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Economy 7

What is Economy 7?

Economy 7 is the UK electricity tariff that splits the day into two pricing zones. Seven hours overnight, where the unit rate drops to something properly cheap. And seventeen hours the rest of the time, at a higher unit rate than you’d pay on a standard single-rate tariff. The exact night window varies by supplier and region. It might be 11pm to 6am. It might be 1am to 8am. Either way, the seven-hour off-peak block is the constant. The tariff was designed in the 1970s to encourage overnight use of cheap baseload electricity, and it’s still around for the same reason. It works well on sites where consumption naturally falls outside normal daytime hours.

Economy 7 is a UK-only structure that only ever appears on business electricity contracts. It rewards sites that can shift load into the small hours.

Economy 7 is one of the longest-standing tariff structures in the UK electricity market and remains a viable option for the right type of consumption pattern. For business customers it sits alongside fixed standard tariffs as a choice on most domestic-style supplies and on many smaller business meters. Picking the right one is essentially a question of how your demand is shaped across the 24 hours.

What Economy 7 actually does

Economy 7 splits the 24-hour day into two pricing zones:

• Night rate. Seven hours overnight. Significantly lower unit rate.
• Day rate. The other seventeen hours. Higher unit rate than the day rate on a standard single-rate tariff.

The standing charge is unchanged. The arithmetic is. Night kWh × night rate + day kWh × day rate + standing charge × days = bill. The proportion of consumption falling in the night window decides whether the total comes out cheaper or more expensive than a standard tariff.

When the night hours apply

The seven-hour window is not standardised across the country. It depends on:

• The supplier (each chooses a window in line with the local DNO).
• The region (Northern Scotland, Southern England etc. Can differ by an hour).
• Whether the country has moved to British Summer Time (some regions shift the window by an hour, some do not).

Common windows include 11pm-6am, 12am-7am, 12.30am-7.30am, and 1am-8am. The exact window for your meter is set by the meter time switch (an internal clock in the meter, or a radio-controlled signal). It should be stated on the bill and is also available from your supplier on request.

The Economy 7 meter and registers

An Economy 7 meter has two separate registers (sometimes called “rates” or “tariffs”):

• Rate 1 (day). Records consumption during the day hours.
• Rate 2 (night). Records consumption during the seven-hour night window.

Older meters have two visible mechanical dials; modern smart meters store the two values electronically. The bill shows two consumption lines. One for each register. With separate unit rates applied. If both registers are showing kWh, the meter is recording correctly; if one shows zero or near-zero, the time switch may be faulty.

When Economy 7 saves money

The break-even point depends on the day-rate premium versus the night-rate discount. Most Economy 7 tariffs are structured so the customer saves overall when 25-35 per cent of total consumption falls in the night window. Below that threshold, the higher day rate outweighs the night-rate saving.

Sites where this naturally happens:

• Operations running through the night (manufacturing, logistics, processing).
• Hot water systems on overnight timers.
• Electric storage heating that charges overnight and releases heat through the day.
• Refrigeration that cycles continuously, with cooling proportionally heavier when ambient temperatures are lowest (i.e, overnight).
• EV charging on timed overnight schedules.

Example calculation

To show how the maths works, here is a simple illustrative example. Assume:

• Standard single-rate tariff: 28 p/kWh, standing charge 50 p/day.
• Economy 7 tariff. Day rate 32 p/kWh, night rate 14 p/kWh, standing charge 50 p/day.
• Total annual consumption: 12,000 kWh.

Example only. Real Economy 7 day and night rates vary by supplier and tariff. Check your own bill or a supplier quote for the actual figures.

When Economy 7 costs more

Economy 7 is a poor fit when:

• The site operates only during normal business hours (9-5 office, daytime retail).
• The seven-hour night window does not align with the actual demand pattern (e.g, 1am-8am window but the site closes at midnight).
• Heating is gas, hot water is point-of-use, and there are no shiftable overnight loads.
• The customer cannot or does not time-shift discretionary loads (EV chargers, dishwashers, immersion heaters) to the night window.

On these sites the higher day rate dominates and the customer pays more than they would on a standard single-rate tariff for the same consumption.

Economy 7 for UK business sites

Practical situations where business customers benefit:

• Hospitality with overnight HVAC. Hotels, B&Bs, care homes running heating, cooling, and lighting through the night.
• Leisure centres with overnight pool heating. Pools maintain temperature 24/7; significant load falls in the night window.
• 24-hour operations. Manufacturing, logistics, distribution centres, security-monitored premises.
• Refrigeration-heavy retail. Convenience stores with substantial cold stock that cools more efficiently in cooler overnight temperatures.
• EV charging infrastructure. Workplaces and forecourts charging fleet vehicles overnight.

Larger sites with half-hourly meters typically move beyond Economy 7 to fully time-of-use or pass-through contracts that price every half-hour explicitly. Economy 7 is mainly a non-half-hourly tariff structure now.

Switching to or off Economy 7

Moving onto Economy 7 needs a meter that supports two registers. Most modern smart meters do; older single-rate meters do not and would need to be replaced (typically free of charge under the smart meter rollout).

Moving off Economy 7 to a single-rate tariff:

1. Compare the projected cost on both tariff types using actual consumption data.
2. Confirm with the supplier that single-rate is available for your meter type and supply.
3. Switch tariff (or supplier) at contract renewal. The change is administrative once the meter supports it.
4. On older two-register meters, the day register will be used and the night register ignored. Some suppliers will replace the meter as part of the tariff change.

Related entries: what a kWh is, day and night rates, half-hourly meter, smart meter (SMETS2), profile class.

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