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Calculate how much you can save with time-of-use tariffs by shifting electricity usage to off-peak hours.
Calculate off-peak tariff benefits from usage shifting
Based on usage patterns you shift. Requires smart meter and time-of-use tariff enrollment.
Smart tariffs charge different rates for electricity at different times of day. Off-peak rates (7β10p/kWh) are ideal for charging EVs and running appliances, while peak rates (30β40p/kWh) are 4β5 times higher. Smart shifting can save Β£200β400/year.
Smart tariffs charge you different rates depending on when you use electricity. Most use three price periods: cheap off-peak (typically 11pmβ7am or 12amβ6am), standard daytime (7amβ4pm), and expensive peak (4pmβ10pm on weekdays). Off-peak electricity might be 7β10p/kWh while peak is 35β50p/kWhβa 4β5 fold difference. If you can shift just 20% of your usage to off-peak hours, you can save Β£100β200 per year.
Octopus Smart Tariffs: Octopus Energy's smart tariffs are the most popular: Octopus Go (fixed 7.00p/kWh for 4 hours nightly, perfect for EV charging), Octopus Agile (half-hourly variable pricing, 1β50p/kWh, real-time demand response), Octopus Cosy (warm off-peak window 3amβ9am and 4pmβmidnight, budget heating focus), Octopus Flux (high peak rates but low export rates, suits solar+battery). Most tariffs require a smart meter (free, being rolled out nationally) and compatible appliances (EV charger, smart dishwasher, heat pump).
Best Appliances to Shift: Electric vehicles save the mostβa 7kW home charger running 8 hours nightly uses 56 kWh. Shifting from peak (35p/kWh = Β£19.60) to off-peak (7p/kWh = Β£3.92) saves Β£15.68 per charge. Dishwashers and washing machines (each 1.5β2 kWh per cycle) cost Β£0.37β0.70 at peak versus Β£0.11β0.14 off-peakβsaving Β£0.25β0.55 per use. Tumble dryers (5 kWh per cycle) save Β£0.90 per load by shifting. A heat pump (uses 1.5β2 kWh/hour heating) can shift winter morning heating to cheap nighttime pre-charging if the house can store heat in thermal mass (via insulation) or a hot water tank.
Manual vs. Automatic Shifting: Some tariffs (like Octopus Intelligent) support automatic EV charger dispatchβyou tell them when you need the car ready, they charge at the cheapest times. Others require manual shifting (run the dishwasher at 11pm instead of 7pm). Smart plugs and timers can automate dishwashers, washing machines, and other appliances. If you work from home or have flexible schedules, manual shifting is easyβrun energy-intensive appliances 11pmβ7am or 10amβ3pm (off-peak periods). If you can't shift easily, time-of-use tariffs won't save much.
Grid Benefits of Demand-Side Response: When millions of households shift usage to off-peak hours, they help balance the grid, especially in winter. Cheap off-peak periods are typically 11pmβ7am when wind generation is strong and demand is low. Peak periods (4pmβ10pm) are when wind generation dips and demand spikesβgrid operators must fire up expensive gas plants to keep up. By shifting your dishwasher or EV charging 8β12 hours, you help avoid expensive gas plant activation, which benefits everyone through lower wholesale energy prices (passed on to all consumers). This is why suppliers offer such cheap off-peak ratesβdemand-side response is cheaper than building new power plants.
Smart Meter Requirement: Time-of-use tariffs require a smart meter to workβyour usage is recorded every half-hour so suppliers can charge the correct rate. All UK homes are being offered smart meters for free (a government program). If you haven't received one yet, you can request one from your supplier. Smart meters also give you real-time visibility of your usage via an in-home display or smartphone app, helping you identify which appliances use the most energy.
Half-Hourly Settlement and Smart Metering: Time-of-use (ToU) tariffs are enabled by SMETS2 (Smart Meter Equipment Technical Specification) meters, which record consumption in 30-minute intervals. Suppliers receive half-hourly data (HH) and can calculate charges at different rates per period. Mandatory HH settlement has been implemented for non-domestic customers (over 70 kW); domestic HH settlement is voluntary but increasingly offered. Legacy Economy 7 meters (dial) have only 2 rates and are being phased out in favor of more granular ToU pricing.
Price Signal Design and Demand Elasticity: ToU tariffs are designed to signal scarcity to consumers. Off-peak rates (7β12p/kWh) reflect periods of abundant wind generation and low demand (typically 11pmβ7am, also 10amβ3pm weekend). Peak rates (35β50p/kWh) reflect periods of high demand and wind scarcity (4pmβ10pm weekdays). The price ratio (peak/off-peak, typically 4β5x) is calibrated to incentivize demand shifting while remaining commercially viable for suppliers. Economic theory predicts elasticity of ~β0.1 to β0.3 (1% price reduction causes 0.1β0.3% demand increase at that time), but response to ToU is much higher for controllable loads (EV charging 2β4x elastic, dishwashers 10x elastic) versus rigid loads (heating, lighting ~0.1x elastic).
Octopus Agile and Spot Pricing: Octopus Agile offers half-hourly rates tracking EPEX UK power exchange prices. Published daily at 4pm for next-day rates. Typical range: 1β50p/kWh (2p/kWh on windy, low-demand Sundays; 50p+ on peak winter Fridays). Average annual price tracks market average (~15β18p/kWh). Agile suits price-responsive loads (EV charging with delay flexibility, heat pump thermal storage). Revenue opportunity from "negative prices" (you get paid to consume) is rare but attractive for EV owners during oversupply events.
Demand-Side Response (DSR) and Aggregation: Suppliers and grid operators (National Grid ESO) contract with aggregators (Habitat Energy, Octopus Virtual Power Plant, etc.) to pool flexible loads for balancing services. Thousands of smart devices (EV chargers, batteries, heat pumps) can be centrally controlled to shift demand by 5β20 minutes during grid stress. DSR is remunerated via: (1) Reduced tariff rate (already reflected in ToU pricing). (2) Direct payments from National Grid for Balancing Services (Dynamic Containment, Frequency Response). (3) For larger installations, ancillary service markets and BM participation. Aggregators typically take 10β20% commission.
Price Structure Economics: Supplier margin structure on ToU tariffs is typically: Off-peak: cost + 1β2p/kWh margin. Peak: cost + 8β15p/kWh margin (higher margin on peak to cross-subsidize cheap off-peak rates and cover fixed costs). This creates arbitrage opportunity for suppliers and battery aggregatorsβstore energy at off-peak 7p/kWh, discharge at peak 35p/kWh, earn 28p/kWh gross margin (minus efficiency losses and infrastructure costs). Grid-scale batteries exploit this same spread.
Heat Pump Integration with ToU: ASHP (Air-Source Heat Pump) COP of 3β4 means heating cost is 1/3β1/4 of resistance heating. Combined with ToU, a heat pump running 3β5 hours during off-peak (e.g., 2β6am at 7p/kWh) precharges 40β60Β°C water tanks, providing all-day heating via thermal storage. Overnight heating cost: 7 kWh Γ 7p = 49p. Same heat via daytime peak: 7 kWh Γ 35p = Β£2.45. Saving: Β£1.96/night, Β£715/year. Heat pump control via Building Management System (BMS) or manufacturer-native scheduling (e.g., Daikin Cloud, Mitsubishi MELCloud) enables this. ORCA (Open Reactive Control Architecture) is emerging as interoperability standard.
Regulatory Frameworks: Ofgem's REMA (Review of Electricity Market Arrangements, 2023β2024) proposes mandatory half-hourly settlement for all domestic consumers by 2025, enabling true ToU pricing industry-wide. Price caps may shift from unit-rate focus to peak/off-peak capping. Smart Export Guarantee (SEG) and balancing services revenues create additional complexity for prosumers (generator-consumers). SEBS (Shared Electricity Balancing Service) regulations enable aggregated DSR participation in balancing markets.