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 (7–10p/kWh) are ideal for charging EVs and running appliances, while peak rates (30–40p/kWh) are 4–5 times higher. Smart shifting can save £200–400/year.
Smart tariffs charge you different rates depending on when you use electricity. Most use three price periods: cheap off-peak (typically 11pm–7am or 12am–6am), standard daytime (7am–4pm), and expensive peak (4pm–10pm on weekdays). Off-peak electricity might be 7–10p/kWh while peak is 35–50p/kWh—a 4–5 fold difference. If you can shift just 20% of your usage to off-peak hours, you can save £100–200 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, 1–50p/kWh, real-time demand response), Octopus Cosy (warm off-peak window 3am–9am and 4pm–midnight, 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 most—a 7kW home charger running 8 hours nightly uses 56 kWh. Shifting from peak (35p/kWh = £19.60) to off-peak (7p/kWh = £3.92) saves £15.68 per charge. Dishwashers and washing machines (each 1.5–2 kWh per cycle) cost £0.37–0.70 at peak versus £0.11–0.14 off-peak—saving £0.25–0.55 per use. Tumble dryers (5 kWh per cycle) save £0.90 per load by shifting. A heat pump (uses 1.5–2 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 dispatch—you 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 easy—run energy-intensive appliances 11pm–7am or 10am–3pm (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 11pm–7am when wind generation is strong and demand is low. Peak periods (4pm–10pm) are when wind generation dips and demand spikes—grid operators must fire up expensive gas plants to keep up. By shifting your dishwasher or EV charging 8–12 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 rates—demand-side response is cheaper than building new power plants.
Smart Meter Requirement: Time-of-use tariffs require a smart meter to work—your 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 (7–12p/kWh) reflect periods of abundant wind generation and low demand (typically 11pm–7am, also 10am–3pm weekend). Peak rates (35–50p/kWh) reflect periods of high demand and wind scarcity (4pm–10pm weekdays). The price ratio (peak/off-peak, typically 4–5x) is calibrated to incentivize demand shifting while remaining commercially viable for suppliers. Economic theory predicts elasticity of ~−0.1 to −0.3 (1% price reduction causes 0.1–0.3% demand increase at that time), but response to ToU is much higher for controllable loads (EV charging 2–4x 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: 1–50p/kWh (2p/kWh on windy, low-demand Sundays; 50p+ on peak winter Fridays). Average annual price tracks market average (~15–18p/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 5–20 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 10–20% commission.
Price Structure Economics: Supplier margin structure on ToU tariffs is typically: Off-peak: cost + 1–2p/kWh margin. Peak: cost + 8–15p/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 aggregators—store 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 3–4 means heating cost is 1/3–1/4 of resistance heating. Combined with ToU, a heat pump running 3–5 hours during off-peak (e.g., 2–6am at 7p/kWh) precharges 40–60°C water tanks, providing all-day heating via thermal storage. Overnight heating cost: 7 kWh × 7p = 49p. Same heat via daytime peak: 7 kWh × 35p = £2.45. Saving: £1.96/night, £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, 2023–2024) 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.