When Barbara Greenwood, a member of Crediton u3a Energy Saving Group, bought an electric vehicle in 2020 she discovered there was a special tariff for EV users. This prompted her to look more closely at her energy bills and to make a shocking discovery. Here she reports on the changing world of meters and tariffs and offers some advice on how to cut your costs.
Back in 2020, my attitude to energy tariffs and bills was the same as most people’s: when the quarterly statement came I would give it a quick glance, note whether the direct debit had gone up or down, then file it and forget about it. I had no idea how much gas or electricity we used, whether our usage was above or below average, or how much we paid per unit.
A special tariff for EV users
Things began to change when I bought my first EV (electric vehicle) in November 2020 and discovered there was a special tariff for EV users, which offered 4 hours per night when the electricity was only 5p/kWh – although more expensive the rest of the time. The idea is that you use a timer to charge the car during those hours, bringing your running costs right down. But of course, if you don’t know what you pay for electricity at the moment, you have no idea whether that is bad or good. So I went to look.
This was my first shock – our house was on an Economy 7 meter and we were paying 11p for 7 hours at night, and 17p during the day. Given where prices are now, I would jump at those rates! At the time, the standard variable tariff was less than 15p – but we were paying more than that all day long, in a house which had only ever had gas central heating.
Economy 7 was invented to use up excess electricity overnight and was intended for houses with storage heaters. These heat up using the cheap rate overnight, then release heat into the house during the day. But there seems to have been a fashion in the 60s and 70s for putting Economy 7 meters in even when the house did not have storage heaters.
Check your electricity tariff
So my first tip is – check your electricity tariff. Are you on an economy 7 tariff, with separate day and night rates? If you are, but you don’t have storage radiators, or any other high-use appliances which can make use of the cheap rate, you will almost certainly be better off switching to the standard variable tariff, where the rate is the same all the time.
Both standard variable and Economy 7 tariffs are covered by the Ofgem price cap, which is reviewed once a quarter. If you are on Economy 7, your bill will show you how many kWh (units) of electricity you used at the day rate, and how many at the night rate. You can then work out the average price you paid per kWh over the relevant period. Compare this with your supplier’s standard variable tariff, and you should be able to see which works out cheaper for you.
Time-of-use tariffs
In order to take advantage of time-of-use tariffs, other than Economy 7, you need a smart meter. Smart meters measure the amount of gas or electricity you use in exactly the same way as conventional meters. The difference is that they record the usage every 30 minutes, and transmit this information to your supplier along with the traditional ‘meter readings’. This means that bills should be accurate (no more estimated readings or crawling under the stairs to read the meter).
In addition, suppliers have the option of offering tariffs in which the price you pay changes throughout the day. It then becomes possible for customers to cut their bills by shifting usage into cheaper times. That helps the National Grid to keep things balanced in times of high demand.
Agile and Tracker tariffs
One supplier has taken time-of-use tariffs to another level. Their Agile tariff, which is only for electricity, has a price linked to the wholesale market, which changes every 30 minutes during the day. If you can switch as much of your electricity use as possible out of the peak period of 4-7pm, you can potentially make a considerable saving. There is also a tariff for both gas and electricity, called Tracker, in which the price changes daily but is the same all day long.
Since the beginning of 2023, people on the Tracker tariffs have saved 30-50% compared to being on the standard variable tariff. However, both Agile and Tracker come with a health warning: they are NOT covered by the Ofgem price cap, so if wholesale rates rise, then they could become significantly more expensive.
But you are not tied into these tariffs. If you are willing to keep an eye on the prices, you could save hundreds of pounds a year with these tariffs – my own mother has been on Tracker for both gas and electricity in her typical 3-bed semi, and has saved £1,000 over the past year.
To summarise:
- Know what sort of meters you have: conventional, Economy 7, or smart.
- Know how many kWh of electricity and gas you use each year.
- Know how much you are paying per kWh and as your standing charge.
- When considering a time-of-use tariff, know when you use most of your electricity and consider to what extent you could switch your usage to different times of day.
