Time of use tariffs

Time-of-Use (TOU) tariffs are energy plans where the price you pay for electricity changes based on the time of day. They are designed to encourage users to move their energy consumption away from high-demand peak times and into “off-peak” periods when electricity is cheaper and more abundant.

How TOU tariffs work

Unlike a standard fixed tariff, a TOU tariff typically has two or three distinct price windows:

  • Off-peak: Very cheap electricity, usually available overnight (e.g., 12am to 5am). Some tariffs also offer a daytime off-peak window.
  • Peak: The most expensive time to use electricity, typically between 4pm and 7pm when national demand is highest.
  • Day / Standard: The rate you pay during the rest of the day.

Benefits for homeowners

1. Significant cost savings

By shifting high-energy tasks—like charging an EV, running a dishwasher, or heating a hot water tank—to the off-peak window, you can reduce your average unit rate by 50% or more.

2. Optimising green technology

TOU tariffs are the perfect partner for home batteries. You can charge your battery from the grid at the cheapest overnight rate and then use that “cheap” power to run your home during the expensive daytime or peak hours.

3. Lower carbon footprint

Off-peak periods often coincide with high wind generation and low national demand, meaning the electricity you use is often the cleanest available on the grid.

  • Economy 7: The traditional TOU tariff, providing 7 hours of cheaper electricity at night. Best suited for homes with electric storage heaters.
  • Octopus Go: Designed for EV owners, offering a 4-hour window of very cheap electricity (currently around 9p/kWh) every night.
  • OVO Charge Anytime: A smart tariff that provides a low rate for EV charging at any time of day, as long as you let the supplier decide when to charge the car.

Note: To switch to a TOU tariff, you must have a Smart Meter (SMETS2) that can record and transmit your half-hourly usage data to your supplier.

Is a TOU tariff right for you?

A TOU tariff will save you money if:

  • You have an Electric Vehicle or Home Battery.
  • You are willing to use timers on your washing machine, tumble dryer, and dishwasher.
  • You can avoid using high-power appliances (electric ovens, power showers) during the 4pm-7pm peak.
  • You have a heat pump and can use “thermal buffering” to heat the house during cheaper periods.