Time-of-use energy tariffs exist because electricity does not cost the same to produce at all times of day. For the right household, this can significantly reduce bills. For the wrong household, it can increase them.
Instead of one flat rate, electricity is split into time bands:
Each kilowatt-hour is charged at the rate that applies at the time it is used.
Time-of-use tariffs are fundamentally about timing, not consumption reduction.
This difference is why TOU tariffs can either outperform or underperform standard tariffs depending on behaviour.
Without a smart meter, time-of-use tariffs are generally unavailable.
Smart meters enable:
Installing one is usually a prerequisite for TOU tariffs.
Time-of-use tariffs require precise measurement of when electricity is used. This is only possible with a smart meter.
Precise time tracking
No manual reads
Pay for what you use, when you use it
7 hours cheap overnight electricity. Fixed off-peak window. Higher daytime rates.
Designed for: Storage heaters, immersion tanks
Flexible off-peak windows. Multiple pricing bands. Smart meter required.
Designed for: EVs, batteries, flexible homes
Extended overnight cheap windows. Designed for EV charging patterns.
Best for: Electric vehicle owners
Long cheap windows for battery charging. Avoids extreme peak pricing.
Best for: Homes with storage batteries
When high-usage activities move into cheap periods, overall cost drops even if peak rates are higher.
This is why TOU tariffs are not "cheap by default".
EV charging can be scheduled overnight, consuming large amounts during cheapest hours.
Store cheap off-peak electricity, use during expensive peak periods.
Designed to use electricity overnight, perfect for TOU.
Willing and able to shift appliance use consistently.
Low electricity usage, can't shift enough to justify peak rates.
Active mainly during early evening peak hours.
Routines don't accommodate overnight usage.
TOU tariffs unavailable without one.
Standing charges apply regardless of when electricity is used.
⚠️ Some TOU tariffs:
Comparisons must always include total annual cost, not just unit rates.
❌ Focus only on cheap rate
Ignore expensive peak pricing
❌ Overestimate shiftable usage
Be realistic about what you can move
❌ Switch without understanding bands
Know your cheap/peak windows
❌ Don't monitor actual usage
Check if you're actually shifting
Time-of-use tariffs reward behaviour. Without behaviour change, they fail.
Time-of-use tariffs often align with higher renewable generation overnight and lower-carbon electricity periods.
High wind generation, low carbon
Solar generation, medium carbon
Gas peakers, highest carbon
For environmentally conscious households, TOU tariffs can reduce both cost and carbon footprint when used correctly.
UtilityKing compares time-of-use tariffs using realistic usage splits, not assumptions.
Yes. Accurate time-based billing requires a smart meter. Without one, TOU tariffs are unavailable.
Economy 7 is one type of TOU tariff, but modern smart TOU tariffs are more flexible and precise.
Yes — if most of your usage happens during peak periods, the higher rates can outweigh off-peak savings.
Yes — TOU tariffs are one of the cheapest ways to charge at home, often 6p–10p per kWh overnight.
Some are fixed, others adjust pricing periodically. Always check tariff terms before switching.
Yes, but high peak rates may conflict with solar generation. Compare carefully for your specific setup.
Time-of-use energy tariffs are not for everyone — but for the right household, they are one of the most powerful tools for reducing electricity bills. In 2026, they are excellent for EVs, batteries, and flexible homes, but risky for passive or low-usage households.
⏰ TIME-OF-USE VERDICT
See whether smart pricing actually works for your home • Smart meter required • EV & battery ready