Can you time your way to cheaper, greener energy bills?

If the future is electric, we need a more strategic approach to saving money – as well as the planet

Time-of-use tariffs allow consumers to make smarter – and more environmentally friendly – decisions about their energy use (PA Wire)

You’ve ditched the gas cooker and your old boiler is going the same way. Like the rest of the country, your next car will be electric, if it isn’t already.

Which probably means that while you’re doing your bit to get us all closer to net zero, your electricity bill seems to be rising in line with global temperatures – even with all those new energy-saving light bulbs.

Enter the time-of-use (TOU) tariff, the latest strategy to help balance out energy demands as the shift from fossil fuels to renewables continues, while keeping a lid on consumer costs by incentivising us to use our energy at off-peak times by charging us less.

But if the words “Economy 7” have just popped into your head, push them away. The Economy 7 tariff was designed to encourage people to charge storage heaters at night using otherwise wasted energy from power stations, which couldn’t turn down the dial just because no one was plugging in at 2am.

Unlike Economy 7, TOU tariffs use several different rates, rather than a single overnight cost. So, will it be worth it?

There are two types of TOU tariff. A static option offers several different rates for your energy, depending on the time of day. In general, electricity will cost you more on weekday evenings than it does at the weekend, during the day and in the middle of the night.

If you don’t yet have an electric car or heating, Citizens Advice calculates that the savings on a static TOU tariff with fixed costs at different times of day would be modest – around £19m per year, or £5 per household. That’s if you make no behavioural changes, such as putting your washing on, updating your laptop or downloading box sets at night.

With a dynamic TOU tariff, however, the cost of your energy will change day by day in response to wholesale prices. And with the shift towards renewables, that could mean a significant saving if you charge your EV, say, on a night when it’s blowing a gale and all those wind turbines are going like the clappers.

The only issue is that while the number of TOU tariffs is expected to rise, there are very few around right now.

Elsewhere, technology that sifts through the minute details of our energy consumption to help us use it smarter and more cheaply appears to offer far greater savings – and not just financial ones – as more people adopt domestic energy generators, such as solar panels.

One trial funded by the Department for Business, Energy and Industrial Strategy seems to suggest that households could save an average of 49 per cent on their annual energy bills while cutting their carbon footprint by 14 per cent by using smart meter data to make the most of both sources.

Using software developed by tech firm geo and existing domestic smart meters, the home’s energy needs across car charging, heating, hot water and other demands are forensically assessed to balance energy supplied by the retailer, stored energy and self-generated energy, to minimise waste, costs and carbon emissions.

Households will have to become even more engaged with their energy usage and familiar with new concepts

Justina Miltienyte

Justina Miltienyte, energy policy specialist at Uswitch.com, said: “No two customers are the same in how they use energy, whether they have different working patterns, home routines, or a specific interest in new technologies.

“Households will have to become even more engaged with their energy usage and familiar with new concepts such as time-of-use tariffs, electric vehicles and eco-friendly boilers. There is a lot of work still to do for the industry to bring everyone along the journey to net zero, but consumers must be supported in this transition and given the freedom to make their own decisions about their energy usage.”

There’s only one problem with all of these innovative, cost- and carbon-saving solutions. They rely on smart meters, the roll-out of which has been a bit of a shambles. Less than half of the UK’s households have one, and many of those aren’t operating properly because so few tariffs will allow you to use your existing smart meter when you switch.

“Smart meters will play an important role in the UK’s transition to net zero, but they can also offer practical value to consumers, preventing the need for meter readings and providing far more accurate bills,” adds Miltienyte.

“Providers and Ofgem both have a crucial role to play in encouraging people to pay more attention to their energy usage, to prepare them for the changes ahead.

“But it will now be an uphill battle for suppliers to install smart meters for the 56 per cent of customers who still have a traditional meter by 2025.

"What is more concerning is that there are still over four million smart meters in UK homes operating in ‘dumb mode’.

“It’s a matter of priority that these meters are upgraded and added to the network, so that they regain functionality.”