What exactly is Economy 7 and how does it work? We’ll be answering your most important questions about Economy 7 and recommend some alternatives to help you save more money and reduce your carbon footprint.
The ultimate guide to Economy 7 Heating
What is Economy 7?
Economy 7 is a time of use (TOU) tariff, which offers customers a cheaper rate of electricity at off-peak times. These tariffs typically offer cheaper electricity prices when demand for electricity is at its lowest (usually night time). As the name suggests, you’ll get seven hours of off-peak electricity. When your off-peak hours are will change depending on your energy supplier and will vary when the clocks go back and forward. Sometimes your supplier may choose to divide the seven hours into different periods. This would mean that your electricity tariff would alternate between the two rates (on-peak and off-peak) throughout the night.
According to the Energy Saving Trust, an off-peak (night rate) for economy 7 electricity cost 9.76p per kWh. And while this cheaper tariff might seem appealing at first, an on-peak (day rate) for economy 7 electricity will cost you nearly double (20.03p per kWh).
What is an Economy 7 meter?
An Economy 7 meter works alongside an Economy 7 tariff. It will usually have two sets of numbers to show you what your energy usage is for the different tariffs. This is used by your energy supplier to switch between your two tariffs. If you’re looking to switch to a dual tariff, you’ll need to get a smart meter that’s set up to work with it first. And similarly, if you’re looking to switch from a dual tariff to a standard one, you may need to upgrade your meter first.
Will I save money?
The standard rate of electricity in England, Scotland and Wales is 16.36 pence/kWh. Compare that with an off-peak economy tariff of 9.76pence/kWh and you may think that you’ll save with this tariff. But whether you’ll actually benefit from this lower tariff is entirely dependent on your lifestyle and heating.
One of the major setbacks of this tariff is that they’re often paired with night storage heaters, which are infamously known for their inefficiencies. They take advantage of cheaper rates of electricity by heating up its core overnight (which usually takes about seven hours). So while they are able to run on a cheaper tariff, they require a lot more electricity to reach their maximum heat and tend to expel most of that heat in the morning, forcing homeowners to switch their clunky heaters on at peak times, and pay 20.03 pence/kWh for it!
What are other alternatives?
Most people choose Economy 7 because they would like to save money on their electricity or want to lower their carbon footprint. However, there are many other ways you can do so without having to switch to this tariff.
For instance, switching energy providers each year is a great way to get the best deal on a standard tariff. Most switching websites will let you specify what kind of tariff you want, so you can choose a 100% green supplier.
If you currently have electric heating or night storage heaters, the best way to save money on your heating and electricity is to upgrade your heaters. Choosing a top brand like ELKAtherm can help you save money on your electricity since they are far more energy efficient. You can also make improvements to your home to help you save money on your heating.
As you can see, there are many different ways to save on electricity, which will help you reduce your energy bills and your carbon footprint without switching to an Economy 7 tariff. If you’d like to learn more about our energy efficient electric radiators, contact us on 0800 270 7736. Our ELKAtherm experts can answer any questions you may have about electric heating and book your free home survey.