reports that most suppliers charge around 26.3p per kWh of electricity on their single-rate standard variable tariffs, in the South Wales (SWALEC) region⁷.

The rates a household is offered depend on the supplier, the region and the meter. Which? advises comparing off-peak rates and times, peak rates, and any standing charges or exit fees³. Energy Saving Trust advises asking about any flexibility in the tariff, such as the ability to switch between tariffs or opt out of time-of-use pricing¹².

For a household's independence, the night rate is a genuine hedge: it lets a home buy electricity when the system is quiet and store the result as heat. What it does not do is reduce total consumption. A storage heater charged on Economy 7 still uses the same kilowatt hours, and the saving comes entirely from the price difference and from how much of the load can be moved into the window.

Cosy Octopus: three cheap windows a day, aimed at heat pump homes

Cosy Octopus is a heat pump oriented tariff with more than one cheap window in the day, rather than a single overnight block. It is mainly aimed at homes with heat pumps, offering several cheaper electricity windows spread across the day rather than one overnight block²⁶, and is specifically designed for homes equipped with heat pumps¹². Aira describes it as powered by Octopus Energy and designed exclusively for heat pumps, allowing Aira to adjust the system to heat the home and hot water when it suits²⁵. Its exact window times and rates are not published here, so the structure is best described by contrast with the fixed overnight model.

The distinction that matters for controls is that a multi-window tariff cannot be met by a single overnight timer. It needs a programmer or thermostat that can hold several separate schedules, or a control that reads the tariff. Heating programmers and timers are the baseline tool here, covered on Heating Programmers, Timers and Time Switches.

Octopus Energy's other tariffs show the range. Its Intelligent Octopus tariff has six hours of cheaper electricity overnight²⁷. Its Agile Octopus tariff tracks half-hourly wholesale prices and updates its rates daily²⁷. A household choosing between them is choosing between a predictable window and a variable price, and the controls needed differ accordingly.

For a heat pump, the multi-window structure suits the way the machine works. A heat pump runs most efficiently at low flow temperatures over long periods, so spreading operation across several cheap windows is closer to its natural rhythm than a single deep overnight charge. Government research on heat pump installations found that weather compensation was typically enabled, though in some cases it appeared to be in conflict with third party thermostat control⁵. That conflict is the practical risk on any tariff-aware setup: a third party thermostat cycling the heat pump on and off can work against the weather compensation curve the installer set. Weather compensation is explained on Weather Compensation Controls Explained.

Octopus Agile: half-hourly prices that follow the wholesale market

Agile Octopus tracks half-hourly wholesale prices and updates its rates daily²⁷. Customers on the tariff find out the electricity unit rates they will pay for the next 24 hours between 4pm and 8pm daily⁸. Octopus says that price spikes are short-lived, typically lasting 30 minutes to an hour⁸.

That structure is the most demanding of controls and the most rewarding for a household that can shift load. A half-hourly price cannot be chased by a fixed schedule, because the cheap half-hours move. It needs either a control that imports the price and acts on it, or a household willing to check the next day's rates each evening and adjust.

The wider category is dynamic time-of-use tariffs, where energy prices can vary continually and are calculated in real-time depending on various factors¹. The Energy Ombudsman notes that time-of-use tariffs have electricity prices that vary throughout the day, usually with a cheaper overnight charging window¹³, which is the simpler end of the same family.

For heating, the practical use of a half-hourly tariff is preheating: running the heat pump or the heating harder in a cheap half-hour so the fabric of the home holds the heat through an expensive one. That requires a control that can act on price rather than clock time, and it requires a home with enough thermal mass for the preheat to survive. Where the home is lightweight and loses heat quickly, the preheat is wasted and the household pays the peak rate anyway.

Smart thermostats and controls that can chase cheap hours

Having a smart meter lets a household take advantage of advanced time-of-use tariffs¹⁷. In Wales, the Welsh Government notes that access to time-of-use tariffs means cheaper rates during off-peak hours and incentives for energy usage on high-supply days²⁸. The meter is the prerequisite; the control is what acts on it.

Smart thermostats are devices that can be programmed, or remotely controlled, to manage a home's temperature¹⁸. Their money-saving methods include remote switching off via a phone, more sophisticated sensors to avoid temperature extremes, and heating or pre-heating certain rooms while leaving unused rooms untouched¹⁸. On a time-of-use tariff, the pre-heating function is the one that matters most, because it is the mechanism by which a household buys heat in a cheap window and uses it in an expensive one.

Smart heating controls automatically optimise heating settings to save money and energy¹⁷. That optimisation is only as good as the data it has. A control that knows the tariff can preheat before the peak; a control that only knows the room temperature cannot.

The limits are worth stating. A smart thermostat on a dynamic tariff depends on the manufacturer's cloud service to fetch prices and on the app to hold the schedule. If the service ends or the app is withdrawn, the tariff-aware behaviour stops, even though the boiler and the meter still work. That dependence is examined on Heating Controls and Energy Independence: Local Control and Cloud Dependence and Smart Heating Controls: Security, Data and Product Support. Subscriptions attached to some thermostats are covered on Smart Thermostat Subscriptions and App Charges.

For heat pumps specifically, Smart Energy GB states that heat pumps can keep homes comfortable on smart tariffs by heating steadily at times when electricity is cheaper, without noticeable change for most households²⁹. That is the design intent: not a cold house at peak, but a warm one heated earlier.

What the HeatFlex trial showed about automated heat pump flexibility

The HeatFlex trial tested remote control of heat pumps to avoid peak demand times, as a randomised control trial³⁰. It specifically avoided introducing a financial incentive linked to the amount of turn-down participants achieved³⁰, which means the comfort findings are not distorted by payment.

The consumption result was substantial. HeatFlex recorded a reduction in heat pump electricity consumption of 0.382 kWh per half-hour (p < .001) during the flexibility window, a 74% reduction of typical consumption¹⁰. That is a measured reduction in the trial, not a projection.

Comfort held up. Of the 15 interviewees, 14 reported being very comfortable with the remote automation of their heat pump¹⁰. That is a small sample, and the trial design matters: participants were not being paid to accept discomfort.

The economics were modelled separately. Nesta modelled electricity wholesale, network and policy costs associated with operating a heat pump flexibly over a ten year period from 2024³⁰. Which? reports that a study by energy consultancy Cornwall Insight found a household can save money just by being on a typical time-of-use tariff⁸. The Climate Change Committee's heat pump transition report notes that additional savings are possible with flexible electricity tariffs³¹.

What the trial establishes for a household is that automation, not manual scheduling, is what makes heat pump flexibility work at scale. A person cannot turn a heat pump down for a half-hour window every evening without noticing. A control can.

Whether Economy 7 is worth it: the 40% overnight rule

The published break-even points differ. Energy Helpline states that a household would have to use more than 40% of its electricity during the night to make switching worthwhile⁶. National Energy Action states that for Economy 7 to be economical, a household should be able to use at least 40% of its electricity at night²⁰. uSwitch puts the general rule of thumb at more than 35% of electricity at night to make Economy 7 cost-effective⁷. Which? says at least 30% of electricity during the cheaper night-time hours⁸. Which? also notes that using less than 30% of electricity during the cheaper night-time hours could mean paying less on a single-rate tariff³².

The spread is not a contradiction so much as a difference in assumptions about rates, standing charges and the household's day usage. The safe reading is that a household well below 30% overnight use is unlikely to gain, and one above 40% is likely to. Between those figures, the answer depends on the specific rates on offer.

Who suits Economy 7 is clearer. Energy Helpline describes it as an ideal option for customers who have electric storage heaters, because they can be heated overnight and used to give off heat the following day⁶. Which? notes that people with Economy 7 typically use these hours to charge their electric storage heaters with heat³. The tariff and the heater are designed as a pair.

Where time-of-use heating falls short: peak rates, meter limits and comfort trade-offs

The limitations are structural, not fixable by choosing a better tariff.

• Peak rates can be higher than a single-rate tariff. A time-of-use tariff charges a higher price for electricity used in peak periods¹², and the peak rate is the one a household pays when it cannot shift load.
• Misaligned heating costs more, not less. Government research found that where heating patterns are not well aligned to the tariff, time-of-use tariffs can increase fuel bills⁵.
• The meter has to be right. A special meter is needed for a time-of-use tariff, capable of charging and measuring two rates depending on when energy is used¹¹. Economy 7 and Economy 10 are older time-of-use tariffs that need compatible meters¹⁴.
• Smart meter installation can be blocked. Smart Energy GB lists a barrier: a household has storage heaters and is on Economy 7 or 10, and the supplier does not offer smart meters that work with Economy 7 or 10 yet²⁶. Smart Energy GB also states that a household on an Economy 7 or Economy 10 tariff can get a smart meter²⁶.
• Comfort is the trade-off. Preheating a home to avoid a peak means warmer rooms at times a household may not want them, and a cooler home if the preheat runs out.
• Controls can fight each other. Government research found weather compensation was typically enabled on heat pump systems, though in some cases it appeared to be in conflict with third party thermostat control⁵.

The meter position is more settled than it once was. The Energy Ombudsman states that all smart meters can support tariffs which charge different prices at different times throughout the day and night, including Economy 7, and that Economy 10 meters are also available³³. Smart Energy GB states that smart meters are compatible with Economy 7 tariffs and fixed rate tariffs, and can also enable newer time-of-use tariffs²¹. Which? notes that smart meters enable time-of-use tariffs, where different amounts are charged for electricity used at different times³².

For a household's energy independence, the honest summary is mixed. A time-of-use tariff with the right controls lets a home buy electricity when it is cheap and, increasingly, when it is abundant, which is a real gain in control over running costs. What it does not do is remove dependence on the grid, on a supplier's price publication, on a meter that reports half-hourly, or on a manufacturer's cloud service to act on the price. The household that wants the flexibility without the platform dependence can still use a timer and a fixed overnight window, and accept a smaller saving.