Business Energy Glossary
What are day and night rates?
Day and night rates are a two-rate electricity tariff structure that charges different unit rates depending on the time of day. The day rate applies during normal daytime hours; the night rate applies during a defined overnight window, usually 7 or 10 hours long. Night rates are typically 30 to 50 per cent lower than day rates. The structure is used to encourage consumption away from peak demand periods and to give customers with overnight loads a cheaper rate.
Day and night rates require a specific meter type that records consumption separately in two registers. The most common implementation is Economy 7, with a 7-hour night rate window. Other variants include Economy 10 (10 hours split across the day) and Economy 9 (now rare). The choice of tariff depends on what the site is using energy for and when.
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How day/night rates work
A day/night rate is an electricity tariff with a lower unit rate during a set overnight window and a higher rate during the day. It suits sites that use a large share of their electricity at night, and needs a meter that records the two periods separately.
For the full explanation, see Understanding business electricity bills.
A day/night rate contract has two unit rates instead of one. The meter records consumption in two separate registers: a day register that accumulates kWh used during daytime hours, and a night register that accumulates kWh used during the defined night window. Each register is charged at its respective unit rate on the bill.
The night rate window is fixed by the meter time switch configuration, set when the meter was installed. The exact hours vary by region and supplier but typically fall in a window like 00:30 to 07:30 or 23:30 to 06:30. The customer cannot change the hours without a meter visit.
The main variants
| Tariff | Night hours | Day hours |
|---|---|---|
| Economy 7 | 7 hours overnight, typically 00:00-07:00 or similar | 17 hours covering the rest of the day |
| Economy 10 | 10 hours split: 7 overnight + 3 afternoon (typically 13:00-16:00) | 14 hours covering the rest |
| Two-rate (HH) | Defined off-peak hours, often 23:00-07:00 weekdays plus weekends | Peak hours during the working week |
Economy 7 is the most common multi-rate domestic and small business tariff. Economy 10 is less common, originally designed for storage heating systems that benefit from a midday top-up.
Where the savings come from
The night rate is lower because:
- Wholesale electricity is cheaper at night. Overnight demand is lower than daytime demand, so generators are competing harder for fewer customers, and wholesale prices fall.
- Network charges are lower at night. DUoS green-band hours coincide with the night window. Network costs are concentrated in the daytime red and amber bands.
- The customer commitment to consume at night supports system balancing. Overnight consumption helps absorb baseload nuclear and wind generation that would otherwise need to be curtailed.
For a business with significant overnight consumption (cold storage, server rooms, EV charging), the savings can be material. For a business with little or no overnight consumption, the higher day rate often outweighs the savings on small night consumption.
Meter requirements
A day/night tariff requires a two-register meter or a smart meter capable of multi-rate reporting. The most common physical meter types are:
- Two-register electromechanical meter. Older installations. Two separate dials, one for day, one for night.
- Two-register electronic meter. Modern equivalent with digital display showing both registers.
- SMETS2 smart meter. Can be configured for multi-rate operation, with the registers reported remotely to the supplier.
A site with a single-register meter cannot use a day/night tariff without a meter change. The supplier arranges the meter change as part of the contract setup, usually at no cost to the customer.
When day/night rates suit a business
Day/night rates work well for businesses where:
- A substantial proportion of consumption (typically more than 25 per cent) happens during the night window.
- Operations can shift discretionary loads (water heating, EV charging, batch processes) into the night window without cost or disruption.
- The night rate discount is large enough to outweigh the higher day rate on the rest of the consumption.
Common candidate sites include hotels (overnight HVAC and water heating), cold storage warehouses (24/7 cooling), data centres (24/7 server load), small manufacturing with overnight batch processing, and care homes (overnight heating and lighting).
Comparing day/night against single-rate
The fair comparison is the projected total bill at expected day and night consumption split:
| Component | Single rate | Day/night (Economy 7) |
|---|---|---|
| Day kWh (17,000) | 17,000 × 28 p = £4,760 | 17,000 × 30 p = £5,100 |
| Night kWh (8,000) | 8,000 × 28 p = £2,240 | 8,000 × 16 p = £1,280 |
| Total energy | £7,000 | £6,380 |
In this example, the site uses 32 per cent of consumption at night, which is enough to make Economy 7 cheaper despite the higher day rate. A site using only 10 per cent at night would find single-rate cheaper. The cross-over depends on the actual rates and the consumption split.
day and night rates FAQs
What are day and night electricity rates?
A two-rate tariff structure that charges a higher unit rate during the day and a lower rate at night. The most common version is Economy 7 with a 7-hour overnight night rate.
How much cheaper is the night rate?
Typically 30 to 50 per cent lower than the day rate. The exact discount varies by supplier, region, and contract. Day rates on a two-rate tariff are also typically slightly higher than the equivalent single rate to compensate.
When does the night rate apply?
During a defined overnight window set by the meter time switch. The exact hours vary by region and supplier but are typically in a window like 00:30 to 07:30 or 23:30 to 06:30. The customer cannot change the hours.
Do I need a special meter for Economy 7?
Yes. A two-register meter or a smart meter configured for multi-rate operation. Sites with single-register meters need a meter change to use a day/night tariff, usually arranged by the supplier at no cost.
Which businesses benefit from Economy 7?
Hotels, cold storage, data centres, manufacturing with overnight processes, care homes, and any site with substantial overnight consumption. Day-only businesses without overnight loads usually find single-rate cheaper.
How do I know if Economy 7 is cheaper for my site?
Compare the projected total bill on each tariff at the expected day and night consumption split. A site needs roughly 25 to 30 per cent of its consumption at night for Economy 7 to be cheaper than single-rate.
What is Economy 10?
A variant of the day/night tariff with 10 hours of night rate split across the day: 7 hours overnight plus 3 hours in the afternoon (typically 13:00-16:00). Originally designed for storage heating systems.
Can I switch off Economy 7 to single-rate?
Yes. The supplier reconfigures the meter or replaces it with a single-register meter. The change takes effect from the next billing cycle.