Economy 7 Explained: Hours, Rates and Is It Worth It?

What is Economy 7 and how does it work?

Economy 7 is a static time-of-use tariff. Your electricity meter records consumption at two rates: a cheaper off-peak rate for seven hours and a more expensive peak rate for the other 17 hours. Unlike a single-rate tariff, the price you pay for one kilowatt-hour therefore depends on when you use it.

The tariff is commonly used by homes with electric storage heaters and hot-water cylinders. Those appliances can store heat bought overnight and release it later. It can also suit some households that charge an electric vehicle or can safely schedule other substantial loads during the off-peak window.

Cheap electricity is balanced by a peak rate that can be higher than an equivalent single-rate offer. The word “Economy” is not a guarantee of a lower total bill: the result depends on both rates, the standing charge and the proportion of electricity used off peak.

What are the Economy 7 hours?

Economy 7 gives seven off-peak hours in each 24-hour period, normally overnight. There is no single set of Economy 7 hours for every household. The window depends on the supplier, tariff, meter setup and electricity region, and it may be one continuous block or split into separate periods.

Do not assume that midnight to 7am applies to your meter. Check the tariff information on your bill or online account and ask your supplier to confirm the switching times. Some arrangements move by an hour when the clocks change, while others remain on the same clock setting throughout the year.

A simple check is to note both meter registers before and during the expected off-peak period and see which one advances. This can help identify the active register, but the supplier should confirm which register and times it uses for billing before you change your routine.

• Use storage-heater and immersion-heater controls that are correctly set for the cheap period.
• Schedule an EV charger only within the confirmed off-peak window.
• Follow appliance safety instructions; do not run washing machines, tumble dryers or dishwashers while you are asleep.

Is Economy 7 worth it? Find your break-even point

Economy 7 is most likely to work for a home with electric storage heating, electrically heated water or another large load that can use the cheaper hours. It is less likely to help when the home uses most electricity for daytime cooking, direct-acting electric heaters, lighting and appliances that cannot be shifted.

You can calculate the off-peak share needed to beat a single-rate tariff. Subtract the single rate from the Economy 7 peak rate, then divide that result by the difference between the Economy 7 peak and off-peak rates: break-even off-peak share = (peak rate − single rate) ÷ (peak rate − off-peak rate). Use rates in the same units and compare standing charges separately.

For an illustrative Economy 7 offer of 32p per kWh by day and 14p per kWh off peak, compared with a 25p single rate, the break-even share is (32 − 25) ÷ (32 − 14) = 7 ÷ 18 = 38.9%. More than about 39% of consumption would need to fall in the cheap period for the usage charges to be lower. Different rates produce a different threshold.

Worked annual cost example

Suppose a household uses 3,600 kWh a year and can use 45% off peak. That is 1,620 kWh off peak and 1,980 kWh at the peak rate. At the illustrative rates above, the off-peak electricity costs £226.80 (1,620 × £0.14) and peak electricity costs £633.60 (1,980 × £0.32). The combined usage charge is £860.40.

The same 3,600 kWh at the illustrative 25p single rate costs £900. Economy 7 saves £39.60 on usage in this example. You must then compare the tariffs’ annual standing charges, discounts, exit fees and any meter-change cost to see whether the complete annual saving remains positive.

Now suppose only 30% is used off peak. The Economy 7 usage charge becomes £957.60: 1,080 kWh at 14p plus 2,520 kWh at 32p. That is £57.60 more than the £900 single-rate charge. The example shows why the timing of consumption matters more than the cheap rate on its own.

How to read and calculate an Economy 7 bill

An Economy 7 bill should show two meter readings and two unit rates. The registers may be described as day and night, peak and off-peak, low and normal, or Rate 1 and Rate 2. Do not assume Rate 1 is always the night register: labels and meter configurations vary.

For each register, subtract the previous reading from the current reading to find the kWh used. Multiply the day usage by the day rate and the night usage by the night rate. Add both usage charges, then add the daily standing charge once for every day in the billing period. Account separately for any discount, VAT treatment or adjustment shown on the bill.

Smart meter button sequences vary by model. Citizens Advice publishes model-specific reading instructions. If the bill assigns consumption to the wrong register, photograph both readings with the date and contact the supplier rather than swapping the figures yourself.

How to compare Economy 7 with other tariffs

Start with a full year of bills if possible. Add the annual peak kWh and off-peak kWh, then price that exact usage under each tariff. Comparing only the night rate hides the higher peak price, while comparing a monthly Direct Debit can be misleading because the payment may include credit or debt adjustments.

Check the standing charge, contract length, exit fee, payment method and whether you need a different meter. A smart meter can support two-rate and newer time-of-use tariffs, but availability and setup depend on the supplier. If you have storage heaters or a separate controlled circuit, confirm that a meter or tariff change will keep the heating and hot water operating correctly.

In England, Scotland and Wales, Ofgem says Economy 7 is a multi-rate tariff and capped default versions remain subject to the price cap. Fixed tariffs are not protected by that cap. The cap does not create one national Economy 7 rate: actual peak and off-peak prices vary by region, payment method and supplier.

What about Economy 7 in Northern Ireland?

Northern Ireland has a separate electricity market and is not covered by Ofgem’s Great Britain price cap. Economy 7 tariffs are available, but suppliers, rates, discounts and standing charges differ from those in England, Scotland and Wales.

Use the Consumer Council for Northern Ireland’s current Economy 7 comparison table and your own annual day and night kWh when comparing offers. Do not apply a Great Britain average or price-cap figure to a Northern Ireland bill.