Is Electricity Cheaper at Night?

If you’re looking to reduce the cost of your electricity bills, you might find it useful to understand the times at which you use it the most. Many people seem unaware of the fact that the cost of the electricity that you use can fluctuate over the course of the day, being cheaper to use at night than it is during the day. But how does this work, and how can you use it to your advantage? 

Understanding Electricity Pricing

Electricity is charged by the kilowatt-hour (kWh), and it can be cheaper to use at night due to reduced demand. During the day, business use is considerably higher and places greater strain on the system, but after offices, shops and other places of business close up for the day, that strain reduces considerably, allowing suppliers to reduce their prices. 

The hours during which energy use is at its highest are known as ‘peak hours’ and those when it is at a lower rate as ‘off-peak hours’. There’s no standard definition for peak and off-peak hours, and you will find that these change slightly from supplier to supplier, but broadly speaking, you may consider the time between 8 am and 10 pm to be ‘peak’ and hours outside of this as ‘off-peak’. In addition to ‘peak’ and ‘off-peak’, there are also ‘shoulder rates’, which usually apply between peak and off-peak periods and cost less than peak rates. 

Is Electricity Cheaper at Night?

It’s important to remember that whether electricity is cheaper at night will depend on the tariff you’re on. Those who use a lot of electricity during off-peak hours broadly have two options: Economy 7 offers seven hours per night of off-peak use, while Economy 10 offers ten. The savings can be big. An Economy 7 tariff’s peak rate will be up to 33% more expensive than someone with flat unit rates will pay under the Ofgem energy price cap. But off-peak rates can be as much as 50% cheaper, so shopping around is important. 

How to Determine Off-Peak Times

The first thing to remember is that weekends are always off-peak because factories and offices tend to be closed or running at a lower capacity at these times. Otherwise, while suppliers can set their day and night rates at whatever level they like, they must meet a weighted average unit rate calculated by Ofgem. 

This weighted average considers the proportion of energy a typical household uses in the day rate versus the night rate (58% in the day, 42% at night). Generally speaking, it’s considered that to benefit from Economy 7, you need around 40% of your electricity consumption to be used during off-peak hours. Since different providers may have slightly different definitions for ‘peak’ and ‘off-peak’, make sure to check with each provider specifically what theirs are and if you’re getting prices together to compare them. 

Tips for Utilising Off-Peak Electricity

There are practical things you can do to maximise the savings you can make by switching to a variable rate tariff. By doing so, you won’t only be saving money. You’ll also be reducing the strain on the National Grid, which is good for all of us as this can help to reduce the likelihood of outages during peak times. Obviously, businesses can’t change the hours they operate, but this doesn’t mean you can’t still improve your electricity usage. 

Remember That the Clocks Change Twice a Year

Most Economy 7 meters will not adjust automatically when the clocks go forward or back, and if you do nothing, you could end up paying more than you need to for your energy use as it may stray outside your supplier’s off-peak hours. Contact your supplier to check what you must do before the clocks next change!

Check Your Economy 7 Hours With Your Supplier

Off-peak times change from supplier to supplier, so make sure that you are absolutely certain of when the hours that apply to you are. You can do this by checking your bill - which will have a breakdown of peak versus off-peak usage - or by speaking to them. 

Be Strict With the Timings of Your Energy-Intensive Tasks

If your business has some more energy-intensive tasks than others, try to use them during the cheaper hours set out by your supplier. Charging up any battery packs or devices is also a good idea to ensure you use as little energy as possible during the day. But this comes with caveats. Safety is more important than anything else, so you shouldn’t leave energy-intensive tasks to run unattended because this could be a fire risk. 

Make Sure Your Meter’s Working Properly

You may also need to ensure your meter works as it should. If it’s faulty, you may not be benefiting from off-peak rates. One way to check this is to watch it at the start or end of your off-peak hours so you can double-check that the off-peak dial is the one that’s recording energy usage (you’ll see the numbers ticking up on the off-peak dial if it’s working properly).

Monitor Your Bills

If your day rate usage suddenly spikes, it may be because your meter is faulty, but potential faults can also come from elsewhere. If you’re concerned that your meter’s not functioning as expected, call your supplier immediately. That way, the problem shouldn’t cost you too much money. Also, remember that keeping a close eye on your bills is the best way to ensure that you are on the correct tariff in the first place. 

Invest in Energy-efficient Appliances or Equipment

This may not be possible for everyone because it could start getting expensive, but it’s certainly worth considering. Replacing your older appliances or equipment with newer and more energy-efficient alternatives may help you avoid being penalised by steeper Economy 7 peak rates. This is particularly true with appliances that must be left on all day, such as fridges and freezers.

Considering the savings that can be made, the benefits of the National Grid, and the possibility of changing your energy use to benefit the environment, switching to a variable tariff is certainly worth investigating. It may require a little work to get to the bottom of what benefits you can take from it, but even doing this will give you a better understanding of your electricity use, which can be the first step towards streamlining and modernising your energy use!