There’s lots to consider when you’re choosing an electricity provider. As well as getting the cheapest rates, you’ll want to ensure you receive a reliable service, in addition to great customer care. One of the trickiest aspects of choosing an energy supplier can be deciding which tariff is right for you.
Economy 7 is just one type of electricity tariff, although there are many others. Read on to find out what an economy 7 electricity is and whether it could be the right option for you:
What Is Economy 7?
An economy 7 tariff means you’ll pay different rates for electricity, depending on when you use it. Sometimes known as a ‘multi-rate’ or differential tariff, economy 7 agreements usually charge customers two different rates for electricity.
You’ll pay a cheaper rate for electricity you use during ‘off peak’ hours and a higher rate for electricity you use during ‘on peak’ hours. In most cases, off peak hours on an economy 7 tariff occur overnight. For example, your off peak hours may be midnight to 7am.
However, this can vary from one supplier to another and may depend on your location. Due to this, it’s important to check the exact terms of your agreement to find out when your on peak and off peak hours occur.
What Is an Economy 7 Meter?
You need to have an electricity installed in your property so that your supplier can see how much electricity you’re using. This enables them to calculate accurate invoices, based on your pre-agreed tariff and your energy usage.
If you’re on an economy 7 tariff, you’ll need a slightly different electricity meter to a standard one. This is because an economy 7 meter is capable of processing two different electricity rates, whereas a standard meter only works with one rate.
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Using an Economy 7 Meter
When you decide to move on to an economy 7 tariff, your energy supplier will usually provide you with an economy 7 meter and install it for you. There may be a small charge for this service but, remember, switching to an economy 7 tariff can help to reduce the cost of your electricity bills.
Once installed, your economy 7 meter will record your electricity usage. From time-to-time, you may be asked to take a reading and give the relevant figures to your electricity company. Alternatively, you may want to take a meter reading so that you can monitor your own electricity usage.
Most economy 7 meters display two long numbers. The one marked ‘Day’ or ‘Normal’ is your on peak electricity usage and the one marked, ‘Low’ or ‘Night’, is your off peak usage. Some economy 7 meters
only show one number at a time. If so, the on peak usage is usually displayed first and you can view the off peak usage by pressing a button on the meter.
Can You Use an Economy 7 Smart Meter?
A Smart meter can be a great way to monitor your energy usage and increase your sustainability. In addition to this, your energy supplier can automatically access the figures they need, without you having to take a reading and send them the information. What’s more – Smart meters devices can be easier to read because they can be located anywhere in your property, instead of in a hard to access cupboard, like most traditional electricity meters.
Although you can use a Smart meter if you’re on an economy 7 tariff, it’s important to ensure that the meter you choose is capable of processing two different rates and recording electricity usage separately, according to your on and off peak hours. If you’re unsure which model is suitable, talk to your electricity provider as they’re often able to supply them.
How to Read an Economy 7 Smart Meter
If you’re using a first-generation Smart meter (also known as SMETS1), you can usually view your electricity usage by pressing 6 on the keypad. You may need to press 6 multiple times until ‘IMP RO1’ appears, followed by a long number. IMP RO1 typically refers to your off peak electricity usage. If you press 6 again, you’ll see ‘IMP RO2’, followed by another long number. This is your on peak electricity usage.
If you’re using a second-generation Smart meter (SMETS2), you usually press the button labelled ‘B’ once to see ‘TOU Rate 1’, followed by a long number. This is your on peak usage. If you press the button marked, ‘A’, you’ll see ‘TOU Rate 2’ and a long number, which is your off peak electricity usage.
Of course, every Smart meter has slightly different operating instructions, so do check the instruction manual to find out exactly how to read your meter.
What Are Economy 7 Times?
Economy 7 times refer to when you switch between on peak and off peak rates. On most economy 7 tariffs, your off peak hours occur overnight. Midnight to 7am is the most common time for off peak hours to occur on an economy 7 tariff, although this may vary.
Remember – your economy 7 times may change when the clocks go forwards or backwards in Spring and Autumn. You’ll need to check how your specific electricity company deals with this and stay up to date with what your economy 7 times are, otherwise, you could inadvertently use electricity during on peak hours.
What Are Economy 7 Rates?
When you pay for electricity, you usually pay a standing charge, regardless of how much electricity you use, and a unit rate. Think of this in the same way as a phone bill: you pay line rental (the standing charge) and then extra for any calls you make (the unit rate).
The unit rate is usually based on kWh, or kilowatt hour. This is a unit of energy, so, the more electricity you use, the more kWh units you’ll use and the higher your bill will be. By choosing a tariff with a low unit rate, you can reduce the cost of your bills.
Economy 7 tariffs can be cost-effective because they actually use two different unit rates. You’ll pay one rate for electricity you use during on peak hours and another, cheaper, rate, for electricity you use during off peak hours.
The unit rate for off peak hours can be 50% cheaper than your on peak unit rate on an economy 7 tariff, so there are substantial savings to be made. However, some economy 7 on peak unit rates are more expensive than a standard rate, so it’s important to consider your usage before you decide whether an economy 7 is right for you.
Can You Use Economy 7 Heating?
If your heating system is powered by electricity, you can use an economy 7 tariff to fund your heating expenses. However, it’s most budget-friendly to do this if you have electric storage heaters and/or a hot water tank. This means you can heat the water at night (when electricity is cheapest) and keep it hot until you’re ready to use it.
Finding the Best Economy 7 Tariff
Most electricity suppliers in the UK offer an economy 7 tariff. However, there rates do vary, so it’s important to scour the market until you find the cheapest rates in your area. Although you can look at the websites of electricity providers individually, you may find it quicker to use a comparison site.
Remember – energy providers offer different deals and discounts all the time, so keep an eye out for the best rates.
When you switch to a different energy provider, you may start out on a fixed rate. This means that the rates you pay won’t change until the fixed term runs out. Following this, you’ll the option to choose another rate, based on what’s available at the time. Alternatively, you might decide to switch to another provider if they’re offering a better deal.
Some homeowners switch from one provider to another on a regular basis. In fact, this can be a savvy way of getting the best deals and keeping your bills low.
Is Economy 7 the Cheapest Option?
An economy 7 tariff can be the cheapest way to access electricity, depending on your usage. If you can adjust your energy consumption so that you use the majority of your electricity at night, you could certainly save money by switching to an economy 7 tariff. You may be able to put your washing machine or tumble dryer on overnight, for example. Similarly, you could run the dishwasher during the night or charge your devices during off peak hours, if it’s safe to do so.
However, if you use the majority of your electricity during the day, economy 7 tariffs may not be the right option for you. If you want to reduce your bills by switching to economy 7, it’s vital to modify your usage so that you aren’t using a lot of electricity during on peak hours.
As you can see, finding the right electricity tariff isn’t solely about finding the lowest rate. Instead, you need to assess your electricity usage to determine which rate works out cheapest for your household. By doing so, you can determine whether an economy 7 tariff is the best option for you and whether it will deliver the cheapest rates.