Economy 7 is an electricity tariff with two different rates: a cheaper off-peak rate for seven hours, usually overnight, and a higher rate for the rest of the day.
It can suit homes that can shift a large share of electricity use into the cheaper night period. It can be poor value if most electricity is used during the higher daytime rate.
How Economy 7 works
An Economy 7 meter records daytime and night-time electricity separately. Your supplier then charges one unit rate for off-peak electricity and another for peak electricity.
Ofgem says Economy 7 could help if you use more electricity at night, for example for electric storage heaters or to charge an electric vehicle.
Economy 7 cost =
daytime kWh × day unit rate
+ night kWh × night unit rate
+ standing charge
Who Economy 7 may suit
Economy 7 works best when a large share of electricity use can happen during the cheaper seven-hour window.
- Homes with electric storage heaters that charge overnight.
- Homes with an immersion heater timed for off-peak hours.
- Electric vehicle owners who charge mainly overnight.
- Households that can run high-use appliances during off-peak hours safely.
- Homes where daytime electricity use is relatively low.
When Economy 7 can cost more
Economy 7 normally has a higher daytime rate than a single-rate tariff. If you use most of your electricity during the day, the higher rate may cancel out the off-peak saving.
| Usage pattern | Economy 7 impact | What to check |
|---|---|---|
| High overnight use | May work well. | Night kWh share and night unit rate. |
| High daytime use | May cost more. | Day unit rate vs single-rate tariff. |
| Storage heaters removed | May no longer suit the home. | Whether you still use enough off-peak electricity. |
Economy 7 and storage heaters
Energy Saving Trust explains that Economy 7 is a common dual-rate tariff used with electric storage heaters. These tariffs provide a cheaper rate during a certain period, usually overnight, when storage heaters can charge.
Storage heaters then release heat gradually during the day. This can work well if the heaters are used correctly and the home is suited to that pattern.
When are Economy 7 off-peak hours?
Economy 7 gives seven cheaper off-peak hours, usually overnight, but exact times can vary by supplier, region, meter setup and clock changes. Always check your own tariff details.
Do not assume “midnight to 7am” applies to every home. Your bill, supplier account or meter information should show the correct day and night-rate periods.
How to compare Economy 7 with a single-rate tariff
To compare Economy 7 properly, you need your annual day and night kWh usage, not just the headline night rate.
| Compare | Economy 7 | Single-rate tariff |
|---|---|---|
| Usage | Separate day and night kWh. | Total electricity kWh. |
| Rates | Day rate and night rate. | One electricity unit rate. |
| Risk | High day use can be expensive. | Less benefit from shifting use overnight. |
Estimate the appliance side
Use the electricity calculator to check which appliances could realistically move to off-peak hours.
Economy 7 vs newer time-of-use tariffs
Economy 7 is an older form of time-of-use electricity pricing. Newer smart tariffs may have different off-peak windows, EV charging periods or flexible rates, but they usually need a compatible smart meter.
Economy 7 can still be relevant, especially for storage-heater homes, but it is worth comparing it with newer options if you have a smart meter, EV, battery or flexible electricity use.
What to check before choosing Economy 7
- What percentage of your electricity is used overnight?
- What are the day and night unit rates?
- What is the standing charge?
- Are storage heaters or immersion heaters set to charge overnight?
- Can you safely move appliances to off-peak hours?
- Would a single-rate tariff be cheaper overall?
- Do the off-peak hours match your actual household routine?
FAQs
What is Economy 7?
Economy 7 is a two-rate electricity tariff with seven cheaper off-peak hours, usually overnight, and a higher rate at other times.
Is Economy 7 cheaper?
It can be cheaper if you use enough electricity during off-peak hours. It can cost more if most usage happens during the higher daytime rate.
Do I need storage heaters for Economy 7?
No, but Economy 7 is often associated with storage heaters because they can charge overnight on cheaper electricity.
Are Economy 7 hours always midnight to 7am?
No. Exact off-peak times vary, so check your supplier, meter and tariff details.