If you’ve ever looked at your electricity bill and wondered why some households pay less for using power at night, you’ve likely come across the concept of an economy 7 tariff. But what is economy 7, and is it actually worth considering?
In simple terms, an economy 7 tariff is a dual-rate tariff that charges different prices for electricity depending on the time of day. You get cheaper electricity for 7 hours overnight, while daytime electricity tends to be more expensive. This setup is designed to encourage people to shift energy use away from peak demand periods.
For the right household, it can lead to significant savings. For others, it may end up costing more. Understanding how it works is key before deciding if it’s the right option for you.
Introduction to Economy 7
Economy 7 is a special electricity tariff designed to help households save money by offering cheaper off-peak electricity rates for seven hours each night, usually between midnight and 7 am. The main advantage of Economy 7 is that it encourages energy use during off-peak hours, when demand on the grid is lower and electricity is less expensive. To benefit from these cheaper off-peak rates, you’ll need an electricity meter that can track your day and night usage separately – this could be a dedicated Economy 7 meter or a modern smart meter set up for dual-rate tariffs. Understanding your meter and the timing of your off-peak hours is key to unlocking the full advantage of Economy 7 and keeping your bills as low as possible.
How Does Economy 7 Work?
An economy 7 tariff splits your electricity usage into two distinct pricing periods: day and night rates. During the day (peak hours), electricity costs more. At night (off-peak hours), the rate drops… sometimes significantly.
This system relies on either a dedicated economy 7 meter or a modern smart meter configured to support dual pricing.
The idea behind this pricing model is simple: electricity demand is lower at night, so suppliers can offer cheaper rates. For example, day rates are often around 25–35p/kWh and night rates around 10–20p/kWh, depending on supplier and region. The night rate is usually significantly cheaper – often 30–60% lower than the day rate. If you can shift energy-heavy activities—like heating water or charging devices—to those hours, you benefit from lower costs. Meter readings are important for accurate billing, as you need to submit both day and night readings.
What Are the Economy 7 Times?
The exact economy 7 hours vary depending on your energy supplier and location, but they typically fall within a 7-hour window overnight—often somewhere between midnight and 7:00 AM. The off-peak hours for Economy 7 tariffs usually run from midnight to 7am, but this can vary by supplier.
However, it’s not always as straightforward as a fixed midnight-to-7 schedule. Economy 7 is typically one continuous 7-hour overnight block. Split periods are more common with Economy 10 tariffs – some suppliers may split the hours into two blocks (for example, early evening and early morning), and daylight saving changes (GMT/BST) can shift the actual clock times.
Because of this variation, it’s important to check your specific tariff details or meter settings to confirm your exact off-peak window.
Who Should Use an Economy 7 Tariff?
An economy 7 tariff isn’t a one-size-fits-all solution. It tends to work best for households that can shift a large portion of their electricity use to nighttime.
For example, homes with electric storage heaters are often ideal candidates. These heaters can be programmed to charge overnight using cheaper off-peak electricity from an Economy 7 tariff, storing heat generated overnight – when electricity is cheaper – and releasing it gradually during the day. Similarly, properties with hot water tanks using immersion heaters can heat water overnight at a lower cost. Hot water tanks on an Economy 7 tariff often have dual immersion heaters to take advantage of off-peak rates, allowing you to heat the whole tank overnight for use the following day. If you need extra hot water during the day, you can use the boost control to heat more water, but this will use more expensive electricity.
Electric vehicle owners also benefit. Users can save significant costs by charging their electric vehicles during the 7-hour off-peak window. Electric appliances like washing machines and dishwashers can also be scheduled to run during off-peak hours.
Economy 7 is most cost-effective for households with electric storage heaters or hot water tanks that can be programmed to charge overnight. Savings can range from negligible to several hundred pounds per year, depending on how much usage you shift to off-peak hours.
Will It Actually Save Me Money?
You must monitor your usage carefully to avoid overpaying, as some older meters do not automatically adjust for British Summer Time.
A common rule of thumb is around 30–50%, but the exact break-even point depends on your tariff.
Why? While off-peak rates are cheaper, the daytime rate is usually higher than standard tariffs.
Pros and Cons of an Economy 7 Tariff
Like any energy plan, this one has its strengths and drawbacks. It’s not inherently better or worse – it simply suits some households more than others. Energy companies offer Economy 7 tariffs specifically for electricity, not for gas. Gas meters are not compatible with Economy 7 or other dual-rate tariffs.
Advantages:
Lower electricity costs during off-peak rates, especially overnight
Ideal for EV charging and energy-intensive appliances
Works well with storage heating and water heating systems
Encourages more efficient energy use patterns
Disadvantages:
Higher daytime electricity costs
Requires behavioral changes to shift usage
Not suitable for households with high daytime consumption
Needs a compatible economy 7 meter
Economy 7 meters are specifically designed for electricity usage and do not apply to gas consumption; gas meters do not support multi-rate tariffs
The balance between these factors ultimately determines whether the tariff is beneficial for you.
Heating Systems and Economy 7
Heating systems like storage heaters and hot water tanks are particularly well-suited to Economy 7 tariffs. These systems can be set to use off-peak electricity during the night, storing heat or hot water when rates are lowest. Night storage heaters, for example, absorb heat overnight using cheaper off-peak electricity and then release it gradually throughout the day, reducing the need to rely on more expensive on-peak electricity during peak hours. Similarly, hot water tanks can be programmed to heat water during the off-peak period, ensuring you have hot water available when you need it, without paying higher daytime rates. By aligning your heating schedule with the seven hours of cheaper off-peak rates, you can save money on your energy bills and make your home more energy efficient.
How to Check If You Have an Economy 7 Meter
If you’re unsure whether you’re already on a dual-rate tariff, there are a couple of simple ways to check.
Start by checking your electricity bill. If you see two separate rates – typically labeled “day” and “night” – you’re likely on an Economy 7 tariff. Another possible indicator is your MPAN (Meter Point Administration Number): if it starts with “02,” it may suggest a dual-rate setup, but this isn’t definitive, so it’s best to confirm with your supplier.
You can also inspect your meter directly. An economy 7 meter will usually display two readings, showing your electricity usage during the day and at night separately. These are often called ‘night readings’ and ‘day readings.’ Submitting accurate meter readings, including your night readings, is important for correct billing.
How to Read an Economy 7 Meter
Reading your meter depends on the type you have.
With a traditional two-display meter, you’ll see separate readings labeled something like “Low” (night) and “Normal” (day). You’ll need to record both values when submitting readings.
For newer meters with a single display, there’s often a button you can press to toggle between readings. Each display corresponds to one of the day and night rates.
Smart meters typically handle this automatically, sending the correct readings directly to your supplier.
Economy 7 vs Standard Tariffs
The key difference between an economy 7 tariff and a standard tariff lies in pricing structure.
A standard tariff uses a single fixed rate for electricity, regardless of when you use it.
In contrast, a dual-rate tariff introduces variability. The price of electricity under Economy 7 varies between day and night, with cheaper rates during off-peak hours and higher rates during the day.
Economy 10 tariffs offer cheaper electricity for ten hours at night and may provide more flexibility for users who need off-peak electricity at different times compared to Economy 7.
How to Switch to or from Economy 7
Switching tariffs—or even upgrading your meter—is usually straightforward.
Contact your energy supplier and ask about available economy 7 tariff options.
Check your current meter—you may need an upgrade to an economy 7 meter or a compatible smart meter.
Request a meter change if required; this may involve a one-time fee.
Confirm your off-peak hours so you can plan your usage effectively.
If switching away, ask for a standard tariff and arrange for meter reconfiguration if needed.
Before making the switch, it’s a good idea to review your recent energy usage to estimate how much you could realistically shift to nighttime.
