Are you overpaying on an Economy 7 tariff?Time-of-use energy tariffs not always the cheapest
10 October 2012
Many energy customers get no benefit from ‘off-peak’ tariffs such as Economy 7 and Economy 10 and are confused about rates, according to new research.
Time-of-use energy deals offer cheaper energy prices during off-peak times, such as overnight, but many customers on these tariffs could be paying over the odds for their energy bills, according to new research from independent watchdog Consumer Focus.
Its report found that 38% of customers get little benefit from these tariffs as they do not have storage heaters or use appliances at off-peak times.
Which? is calling for energy companies to simplify their tariffs so that consumers can easily identify the best deal. For now, you can compare energy deals at Which? Switch to find the cheapest deal for your home.
When is Economy 7 cheapest?
Customers on Economy 7 energy tariffs and Economy 10 energy tariffs make up the majority of time-of-use consumers. Economy 7 tariffs charge customers less over seven consecutive hours during the night, while Economy 10 has a cheap rate for early morning, early afternoon and five hours overnight.
Which? Switch estimates that households need to use about 55% of their total electricity use between 1am and 8am, depending on the supplier, to make a saving on time-of-use deals. But this can vary widely depending on your tariff, region and usage. For more advice on switching energy tariffs visit Which? Switch.
Confusing energy prices
The Consumer Focus report also found widespread confusion over rates charged and when tariffs kicked in - 12% of customers on time-of-use tariffs were confused about off-peak times and rates, while a further 13% were unsure if they were on the correct tariff for them.
As part of our affordable energy campaign, Which? is calling on the government to tackle complicated energy tariffs once and for all. We are calling for a simple tariff format that will help consumers to understand how much they are paying and will not punish consumers for using less energy.
The research on time-of-use tariffs was conducted by Ipsos MORI on behalf of Consumer Focus. It surveyed 620 members of the public.