Tariffs

Choosing the right energy tariff is one of the most effective ways to lower your energy bills and reduce your carbon footprint. As the UK grid moves towards renewable energy, suppliers are offering increasingly innovative tariffs that reward you for using electricity when it is abundant, clean, and cheap.

If you have installed heat pumps, solar panels, or an electric vehicle, a standard “flat-rate” tariff is likely costing you significantly more than a modern “smart” tariff.

Types of modern energy tariffs

1. Time-of-Use (TOU) Tariffs

These tariffs have different prices at different times of the day. They typically offer very cheap rates overnight (e.g., 5p-10p per kWh) when demand is low, and higher rates during the evening peak (e.g., 4pm-7pm).

2. Dynamic / Agile Tariffs

The price of electricity changes every half hour based on the “wholesale” market price. When it’s very windy or sunny, prices can drop to near zero or even become negative (meaning you get paid to use electricity).

  • Best for: Tech-savvy users with smart controls and automated systems.

3. Export Tariffs (SEG)

If you generate your own electricity via solar panels, these tariffs pay you for every unit you send back to the grid.

4. Tracker Tariffs

The price follows the daily wholesale market rate but is fixed for that entire day. This offers a middle ground between a standard fixed tariff and a half-hourly dynamic one.

Important: To access most of these modern tariffs, you MUST have a functional smart meter that can provide half-hourly readings to your supplier.

Why your tariff matters

  • Financial Savings: Shifting just 30% of your usage to off-peak times can lower your annual bill by hundreds of pounds.
  • Carbon Reduction: Lower prices usually coincide with high renewable generation on the grid. By using electricity when it’s cheap, you are using the cleanest power available.
  • Grid Support: By avoiding usage during peak times, you help reduce the need for fossil-fuel “peaker” plants and lower the risk of grid overloads.

Switching checklist

  • Confirm you have a working smart meter (SMETS2 preferred) enrolled with your supplier.
  • Check off‑peak windows and price spreads; align with when you can shift usage (EV/heat pump/washing etc.).
  • Review exit fees and minimum term.
  • Consider adding smart controls to automate shifting.
  • If you have solar, compare SEG export rates and rules.

Tools

  • Tariff comparison — Compare the best smart tariffs for your specific technology.
  • Carbon tracker — See the real-time carbon intensity of your current energy usage.

Guides

FAQs

Are dynamic tariffs risky when prices spike?

They can be if you cannot shift usage. Many users mitigate this by setting appliance schedules and using caps/alerts. A tracker or TOU tariff may suit if you prefer predictability.

Will a smart tariff work with a heat pump?

Yes. Heat pumps can pre‑heat your home or hot water during off‑peak periods. Correct sizing and weather compensation help maintain comfort.

Can I combine an export tariff with a time‑of‑use import tariff?

Yes, but they may be from different suppliers. Check metering requirements and settlement rules.

Sources

Troubleshooting & common problems

Issues you might encounter with your tariffs and how to solve them safely.

Bills higher after heat pump install

Analyzing why your energy costs might have increased after switching from a gas boiler to a heat pump.

Economy 7 or smart meter confusion

Navigating the complexities of multi-rate tariffs, old legacy meters, and modern smart meter upgrades.

View all tariffs problems

Written by NetZeroNow Editorial Team | Last updated on 2026-03-23