Tom Melhuish 7 min read

Is electricity cheaper at night? Off-peak electricity rates explored

Explore the cost-saving truths behind nighttime electricity usage. Learn how off-peak electricity rates can impact your business.

Key Takeaways:

Electricity generally costs less at night due to lower demand.
Savings depend on having a variable, off-peak tariff.
Off-peak hours typically range from 10 pm to 8 am.
Usage patterns and tariff types greatly influence potential savings.

Shortcuts:

Is electricity cheaper at night?
The advantages and disadvantages of off-peak electricity tariffs
What are peak and off-peak times for electricity?
Will using an off-peak tariff definitely be cheaper?
Can I reduce my energy bills by using more electricity at night?
How can I cut the cost of my electricity?
FAQs

Is electricity cheaper at night?

Is electricity cheaper at night? Yes, electricity is typically cheaper at night due to reduced demand, known as off-peak hours. However, savings are only realised if you are on a variable tariff that offers lower rates during these times.

In the official energy lingo, this refers to “off-peak time”, which is between 10pm and 8am.

During this ‘night’ period, human activities that normally require electricity decrease dramatically. People go to bed and switch all their devices off, most businesses and offices close, and even most airports shut.

Following the simple law of “supply and demand”, this decreased demand for electricity reduces its price. Practically speaking, the national grid only needs baseload electricity generation running and doesn’t need to call on expensive ‘demand response’ (i.e. call on reserve power generation from gas power stations to come online).

This allows business energy suppliers who have purchased the electricity from generators in advance to offer lower business electricity prices during these low-demand periods, but only to those who choose multi-rate tariffs.

Multi-rate Tariffs

In a multi-rate tariff, energy suppliers charge less per kWh during off-peak hours and more during peak hours. Your bill is divided into the different times of day, with your energy meter recording your consumption separately for each.

Your off-peak hours are defined in your energy tariff. For example, a typical business electricity supplier in an ‘Economy 10 tariff’ has ten off-peak hours between 10 pm and 8 am.

This contrasts to single-rate tariffs, where electricity rates remain the same during the day (this may be preferable for people who cannot take advantage of variable rates).

What’s the cheapest time of day to use electricity?

It depends entirely on your electricity tariff:

In a standard tariff, the electricity you use will be the same price regardless of what time it’s consumed.
In a dual-rate electricity tariff, the cheapest time for electricity are during off-peak hours. An example of this is the “Economy 10 tariff”, where you’ll get the cheapest electricity in the ten-hour night period between 10pm and 8am.

Note that this black-and-white discernment does not reflect the live changes in supply and demand, and is likely to change in the future as technology improves.

For example, the National Grid could use smart gadgets to introduce live electricity pricing where there could even be periods of entirely free electricity (or even negative electricity prices!).

Is electricity actually cheaper between 4pm and 7pm?

No, electricity is not cheaper between 4pm and 7pm. On Britain’s electricity distribution networks, the highest demand occurs in the evening between 4pm and 7pm, driving wholesale electricity prices higher.

During this time, all electricity-hungry sectors of society are active. For example, while some school students are back home watching TV or playing video games, others will remain in after school activities. Some adults will be at work, while others will be at home, likely cooking dinner. Lunch restaurants are still serving, while evening diners are preparing for after-work customers, etc, etc, etc.

What is important to understand is that this additional demand must be met with higher-cost power generation (also called ‘demand response’) like gas-fired power plants, making electricity more expensive.

The advantages and disadvantages of off-peak electricity tariffs

Of course, having variable tariffs also has its cons, and many prefer a standard tariff despite the potential savings. This is crucial to consider if you are thinking of switching business energy:

Advantages of off-peak electricity tariffs?

Cheaper cost per unit electricity: If you are on an “Economy 7” or “Economy 10” tariff, the cost of electricity during these off-peak times per unit will be lower than a standard tariff or in “peak times”.
Night-time businesses: The businesses that benefit most from an off-peak tariff primarily use electricity at night, i.e. pubs, bars or restaurants.
Disciplined homes: If you are organised, you can maximise the benefit of an off-peak electricity tariff by using the washing machine, dishwasher and car charging facilities during the evening off-peak hours.
Electricity arbitrage: If you have your own home renewable energy generation and battery system, you can use these variable tariffs to cover a large portion of your electricity costs.

Disadvantages of off-peak electricity tariffs

Hassle: Some people have very rigid schedules and cannot adjust their electricity usage to off-peak hours, which could reduce the potential for cost savings. Some just don’t need to bother and don’t mind paying a single standard tariff for convenience.
Peak is still expensive: Higher rates during peak periods may offset the benefits gained during off-peak times, especially for properties with significant energy needs during the day.
Complexity: Off-peak tariffs often involve elaborate pricing structures and require diligent monitoring, potentially adding complexity and costs. Some tariffs may come with contractual obligations or minimum usage thresholds, limiting the ability to switch suppliers or adapt to changing energy needs.

What are peak and off-peak times for electricity?

The business energy tariff you’ve agreed with your supplier will define your off-peak times. However, more generally:

Economy 7

Economy 7 tariff is a setup which has two different electricity rates. A day rate and a seven-hour off-peak rate. The Off-peak rate is typically between 12am and 7am, and the peak is every other hour, 7am to 12am.

Can I get Economy 7 electricity?

To benefit from an Economy 7 tariff, it’s necessary to have a meter capable of reading electricity usage at different times; you’ll need either an Economy 7 meter or a smart meter.

Economy 7 meters are really a thing of the past, but you can request a smart meter for both homes and businesses. Here’s Smart Energy GB’s helpful website to tell you how to order a smart meter installation from your supplier.

Economy 10

Economy 10 tariff is another tariff where you pay less during off-peak times. The Off-peak rate is typically between 10pm and 8am, and the peak is every other hour, 8am to 10pm.

A note from our AquaSwitch energy expert Louise Horscroft;

The times for Economy 7 and 10 aren’t set in stone and vary from supplier to supplier, based on location and network etc. – It’s called Economy 7 because, for 7 hours each night, you will pay less for the electricity you use. That’s somewhere between 10am and 8am.
Economy 10 – is 10 hours a day – although these can be broken into three chunks throughout the day – for example, hours in the afternoon (1.30pm – 4.30pm) · 4 hours in the evening (8.30pm – 12.30am) · 3 hours in early morning (4.30am – 7.30am).

Will using an off-peak tariff definitely be cheaper?

No, it depends on when you use the most electricity.

If you tend to use your electricity throughout the day and business operations are 9-5, an off-peak tariff like the Economy 7 probably won’t benefit you at all.

But, if your primary business energy usage occurs in the early hours, this will indeed make electricity cheaper at night.

Can I reduce my energy bills by using more electricity at night?

As electricity prices are stubbornly stuck at record highs, questions are being asked about reducing household and business electricity bills by using electricity later in the evening.

The answer to this is completely dependent on your business electricity tariff. If you are on a standard, single-rate tariff, then the answer is no; unfortunately, you’ll be charged the same unit rate whenever you use electricity.

However, if you are on an off-peak tariff that caters to it, for example, Economy 7 or 10, then yes. In that case, if you wait till the evening to use most of your electricity, you will reduce your electricity bill.

How can I cut the cost of my electricity?

There are plenty of ways to reduce the cost of electricity, especially in these testing times. Here are a couple of ideas to get you started:

Use a smart meter
Switch to an off-peak tariff
Compare electricity prices
Smart timers for high electricity usage electronics

Read our full guide on electricity consumption and how you can improve your business energy efficiency by following a few simple tips.

Compare electricity tariffs

Whether you are looking to compare business electricity prices or household prices, you can use the AquaSwitch comparison service below:

FAQs

Here we answer those burning questions!

What is the cheapest time to use a washing machine?

Washing clothes is one of the most electricity-intensive activities in the home, especially if you use a tumble dryer.

If you are only on a standard tariff meter, it will not matter what time you use your washing machine, as you will be charged the same unit rate throughout the day.

If however, you have economy 7 or 10, we recommend using your washing machine during the off-peak hours defined in your economy 7/10 tariff to benefit from cheaper nighttime electricity.

Does British Gas do off-peak electricity?

Yes, British Gas offer a variety of multi-rate tariffs where your home or business can benefit from cheaper off-peak electricity.

British Gas even offers an electricity vehicle tariff where customers with a smart meter can benefit from the cheapest electricity rates between midnight and 5am.