Cheapest Time To Use Electricity in the UK: How to Cut Energy Costs Daily

Electricity prices show little sign of falling much for the time being, so it’s well worth thinking about how you can change your electricity habits to save money.

Right now, your only option for cutting costs via off-peak electricity is by taking advantage of time of use tariffs. These are basically electricity plans where you’ll pay less for the electricity you use at certain times of the day.

We’ll explain these time of use tariffs in more detail in this article (including which energy suppliers offer them), as well as explaining why electricity is cheaper at different times of the day, when electricity is at its cheapest, how you can make the most out of off-peak electricity, and what you can do to shrink electricity costs even outside of off-peak hours.

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Key Points:

• Electricity is typically cheapest between 12am and 6am.

• You can only take advantage of off-peak electricity with time of use tariffs.

• You’ll need a smart meter to get a time of use tariff.

• Not all suppliers offer time of use tariffs, so it's best to contact them to check if they do.

• Shifting your electricity usage can save you hundreds of pounds each year.

• Electricity prices on flexible tariffs can change each day.

Why Does the Cost of Electricity Change Throughout the Day?

Almost all of the electricity produced in this country comes from wholesale generators, which typically use either gas or wind power (solar farms in the UK are catching up however). These generators sell the electricity they produce to suppliers (at a standardised price), who then sell it back to you, the customer.

What suppliers pay for electricity fluctuates throughout the day, as naturally there’ll be spikes and dips in demand.

How suppliers make money from electricity is by predicting what wholesale electricity will cost overall for the next few months or so. They’ll then charge you a flat rate so they can make a profit, or they’ll rely on the rate set by Ofgem and simply charge the maximum they’re allowed.

Currently, the only way you as an individual can take advantage of cheaper, off-peak electricity is by opting into a time of use tariff.

Time of use tariffs include off-peak and peak pricing, so you’re encouraged to use your most demanding appliances when electricity is at its cheapest.

When Is Electricity at Its Cheapest in the UK?

Electricity is at its cheapest during the night – specifically, between 12am and 6am when the UK’s electricity usage is at its lowest.

Energy suppliers will typically take advantage of these low-use times to buy electricity when its cost is lower, and you can take advantage too with the right time of use tariffs.

A time of use tariff will traditionally come with set off-peak and peak time slots for electricity usage. For example, using electricity between 12am and 6am (off-peak hours) might cost 17p per kilowatt hour (kWh), then 34p per kWh from 5pm to 8pm (peak hours), and 23p per kWh for the rest of the day.

Flexible tariffs, on the other hand, have prices that fluctuate depending on the current cost of wholesale electricity.

When Is Electricity at Its Most Expensive in the UK?

Peak electricity times are usually between 5pm and 8pm, when most people are getting back from work to switch on their appliances. This puts a big strain on the grid to meet this demand and electricity prices are subsequently higher than during off-peak periods.

Generally, if you’re on a time of use tariff, this is when you’ll spend the most per kWh for your electricity. And if you can avoid using appliances with high energy demands during this time, such as kettles and washing machines, you’ll save money.

What Makes Nighttime the Best Time To Use Electricity?

Nighttime is the best time to use electricity simply because less of the country is using it. Most people past midnight have switched off their lights, their dishwashers, and TVs, and gone to bed.

Also, large-scale industrial and commercial setups will have paused for the day too, which relaxes a huge drain on the grid. According to government statistics, industry and businesses in the UK use 59% of all energy consumed in the country.

This big drop in demand makes electricity a lot cheaper, which is taken into account when suppliers buy electricity from generators in advance.

UK households though, will only benefit from this cheaper electricity if they’re on a time of use tariff. Otherwise, households will pay whatever their energy supplier has chosen to charge.

Also, your time of use tariff must come with a nightly off-peak period. Otherwise you might not get the maximum benefit from using electricity when it’s at its cheapest!

How Can You Make the Most Out of Off-Peak Electricity?

You’ll make the most out of off-peak electricity if you shift the bulk of your usage to these times.

For example, doing your washing at nighttime can save a good deal of money, because appliances like washing machines use a lot of electricity. This might sound easier said than done (not everyone wants to be doing their washing at 3am), but many modern washing machines, tumble driers, and washing machines now have timers, so you can choose when you want them to start.

If you have an EV charger for your electric car, you can set it to charge during off-peak periods only. Electric cars require a lot of electricity to fully charge, so doing when electricity is cheapest is a great way to save money.

Other, smaller steps you can take is to get “smart strips” for your devices, such as TVs and computers. Smart strips will automatically cut the power to devices connected to them during times you can set with your phone. It won’t mean massive savings, but it’ll be better than not using a smart strip for sure.

Will You Save Much Money With Off-Peak Electricity?

Avoiding using your most demanding appliances during peak times could save you several hundred pounds a year.

This is especially true if you’re using energy-thirsty appliances such as heat pumps and electric vehicles, but even if you just avoid using the kettle during peak demand, you’ll save a surprising amount each year.

A tip to consider is to monitor your energy usage with your smart meter. You can use it to see when you're using the most energy, and whether this aligns with peak times. Then, armed with this knowledge, you can shift your electricity usage to times when costs are lower.

Getting a smart meter alone won’t save you money, but by using the knowledge it gives you, you can.

Energy Suppliers Currently Offering Time of Use Tariffs

Thinking of switching to an energy supplier offering a time of use tariff? Here’s a list of the suppliers in the UK currently offering time of use tariffs:

• Octopus

• British Gas

• OVO Energy

• 100Green

• Ecotricity

• Scottish Power

• EDF

• E.ON

• Good Energy

Several of the suppliers above actually provide off-peak electricity to all customers, which is pretty great. Others only offer time of use tariffs to households using appliances such as heat pumps, electric cars, electric boilers, and storage heaters.

If your home is heated electrically, you’ll be pleased to learn that every domestic energy supplier offers an Economy 7 tariff. An Economy 7 tariff gives homeowners seven hours of off-peak electricity a day, so if you have an electric boiler or heat pump, this is the time to heat your radiator and water.

A top tip before you pick a supplier, call a few companies because they change the off-peak tariffs on offer pretty frequently.

Several of the suppliers in the list above made it into our greenest energy suppliers in the UK article, if you’re curious about choosing a supplier with a greater focus on sustainability.

How Do You Know if You’re Eligible for a Time of Use Tariff?

The majority of UK households are eligible for a time of use tariff.

You only need to be connected to the electricity grid and own a smart meter. The smart meter is necessary because it needs to communicate with its national network, so it can tell your supplier when you’re using electricity. That way, your supplier will know when to charge you the reduced rate included in your time of use tariff.

To qualify for an Economy 7 tariff, you’ll need either a smart meter or an Economy 7 meter.

Are There Downsides to Time of Use Tariffs?

Before jumping onto a time of use tariff, be aware of the pros and cons:

Pros:

• Potential for big savings if you use electricity primarily during off-peak hours.

• Specific time of use tariffs can be excellent for electric vehicle owners, who can charge their vehicles when electricity is at its cheapest.

• The same is true if you own battery storage, as you can charge it during off-peak hours.

• You’ll learn to be more mindful of your energy usage, which is great for bills, and the planet.

Cons:

• Your bills could actually be higher than normal tariff users if you mostly use electricity during peak demand (5pm to 8pm).

• Switching to a time of use tariff means having to change your electricity usage habits.

• You need to own a smart meter, which might not be possible for some houses (particularly rural properties).

• Flexible tariffs can add complexity to daily life. As rates can fluctuate daily, you’ll need to be on your toes to adapt when you use electricity.

What Are the Alternatives to a Time of Use Tariff?

One alternative to the traditional time of use tariff (where off-peak periods are static and set in stone), is something like Agile Octopus. This tariff has rates that shift regularly, according to whatever the current wholesale prices are.

You’ll be told what the rates are at the beginning of the day, so you can adjust your electricity usage and aim to use your demanding appliances when electricity is cheapest.

But if this sounds confusing, there’s nothing wrong with sticking to the tried-and-tested time of use tariff. You’ll still save money with one by using electricity during off-peak hours. Just be aware that you might not be able to maximise the potential savings on your energy bills with a static time of use tariff.

Intelligent Octopus Flux, for example, charges you the same for grid electricity that it pays you for exporting via the Smart Export Guarantee.

This gives you the option to export electricity when demand is highest, allowing you to make more money, and use grid electricity when it’s at its cheapest. Pretty smart right?

Electric vehicle owners can get specific time of use tariffs too, though typically these tariffs are limited to static time periods, like most ordinary time of use tariffs. The only exception is Intelligent Octopus Go, which works to guarantee your car is only charged during off-peak hours, when electricity is cheapest.

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