Time-of-Use Tariffs Explained: Fixed Windows Versus Half-Hourly Prices
- Time-of-use tariffs set prices by time of day, either in fixed windows or following wholesale prices.
- Economy 7 is the older, fixed-window version with a cheaper night rate.
- Smart time-of-use and dynamic tariffs need a smart meter and can change every half hour.
- A battery earns its keep from the gap between cheap and expensive periods, not from the tariff name.
- Savings depend on how much of your use you can move, so check your own pattern first.
A time-of-use tariff charges different prices at different times of day. For a home battery that price gap is the raw material: without it, there is little for the battery to do.
What a time-of-use tariff is
On a standard flat tariff you pay one price per kWh whenever you use electricity. On a time-of-use tariff the price depends on the time. Electricity is cheaper when demand and wholesale prices are low and dearer at the evening peak. The Energy Saving Trust explains time-of-use tariffs as a way to reward households that move some of their use into cheaper periods.
The idea is simple, but the details differ a lot between products. Some tariffs have two or three fixed bands that repeat every day. Others change price every half hour. Knowing which type you are looking at matters more than the marketing name.
Fixed windows: the Economy 7 model
Economy 7 is the oldest version in Britain. It has a cheaper night rate for a set number of hours and a dearer day rate. It was built around storage heaters and hot water cylinders that charge or heat overnight.
The bands are fixed, so you always know when the cheap period starts. The trade-off is that the day rate is usually higher than on a flat tariff, so a home that uses most of its electricity in the daytime can lose out. A battery can help here by charging at night and covering the day, but only if the price gap is wide enough to pay for the energy lost in the battery. For that loss, see our guide to round-trip efficiency.
Smart time-of-use and dynamic tariffs
Newer smart tariffs follow a schedule that is set in advance or track wholesale prices more closely, in some cases with a new price every 30 minutes. The Energy Saving Trust notes that these tariffs need a smart meter to work, because the meter records when you use energy. The meter sends this to your supplier over a secure network and does not need your Wi-Fi.
The more a tariff moves with the market, the larger the possible gap between cheap and expensive periods, and the larger the risk. Prices can spike when supply is tight. The smart meters and half-hourly settlement guide explains how that half-hourly data is used. If you want to see how households try to make money from this, read how to earn money with a home battery on a dynamic tariff.
Check the exit terms
Some smart tariffs are only available with a specific battery, charger or heat pump. Check what happens to your price if you later move supplier or change equipment.
What a battery needs from the tariff
A battery does not create value by itself. It moves energy from a cheap period to an expensive one, and loses a share along the way. So three things have to line up:
- A reliable price gap between the cheapest and dearest periods, wide enough to cover the losses.
- A tariff that lets you buy at the cheap rate and use the stored energy later, with no hidden penalty for doing so.
- Enough flexible use in the expensive hours that the battery has something to offset.
Be honest about the numbers
The Energy Saving Trust article, written in January 2022 in the middle of the energy crisis, estimated only modest savings from time-of-use tariffs for a typical household without changing habits, and more when appliances or charging are automated. Tariff prices have moved a great deal since, so treat any old figure as a guide to the method, not as a promise.
The practical step is to look at your own half-hourly usage, find how much falls in the expensive hours, and then test a tariff against it in the home battery calculator. If your use is flat and small, a time-of-use tariff may not help much, with or without a battery.
Common questions
Is Economy 7 a time-of-use tariff?
Yes. It is the oldest fixed-window version, with a cheaper night rate and a dearer day rate.
Do I need a smart meter for a time-of-use tariff?
For smart time-of-use and half-hourly tariffs, yes, because the supplier needs to know when you use energy. Economy 7 has worked for years with a two-rate meter.
Is a time-of-use tariff the same as a dynamic tariff?
No. A time-of-use tariff can have fixed bands. A dynamic tariff follows wholesale prices and can change every half hour.
Will a time-of-use tariff cut my bill?
Only if you can move enough use out of the expensive periods. If your use is mostly at peak times and cannot move, it may cost more than a flat tariff.
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