Economy 7 explained

With customers looking for more flexibility on their energy, many are signing up to 'time of use tariffs', Economy 7 is an example of this. If you have an Economy 7 meter, you’ll benefit from cheaper electricity at night, but you'll pay more for using it in the day.

Find out how Economy 7 meters and their tariffs work, how much money you could save, and whether an Economy 7 tariff can benefit you.

What is Economy 7?

Economy 7 is a time-of-use electricity tariff that charges 2 different prices for the electricity you use. The price charged depends on when you use the electricity – a bit like peak time and off-peak phone calls, that's why the tariff is called “time-of-use”.

It’s called Economy 7 because you get 7 hours of cheaper electricity every night. The price you pay at night could be up to 50% less than the daytime rate.

However, during the day you’re likely to pay a lot more for your electricity than you might on a normal fixed or variable tariff.

In Scotland, Economy 7 meters are known as ‘white meters’ because the meters supplied by energy companies are white.

Do I have an Economy 7 meter?

The easiest way to tell if you’re on Economy 7 is to check your bill. If your supplier is charging 2 different prices for the electricity you use, then you’re on Economy 7.

The 2 rates might be labelled ‘low’ and ‘normal/high’ or ‘day’ and ‘night’. Your meter might also have these rates labelled on it.

If you’re still not sure if you have Economy 7 then call your energy supplier and check.

How to read an Economy 7 meter

There are 2 types of Economy 7 meters. Here's how you read each type:

• The first type has 2 displays - the top row is for your day rate electricity and the bottom row is for the night rate. When you read your Economy 7 meter, always check both displays.
• The second type has 1 display that shows the daytime rate as default. It should also have a button that you press to see the nighttime rate.

Economy 7 vs. standard energy tariffs

The cost of your energy bill depends on the amount of electricity you use. If you have an Economy 7 meter you pay 2 different rates.

If you can use the cheaper rate for tasks like running the dishwasher and washing machine, it may work out cheaper than a standard energy tariff.

How to use Economy 7

Economy 7 works best for you if you’re heating electric storage heaters or a hot water tank during the cheaper hours at night. You can then use that heat during the following day.

And you should plan to use your washing machine and dishwasher at night in order to take advantage of the reduced rates. 

It also makes sense to charge your phone, tablet and other portable devices overnight, ready for the next day.

Who is Economy 7 good for?

Economy 7 can work really well for shift-workers or people who work nights.

If you want a warm house in the evening then it may be less useful. This is because by the evening your heating and hot water should be reaching its coldest point – just before the heating process starts again the following night.

To take most advantage of Economy 7 you need to be organised with your electricity use. As the daytime rate is so much higher, if you don’t strictly limit your daytime usage then you could end up paying more in the long run.

When is Economy 7 cheaper?

The hours that you get the lower rate with Economy 7 depend on which electricity supplier you’re with, as well as where you live. Your off-peak hours could be 11pm to 6am, or 1.30am to 8.30am, or anything in between.

The hours may also change when the clocks go back or forward. You should check with your supplier for their specific off-peak hours.

During peak time, the cost of electricity on Economy 7 could be as much as double the normal rate. Therefore, you need to be sure that Economy 7 is right for you before getting it.

Should I get Economy 7 if I have an electric vehicle?

Economy 7 can be a good option for electric vehicle owners who have a home charger set up. Most people prefer to charge their cars overnight. It takes a few hours to fully charge a battery, so it's more cost-effective to do this when electricity is cheaper. It’s usually more expensive to charge it during the day though, which could be a problem for those who need to charge up between multiple daytime journeys.

Can I switch to Economy 7?

If you think Economy 7 could work for you, then you should be able to switch. Contact your energy supplier to arrange for a meter to be installed and to switch to an Economy 7 tariff.

Will Economy 7 save me money?

Whether Economy 7 could save you money depends on:

• When you use your electricity
• What fuel (gas or electric) you use to heat your home and water
• How many electrical appliances you use

Economy 7 works best in houses that have a hot water tank and/or electric storage heaters. This is because you can use the cheap nighttime electricity to charge them up at night, ready for using during the following day.

It’s also a good idea to make sure your hot water tank is lagged with a fibreglass or foam cover. This should reduce the amount of heat lost and keep your hot water, water hot for longer. If you don’t have electric storage heaters or a hot water tank, then Economy 7 tariffs probably won’t be your best choice.

Can I get a smart meter with Economy 7?

A smart meter records how much gas and electricity you're using in real time. You can look at the smart meter and find out how much you're using on a day-to-day basis. This information is also sent to your supplier, so you don't need to make manual readings.

You may be able to get a smart meter with Economy 7. Your provider should be able to tell you if this is possible or not, and it should be free to install.

What is Economy 10?

Economy 10 is a similar time-of-use tariff to Economy 7. As well as the 7 cheap hours overnight, you also get 3 hours at the reduced rate during the day. However, your supplier charges the other 14 hours at a much higher rate.

How can I save on my energy bills with an Economy 7 tariff?

There are lots of ways to cut your energy costs if you have an Economy 7 meter:

• Reduce your usage: ultimately your bill reflects the amount of energy you use. By cutting down how much you use, you can cut your bills.
• Keep your meter updated: keep an eye on the clock on your meter to make sure it's changing from the day to the night rate at the right time.
• Tell your supplier if your day-time bill rises: if you can't use more electricity at night, it might be worth switching to a standard tariff.
• Check your rates: keep an eye on what different providers are charging to make sure you're getting the best deal possible.

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