Economy 7 gives you cheaper electricity for seven hours, usually overnight.

That sounds attractive.

But the electricity you use during the remaining 17 hours is normally charged at a higher day rate.

So whether Economy 7 is cheaper than a single-rate tariff depends on something very specific:

How much of your electricity do you actually use during the Economy 7 off-peak period?

For one household, Economy 7 could produce a substantial saving.

For another household using exactly the same amount of electricity, it could cost more.

The difference is when the electricity is used.

What is Economy 7?

Economy 7 is a type of multi-rate electricity tariff.

Instead of paying the same unit rate throughout the day, you typically receive:

7 hours of cheaper off-peak electricity

and:

17 hours at a higher day rate.

Ofgem says the cheaper period is usually overnight — often around midnight to 7am — but the precise hours depend on your supplier, tariff and location.

Citizens Advice also warns that the hours can change when the clocks change.

So before comparing Economy 7 tariffs, check the actual off-peak hours applying to your tariff.

Economy 7 isn't automatically cheaper because it has a night rate

This is the central issue.

Imagine you're choosing between these hypothetical tariffs:

Single-rate tariff

25p/kWh all day

Economy 7 tariff

32p/kWh day rate

12p/kWh night rate

The Economy 7 night rate is less than half the day rate.

But that doesn't make Economy 7 automatically cheaper.

Every kWh used at night saves money compared with the 25p single rate.

Every kWh used during the day costs more.

We need to know which effect is greater.

Let's use a household consuming 4,000 kWh a year

Suppose annual electricity consumption is:

4,000 kWh

On the single-rate tariff:

4,000 × £0.25 = £1,000

We'll initially ignore standing charges so that we can see the effect of the two unit rates clearly.

Our benchmark is therefore:

£1,000 per year

Now let's change how much electricity the household uses during Economy 7 hours.

What if 20% of electricity is used at night?

20% of 4,000 kWh is:

800 kWh night usage

That leaves:

3,200 kWh day usage

Economy 7 cost:

800 × £0.12 = £96

3,200 × £0.32 = £1,024

Total:

£1,120

Compared with the £1,000 single-rate tariff:

Economy 7 costs £120 more

Despite the 12p night rate.

What if 30% is used at night?

Night:

1,200 kWh × 12p = £144

Day:

2,800 kWh × 32p = £896

Total:

£1,040

Economy 7 is still:

£40 more expensive

We're getting closer, but it hasn't reached break-even.

What if 35% is used at night?

Night:

1,400 kWh × 12p = £168

Day:

2,600 kWh × 32p = £832

Total:

£1,000

Now the two tariffs cost exactly the same.

We've found the break-even point:

35% night usage

With these particular rates:

Below 35% at night → single rate is cheaper

Above 35% at night → Economy 7 is cheaper

That is much more useful than simply knowing that Economy 7 offers electricity for 12p/kWh overnight.

How did we calculate the 35%?

We can use the break-even formula from our guide to how much electricity must be used off-peak for a time-of-use tariff to be cheaper.

The rates are:

Single rate = 25p

Economy 7 day rate = 32p

Economy 7 night rate = 12p

So:

Break-even night proportion =
(Day rate − Single rate) ÷ (Day rate − Night rate)

Therefore:

(32 − 25) ÷ (32 − 12)

= 7 ÷ 20

= 35%

So 35% of this household's electricity must be used during the Economy 7 night period for the two tariffs to cost the same.

Below 35% night usage → single rate is cheaper

Above 35% night usage → Economy 7 is cheaper

But it isn't a universal Economy 7 threshold.

There is no single Economy 7 break-even percentage

You may hear rules of thumb about how much electricity needs to be used overnight for Economy 7 to make sense.

They can be useful as rough guidance, but they shouldn't replace the calculation.

Why?

Because Economy 7 rates vary.

Ofgem itself says available peak and off-peak rates vary and consumers should compare the available deals.

Imagine another Economy 7 tariff offered:

30p day

15p night

against the same:

25p single rate

The break-even percentage becomes:

(30 − 25) ÷ (30 − 15)

= 5 ÷ 15

≈ 33%

Change the rates and the answer changes.

So the right question isn't:

“What percentage do you need for Economy 7?”

It's:

“What percentage do you need for this Economy 7 tariff compared with this single-rate tariff?”

What happens if 50% of your electricity is used at night?

Return to our original rates:

25p single rate

versus:

32p day / 12p night

With 4,000 kWh annual consumption and 50% used overnight:

Night:

2,000 × £0.12 = £240

Day:

2,000 × £0.32 = £640

Total Economy 7 cost:

£880

Single-rate cost:

£1,000

Estimated Economy 7 saving:

£120 per year

Now Economy 7 is clearly cheaper.

Again, the tariff hasn't changed.

The household's consumption pattern has.

Who is Economy 7 particularly suited to?

Economy 7 has traditionally been associated with electrically heated homes, particularly those using storage heaters.

Storage heaters can charge using cheaper overnight electricity and release the stored heat later.

Ofgem specifically identifies storage heating and overnight EV charging as examples where Economy 7 may save money.

Citizens Advice similarly says time-of-use tariffs can work well for households that need more electricity overnight.

Other substantial overnight loads might include:

electric water heating

EV charging

home-battery charging

and some appliances that can safely be scheduled.

The crucial feature isn't owning a particular appliance.

It's having enough electricity consumption that can genuinely occur during the cheaper hours.

Storage heaters can completely change the calculation

Consider two otherwise similar households.

Both consume:

4,000 kWh/year

Household A heats primarily using gas and uses most electricity during the daytime and evening.

Household B uses electric storage heaters that charge overnight.

Their annual electricity totals could be identical.

But Household B may have a much larger proportion of electricity recorded at the Economy 7 night rate.

That could make Economy 7 cheaper for Household B while the single-rate tariff remains cheaper for Household A.

This is why annual consumption alone isn't enough for an Economy 7 comparison.

You need to know how that consumption divides between:

day kWh

and:

night kWh.

How can you find your current day and night usage?

If you're already on Economy 7, your bill should normally show separate day and night rates or consumption information.

Citizens Advice says time-of-use customers will generally see two or more unit prices and two or more sets of meter readings on their bill.

A two-rate meter may similarly maintain separate registers for cheaper and standard-price electricity.

That historical information can be extremely valuable.

Rather than guessing:

“I probably use quite a lot at night.”

you can calculate your actual proportion.

For example:

Annual day usage:

2,400 kWh

Annual night usage:

1,600 kWh

Total:

4,000 kWh

Night percentage:

1,600 ÷ 4,000 × 100

= 40%

You can then compare that 40% with the break-even percentage of the tariffs you're considering.

What if your bill only gives total annual consumption?

Your total annual kWh is still useful, but it doesn't tell the whole Economy 7 story.

As we explain in Where to find your annual energy usage on your electricity and gas bill, annual consumption gives you the quantity of electricity used.

For Economy 7, you ideally need another layer:

how much was day usage and how much was night usage?

If your bill doesn't make that clear, check your online account, smart-meter information or ask your supplier for the split.

Don't assume seven cheap hours means 29% of your electricity will be cheap

Seven hours is about 29% of a 24-hour day, but electricity consumption isn't distributed evenly across every hour.

The percentage of time that is off-peak is not the same as the percentage of electricity you consume off-peak.

There are seven off-peak hours in a 24-hour day.

Mathematically:

7 ÷ 24 ≈ 29%

But that does not mean 29% of your electricity will automatically be charged at the night rate.

Electricity consumption isn't evenly distributed across every hour.

A household may use very little electricity while everyone is asleep.

Another household may deliberately charge storage heaters, an EV and a battery overnight.

So the proportion of hours that are off-peak and the proportion of electricity consumed off-peak are completely different things.

That's an important distinction.

An EV can push you beyond the break-even point

Suppose a household currently uses:

3,000 kWh/year

with:

600 kWh at night

That's:

20% night usage

which would be below our hypothetical 35% Economy 7 break-even point.

Now the household buys an EV and adds:

2,000 kWh/year

of overnight home charging.

New totals:

5,000 kWh total

2,600 kWh night

Night proportion:

2,600 ÷ 5,000 = 52%

The household's electricity profile has changed dramatically.

Economy 7 could suddenly become considerably more attractive.

This is closely related to the calculation in Is an EV energy tariff actually cheaper for your household?

But it also demonstrates why tariff choice should change when household circumstances change.

A home battery can change it too

A battery may allow electricity to be purchased during Economy 7 hours and used later.

That could increase the proportion of grid electricity purchased at the night rate while reducing daytime grid consumption.

But battery efficiency, capacity, household demand and any solar generation also need to be considered.

So again, the headline Economy 7 rate isn't enough.

Standing charges can move the break-even point

So far we've assumed the two tariffs have identical standing charges.

Real tariffs may not.

Suppose Economy 7 has a standing charge that's:

5p/day higher

than the single-rate tariff.

Annual difference:

£0.05 × 365 = £18.25

Economy 7 must now recover that additional £18.25 through cheaper night electricity before it genuinely becomes the cheaper tariff.

This is why our comparison of energy unit rates vs standing charges matters here too.

The complete tariff needs to be compared.

Check the exact Economy 7 hours

Don't assume every Economy 7 tariff runs from exactly midnight to 7am.

Ofgem says the precise period varies according to location and supplier.

Citizens Advice also notes that the cheap period can move when the clocks change.

That matters if you're scheduling:

storage heaters

EV charging

hot water

or:

battery charging.

Being one hour outside the cheap window could materially alter the cost.

A safety point about shifting appliance use

Moving electricity consumption overnight can save money, but not every appliance should simply be scheduled while you're asleep.

Citizens Advice specifically advises against running washing machines, tumble dryers and dishwashers while you're asleep because of fire risk.

The aim should be to shift suitable consumption, not blindly move every electrical load into the night period.

What about the energy price cap?

Economy 7 customers can still be covered by the energy price cap when they are on applicable default tariffs.

But multi-rate electricity is not represented by one universal national Economy 7 unit rate.

Ofgem explains that single-rate customers pay the same unit rate throughout the day, whereas multi-rate tariffs such as Economy 7 have different peak and off-peak rates.

And actual costs depend on factors including consumption, location and meter type.

So comparing an Economy 7 offer against a single headline price-cap electricity rate can be misleading.

You need to compare the appropriate tariff structure.

Should you switch from Economy 7 to a single-rate tariff?

If you already have Economy 7, start with your actual usage.

Find:

annual day kWh

annual night kWh

Then calculate:

night kWh ÷ total kWh × 100

That gives your current night-use percentage.

Next compare it with the break-even percentage for the Economy 7 and single-rate tariffs available to you.

If your actual night usage is comfortably above break-even, Economy 7 may be attractive.

If it is substantially below break-even, a single-rate tariff may deserve serious consideration.

Citizens Advice similarly says that people who don't need to use electricity overnight may save money by moving to a single-rate tariff, although customers should check meter and tariff compatibility with their supplier before switching.

Economy 7 isn't good or bad — it depends on your usage

This is the most useful way to think about it.

Economy 7 isn't inherently:

cheap

or:

expensive.

It is a pricing structure.

Whether that structure works for you depends on:

the day rate

the night rate

the single-rate alternative

your standing charges

and, critically:

your day/night consumption split.

For our worked example:

25p single rate

versus:

32p day / 12p night

the break-even point was:

35% night usage

That gives the household something concrete to compare against its own electricity consumption.

Eventually, comparison should calculate this automatically

Economy 7 illustrates another limitation of comparing tariffs using headline prices alone.

Two customers could each use:

4,000 kWh/year

but have completely different day/night consumption patterns.

One could save on Economy 7.

The other could pay more.

A household-specific comparison should therefore be able to recognise a multi-rate tariff, identify the relevant day and night consumption where available, and calculate what competing tariff structures would cost using the same household profile.

That's the direction Likewise Compare is being built around:

not asking whether Economy 7 is cheaper in general

but:

whether Economy 7 is cheaper for your household.

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