Time of use tariff explained

Time of Use (ToU) tariffs offer a strategic way to manage your home's energy consumption, turning energy management into an advantage. These tariffs charge different prices for electricity at various times of the day, encouraging you to use more energy when it is cheaper and often greener, rather than constantly trying to use less.

If you are looking to take control of your energy bills with a Time of Use tariff, Fuse Energy offers clear pricing and an intuitive app to help you manage your usage effectively. Click here to switch to Fuse Energy today.

What is a Time of Use tariff?

A Time of Use (ToU) tariff is an energy pricing structure that varies the cost of electricity based on the time of day, week, or even season. Unlike traditional flat-rate tariffs, which charge a single price per unit of electricity regardless of when it is consumed, ToU tariffs introduce dynamic pricing. This means the price you pay for each kilowatt-hour (kWh) of electricity changes throughout the day.

Understanding peak and off-peak hours

ToU tariffs typically divide the day into distinct pricing periods: peak and off-peak. Peak hours are when electricity demand is highest, usually in the late afternoon and early evening when most people are home from work, cooking, and using appliances. During these times, electricity is more expensive. Conversely, off-peak hours occur when demand is low, often overnight or during the middle of the day, making electricity cheaper. Some tariffs might also include a "shoulder" period with intermediate pricing.

How ToU tariffs differ from standard tariffs

The key difference between ToU and standard tariffs lies in their pricing structure. Standard tariffs charge a flat rate per unit of electricity, meaning the cost per kWh remains constant regardless of when you use it. ToU tariffs, however, have variable rates, incentivising you to shift your energy consumption to off-peak times. This encourages more efficient use of the grid and often aligns with periods when renewable energy sources are more abundant.

The benefits of Time of Use tariffs

Opting for a Time of Use tariff can provide several advantages, from direct financial savings to broader environmental contributions and greater personal control over your energy use.

Reducing your energy bills

By understanding and adapting to peak and off-peak pricing, you can significantly reduce your household energy bills. Shifting high-consumption activities, like running your washing machine or charging an electric vehicle, to cheaper off-peak hours means you pay less for the same amount of energy. The average UK home uses around 2,700 kWh of electricity per year, so even small adjustments to usage patterns can lead to noticeable savings over time.

Supporting a greener grid

ToU tariffs play a crucial role in supporting a greener, more stable energy grid. By encouraging consumers to use electricity during off-peak times, these tariffs help balance demand, reducing strain on the grid during peak periods. This often means more electricity is consumed when renewable energy generation (like wind and solar) is high and demand is low, leading to a higher proportion of clean energy being used.

Gaining control over your energy use

A ToU tariff puts you in command of your energy consumption. Instead of passively accepting a flat rate, you actively make choices about when and how you use electricity. This increased awareness and control can be empowering, allowing you to align your energy habits with your financial goals and environmental values. With the right tools, managing your energy becomes a strategic advantage, not a chore.

Meter requirements for ToU tariffs

To accurately track and bill your electricity usage according to varying rates, specific meter types are essential for Time of Use tariffs.

The role of smart meters

While smart meters are ideal for modern ToU tariffs, some dual-rate manual meters can also be compatible, depending on their configuration. Smart meters automatically record and send your energy readings to your supplier, distinguishing between peak and off-peak consumption. This eliminates the need for manual readings and ensures you are billed precisely for your usage during each pricing period. For those without a smart meter, a smart meter installation can unlock the full benefits of dynamic pricing.

Multi-register meters and legacy systems

Some older dual-rate tariffs (like Economy 7) historically relied on multi-register "dumb" meters, which have separate dials for peak and off-peak usage. These meters can still qualify for off-peak or dual-rate tariffs if they have a supported Supplier Service Code (SSC). However, the energy industry is moving away from these legacy systems.

The Radio Teleswitch Service phase-out

A significant change impacting legacy dual-rate meters is the phase-out of the Radio Teleswitch Service (RTS). This service, which used a longwave radio signal to switch between peak and off-peak rates for older meters, began to be switched off from 30 June 2025. If you have an RTS meter, your current supplier will need to replace it with a smart meter to ensure you can continue to be billed correctly for dual-rate electricity. This upgrade is typically free and paves the way for you to access modern ToU tariffs.

Optimising your energy usage

Maximising the benefits of a ToU tariff involves a conscious effort to shift your energy consumption patterns.

Shifting high-consumption activities

The most direct way to optimise is to reschedule energy-intensive tasks to off-peak hours. This includes:

• Laundry and dishwashing: Run washing machines and dishwashers overnight or during the day when rates are lower.
• Electric showers: If you have an electric immersion heater, consider heating your water during off-peak times.
• Cooking: Plan meals that require prolonged oven use for off-peak periods where possible.

Leveraging smart home technology

Smart home devices can automate energy shifting, making optimisation effortless. Smart plugs can turn appliances on and off according to your tariff's schedule, while smart thermostats can pre-heat or pre-cool your home during cheaper periods. Integrating these technologies allows you to automate savings without constant manual intervention.

Electric vehicles and home batteries

Electric vehicles (EVs) and home battery storage systems are particularly well-suited to ToU tariffs. EVs can be programmed to charge during the cheapest off-peak hours, significantly reducing running costs. For more information on setting up your charging, explore EV charging at home. Home batteries can store electricity bought during low-cost periods or generated by solar panels, then discharge it during expensive peak times, further cutting your reliance on the grid when prices are high. You can learn more about this by reading about solar panel battery storage.

Choosing the right Time of Use tariff

Selecting the best ToU tariff requires careful consideration of your household's unique energy profile and the available options.

Assessing your household's energy habits

Before switching, understand when and how your household typically uses electricity. Review past bills or use a smart meter's data to identify your peak usage times. Consider whether you can realistically shift a significant portion of your consumption to off-peak hours. A ToU tariff is most beneficial if you have flexibility in your energy use.

Key factors to compare

When researching ToU tariffs, look beyond just the unit rates. Compare:

• Peak and off-peak hours: Ensure the periods align with your ability to shift usage.
• Rate differentials: How significant is the price difference between peak and off-peak? A larger difference offers more potential savings.
• Standing charges: This daily fixed cost can impact overall savings.
• Contract length and exit fees: Understand the terms if you need to switch again.

Making the switch

Once you have assessed your needs and compared tariffs, making the switch is straightforward. You will typically need a compatible meter, and your new supplier will handle the transfer process. Monitoring your usage and bills after switching will help you track your savings and fine-tune your optimisation strategies.

Managing your energy bills with a Time of Use tariff can be simple and rewarding. Fuse Energy provides transparent pricing and intuitive tools within our app, helping you monitor usage and identify peak and off-peak periods for easy optimisation. Our 24/7 human support team is always on hand to help you understand and maximise the benefits of your tariff. Click here to switch to Fuse Energy today and start making your energy work smarter for you. Find out more about our mission to make energy abundant by clicking here.