Economy 7 and Smart Tariffs Explained: Shift the Big Loads, Cut the Bill

The cheapest energy upgrade you can make often costs nothing to install: it's changing when you use electricity, not how much. Economy 7 and the newer smart tariffs charge you far less during an overnight window and more during the day. If you can move your biggest loads — hot water, an EV, the washing machine — into that window, you can knock a real chunk off your bill. But it only works if your usage pattern actually fits, and for some households it makes things worse. Here's how to tell.

How the cheap overnight window works

A time-of-use tariff splits the day into cheap and expensive periods. Economy 7 is the original version: roughly seven cheap overnight hours (the exact hours vary by region and meter), with a higher day rate the rest of the time. It's a legacy tariff but still widely available, and it suits storage heaters, a home battery, and a hot-water cylinder heated overnight.

Newer smart tariffs do the same thing with more precision. From the knowledge pack:

• Intelligent Octopus Go — an overnight window aimed at EV and battery charging (verify the current rate — the pack notes around 7p/kWh but these change).
• Cosy Octopus — cheap windows tuned around heat-pump running costs.
• Agile Octopus — half-hourly, wholesale-linked pricing that can even go negative on windy or sunny days, but needs an engaged user who watches prices.

All of these require a smart meter (a SMETS2). Without one you can't be billed by time of day, and you're limited to a legacy Economy 7 meter at best.

Which loads are actually worth shifting

The prize is your big, flexible loads — the ones you can run at 2am without noticing:

• EV charging — the single biggest win. A full charge overnight instead of at the day rate can save more than everything else combined.
• Hot water — heat the cylinder on the overnight immersion, or a heat pump on a cheap window.
• Home battery — charge it cheap overnight, then run the house off it through the expensive day.
• Washing machine and dishwasher — use the delay timer to start in the cheap window.

Small, always-on loads (fridge, router, standby) barely matter — don't obsess over them. The strategy is about moving kilowatt-hours in bulk, not switching off phone chargers.

Here's the catch — when Economy 7 costs you more

This is the part the switching sites gloss over. A time-of-use tariff is a trade: you get a cheap night rate in exchange for a higher day rate than a standard single-rate tariff. That maths only works in your favour if you genuinely shift enough of your usage.

• If most of your electricity is used during the day — you're home, working, cooking, heating — Economy 7's expensive day rate can leave you worse off than a flat tariff.
• If you have no big shiftable load — no EV, no battery, no electric hot water, no storage heaters — there's often little to move into the cheap window, so the higher day rate just stings.
• The day rate on legacy Economy 7 can be notably higher than a standard rate, so a household that only shifts a couple of wash cycles rarely recovers that premium.

A quick honesty test: look at your smart meter data (or ask your supplier for a breakdown). If you can't realistically move at least a third of your usage overnight, a single-rate tariff may well beat a time-of-use one. For plenty of households, the answer is genuinely "stay on flat."

How this connects to solar, batteries and heat pumps

Smart tariffs are where the battery business case often lives. As the pack notes, a home battery has no household subsidy — its value comes from charging cheaply overnight and discharging at peak, self-consuming your own solar, and pairing with a premium export tariff. Some export tariffs (for example Intelligent Octopus Flux, which is time-of-use and pays most for exports around 4–7pm) actually require a battery. So the tariff and the hardware decision are tied together — you shouldn't judge one without the other.

Similarly, a heat pump's running cost depends heavily on being on a heat-pump-friendly tariff like Cosy Octopus. The kit and the tariff are a package, and getting the tariff wrong can undo the efficiency gain.

Two housekeeping notes: Northern Ireland runs a separate energy market, so tariff names and rates above may not apply there. And your export tariff can be from a different supplier than your import tariff — you're not locked to one company for both.

We don't sell tariffs, batteries, panels or referrals — and unlike the "free" comparison sites, no supplier pays us a penny to point you their way. So when we say Economy 7 might cost you more, or that a battery only stacks up on the right smart tariff, that's the actual engineering, not a nudge towards a sale. Our only job is to work out what genuinely pays for your home — even when the answer is "change nothing."

Figures in this guide are current at the date of publication and indicative only — SEG/export rates change with 30 days' notice, the Ofgem price cap resets quarterly, and grant terms change. Confirm the current numbers for your situation before you commit. This is general information, not personal financial advice.