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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 (7โ10p/kWh) are ideal for charging EVs and running appliances, while peak rates (30โ40p/kWh) are 4โ5 times higher. Smart shifting can save ยฃ200โ400/year.
Smart tariffs charge you different rates depending on when you use electricity. Most use three price periods: cheap off-peak (typically 11pmโ7am or 12amโ6am), standard daytime (7amโ4pm), and expensive peak (4pmโ10pm on weekdays). Off-peak electricity might be 7โ10p/kWh while peak is 35โ50p/kWhโa 4โ5 fold difference. If you can shift just 20% of your usage to off-peak hours, you can save ยฃ100โ200 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, 1โ50p/kWh, real-time demand response), Octopus Cosy (warm off-peak window 3amโ9am and 4pmโmidnight, 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 mostโa 7kW home charger running 8 hours nightly uses 56 kWh. Shifting from peak (35p/kWh = ยฃ19.60) to off-peak (7p/kWh = ยฃ3.92) saves ยฃ15.68 per charge. Dishwashers and washing machines (each 1.5โ2 kWh per cycle) cost ยฃ0.37โ0.70 at peak versus ยฃ0.11โ0.14 off-peakโsaving ยฃ0.25โ0.55 per use. Tumble dryers (5 kWh per cycle) save ยฃ0.90 per load by shifting. A heat pump (uses 1.5โ2 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 dispatchโyou 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 easyโrun energy-intensive appliances 11pmโ7am or 10amโ3pm (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 11pmโ7am when wind generation is strong and demand is low. Peak periods (4pmโ10pm) are when wind generation dips and demand spikesโgrid operators must fire up expensive gas plants to keep up. By shifting your dishwasher or EV charging 8โ12 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 ratesโdemand-side response is cheaper than building new power plants.
Smart Meter Requirement: Time-of-use tariffs require a smart meter to workโyour 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 (7โ12p/kWh) reflect periods of abundant wind generation and low demand (typically 11pmโ7am, also 10amโ3pm weekend). Peak rates (35โ50p/kWh) reflect periods of high demand and wind scarcity (4pmโ10pm weekdays). The price ratio (peak/off-peak, typically 4โ5x) is calibrated to incentivize demand shifting while remaining commercially viable for suppliers. Economic theory predicts elasticity of ~โ0.1 to โ0.3 (1% price reduction causes 0.1โ0.3% demand increase at that time), but response to ToU is much higher for controllable loads (EV charging 2โ4x 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: 1โ50p/kWh (2p/kWh on windy, low-demand Sundays; 50p+ on peak winter Fridays). Average annual price tracks market average (~15โ18p/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 5โ20 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 10โ20% commission.
Price Structure Economics: Supplier margin structure on ToU tariffs is typically: Off-peak: cost + 1โ2p/kWh margin. Peak: cost + 8โ15p/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 aggregatorsโstore 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 3โ4 means heating cost is 1/3โ1/4 of resistance heating. Combined with ToU, a heat pump running 3โ5 hours during off-peak (e.g., 2โ6am at 7p/kWh) precharges 40โ60ยฐC water tanks, providing all-day heating via thermal storage. Overnight heating cost: 7 kWh ร 7p = 49p. Same heat via daytime peak: 7 kWh ร 35p = ยฃ2.45. Saving: ยฃ1.96/night, ยฃ715/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, 2023โ2024) 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.