Economy 7 tariff – what is it and is it right for you?
Economy 7, sometimes termed E7, is a special tariff for electricity that offers a cheaper price for seven hours every night.
The rate you pay during this period is worked out by charging you less per kWh and is calculated using an Economy 7 meter.
This calculates what you use night and day, but is able to tell what you use in that seven-hour window.
It was originally designed for households with storage heaters, that would charge themselves at the cheap overnight rate and then emit warmth later, during the daytime.
Electricity suppliers charge less for power at night because demand is far less.
The hours the cheap rate operates often vary according to the supplier, but are usually either from 11.00pm to 6.00am, 12.00am to 7.00am or 1.00am to 8.00am.
If you don’t know whether you’re in a house with economy 7 meter you can tell by looking at your electricity bill where you can find your Meter Access Number (MPAN).
If it starts with 02, you have economy 7.
Or you can look at your meter – if it’s economy 7 it will have two sets of numbers one saying ‘low’ and one marked ‘normal’.
Or there may be one row of numbers marked ‘day rate’ and a button alongside, which you press to get the night reading.
Will Economy 7 save you money?
If you are able to configure appliances that you use most to come on during the seven-hour window (washing machines, dryers, etc), then you may save money.
But it’s a calculation because the downside of Economy 7 is that while you pay less for electricity at night, the rate for daytime use will be more expensive.
So, for example, if you switch to Economy 7 and your day rate doubles, and your night rate is cut by 50%, then more than half your electricity usage would have to be at night for you to save money.
And a doubling of the day rate is not unusual.
So, for some people, Economy 7 can actually increase their bills.
Some experts advise a general rule of thumb is that you would need at least 40% of your electricity use would have to be at night to make this tariff cost-effective.
Probably, for most of us that’s not practical.
Then again, if you have electric storage heaters, it could well save you a lot of cash.
Again, if you work odd hours, coming home from work very late and sleeping during the day, it could be advantageous.