Time of Use tariff: your power play for smart energy

Time of Use (ToU) tariffs offer a strategic way to manage your household electricity costs, allowing you to pay different rates depending on the time of day. This approach transforms energy consumption from a passive expense into an active opportunity for savings and control. For UK households, especially those with electric vehicles (EVs) and smart home technology, understanding and utilising ToU tariffs can be a genuine power play, shifting the balance of power into your hands.

Understanding how Time of Use tariffs work can help you make smarter energy choices. Fuse Energy offers dual-rate tariffs designed to reward off-peak consumption, helping you maximise savings and gain greater control over your energy use. Click here to explore how you can switch to Fuse Energy today.

What are Time of Use tariffs?

Time of Use (ToU) tariffs charge varying prices for electricity throughout the day, rather than a single flat rate. This pricing structure incentivises consumers to shift their electricity usage away from periods of high demand, known as peak hours, to times when demand is lower, or off-peak hours.

Defining peak and off-peak hours

Peak hours are typically when most people are using electricity - for example, in the early mornings and evenings when households are preparing for work or school, cooking dinner, and running appliances. During these times, electricity is more expensive. Conversely, off-peak hours are usually overnight and during the middle of the day, when overall demand on the grid is lower. Electricity consumed during these periods comes at a reduced rate. The exact timings for peak and off-peak periods vary between tariffs and suppliers, so it is crucial to check the specifics of any tariff you consider.

How ToU tariffs differ from standard tariffs

Standard energy tariffs, often called single-rate tariffs, charge the same price per unit of electricity regardless of when you use it. This simplifies billing but offers no financial incentive to adjust your consumption habits. ToU tariffs, however, directly reward you for using electricity during off-peak times. This means that by making conscious choices about when to run high-energy appliances, such as washing machines, dishwashers, or EV chargers, you can significantly reduce your overall energy expenditure.

How Time of Use tariffs work in the UK

In the UK, the shift towards Time of Use tariffs is closely linked to advancements in energy metering and the broader goal of creating a more flexible and efficient energy grid. These tariffs are not just about saving money; they are about participating in a modern energy system.

The role of smart meters

Smart meters are fundamental to the operation of modern ToU tariffs in the UK. Unlike traditional meters that require manual readings, smart meters automatically send accurate consumption data to your energy supplier. This capability is essential for ToU tariffs, as it allows suppliers to precisely track how much electricity you use during different pricing periods. Eligibility for dual-rate tariffs is determined by your meter configuration, which can be met by either a smart meter or a multi-register (dual-rate) dumb meter.

The Radio Teleswitch Service (RTS), which supported older multi-rate meters, is being phased out across the UK. The signal for these legacy meters began to be switched off from 30 June 2025, meaning they must be replaced with smart meters to access modern dual-rate tariffs. Your current energy supplier will replace your RTS meter with a smart meter, typically at no cost to you. Ofgem, the energy regulator for Great Britain, sets the rules for energy suppliers, including those related to smart meter rollout and tariffs.

Types of ToU tariffs: fixed, variable, and dynamic

ToU tariffs come in several forms, each offering different levels of price certainty and flexibility:

• Fixed ToU tariffs: These tariffs lock in your peak and off-peak unit rates for a set period, usually between 12 and 18 months. This provides price stability but may include exit fees if you switch before the contract ends.
• Variable ToU tariffs: With these, your peak and off-peak unit rates can change, usually quarterly, in line with market conditions. They offer more flexibility as there are typically no exit fees.
• Dynamic ToU tariffs: These are the most flexible, with rates that can change much more frequently - sometimes even hourly - based on real-time wholesale electricity prices. While they offer the potential for significant savings for those who can actively manage their usage, they also carry more price volatility.

Understanding standing charges and unit rates

Every energy tariff, including ToU tariffs, consists of two main components:

• Unit rates: This is the price you pay for each unit (kilowatt-hour, or kWh) of electricity you consume. With ToU tariffs, you will have at least two different unit rates: one for peak hours and a lower one for off-peak hours.
• Standing charge: This is a fixed daily charge that covers the cost of supplying electricity to your home, regardless of how much energy you use. It contributes to maintaining the grid and other operational costs. You can learn more about this in our article on what is a standing charge.

Benefits of ToU tariffs for modern households

ToU tariffs offer more than just a different way to pay for electricity; they provide tangible benefits that align with the needs of modern households, especially those embracing smart technology.

Reducing your energy bills

The primary appeal of ToU tariffs is the potential for significant cost savings. By shifting high-energy activities to off-peak hours, when electricity is cheaper, you can drastically reduce your overall energy expenditure. For example, charging an electric vehicle overnight or running a dishwasher during the day can cost considerably less than doing so during peak evening hours. The average UK home uses around 2,500 kWh of electricity per year, so even small shifts in usage can lead to noticeable savings over time.

Gaining control over consumption

ToU tariffs empower you to take an active role in managing your energy consumption. Instead of passively accepting your energy bill, you gain the ability to make strategic decisions about when and how you use electricity. This control extends beyond just saving money; it provides a sense of financial freedom and allows you to optimise your energy usage to fit your lifestyle, rather than the other way around.

Supporting a smarter grid

By encouraging off-peak energy use, ToU tariffs help balance demand on the National Grid. This reduces strain during peak periods, making the grid more efficient and resilient. This collective effort contributes to a more sustainable energy system, allowing for better integration of renewable energy sources and reducing the need for fossil fuel power plants to kick in during demand spikes.

Maximising savings with smart technology

Modern households with smart technology are perfectly positioned to unlock the full potential of Time of Use tariffs. Integrating smart devices allows for automated, effortless optimisation of energy consumption, turning potential savings into reality.

Optimising EV charging

Electric vehicle owners are among the biggest beneficiaries of ToU tariffs. Charging an EV battery can consume a significant amount of electricity, but by scheduling charging sessions during off-peak hours, the cost can be dramatically reduced. Many EVs and smart home charging points come with built-in scheduling features, allowing you to set them to charge automatically when electricity rates are lowest. This ensures your car is ready when you need it, without the peak-rate price tag. You can find out more about electric vehicle charging at home in our dedicated guide.

Integrating smart home appliances

Beyond EVs, a range of smart home appliances can be integrated with ToU tariffs to maximise savings. Smart washing machines, dishwashers, and tumble dryers can be programmed to run during off-peak windows. Smart thermostats can learn your habits and adjust heating or cooling schedules to pre-heat or pre-cool your home during cheaper periods. Smart plugs can turn off energy-hungry devices when not in use or schedule them to operate only during off-peak times. This holistic approach to smart home integration turns your home into an intelligent energy-saving hub.

Considering home battery storage

For those looking to take control even further, home battery storage systems can be a powerful addition. These batteries can be charged during off-peak hours when electricity is cheapest and then discharge that stored energy during peak times, avoiding the higher rates. This not only maximises savings but also provides a degree of energy independence and resilience against power outages.

Choosing and switching to a Time of Use tariff

Making the switch to a Time of Use tariff requires a thoughtful approach to ensure it aligns with your lifestyle and delivers the expected benefits.

Assessing your energy usage patterns

Before switching, take some time to understand your current energy consumption habits. Review past bills or use your smart meter data to identify when you typically use the most electricity. Consider whether you can realistically shift high-demand activities, such as EV charging, laundry, or dishwashing, to off-peak hours. If your lifestyle makes it difficult to adjust your usage, a ToU tariff might not offer significant savings.

Checking smart meter compatibility

As discussed, a smart meter is highly beneficial for most modern ToU tariffs. If you do not have one, contact your current energy supplier to arrange an installation. Smart meter upgrades are typically free. If you have an older multi-rate meter, such as one previously supported by RTS, your current supplier will need to replace it with a smart meter before you can switch to a modern ToU tariff.

Comparing supplier offerings

Once you understand your usage and have a compatible meter, compare the ToU tariffs available from different energy suppliers. Pay close attention to:

• Peak and off-peak times: Ensure these align with your ability to shift usage.
• Unit rates: Compare the prices for both peak and off-peak periods. A very low off-peak rate might be offset by a very high peak rate.
• Standing charges: Factor in the daily standing charge, as this is a fixed cost regardless of usage.
• Contract length and exit fees: Understand the terms if you need to leave the tariff early.

The switching process

Switching energy suppliers in the UK is generally a straightforward process. Once you have chosen a ToU tariff, your new supplier will handle most of the arrangements. You will typically provide some basic information, and they will coordinate the switch with your previous supplier. The process usually takes around 21 days.

Managing your energy bills should be clear and easy to understand. Fuse Energy focuses on straightforward pricing, so you can see exactly what you're paying without unnecessary complexity. If you have a smart meter, you can view detailed usage data through the app or website, helping you understand how you can lower your bills. If you don't have a smart meter, Fuse Energy can upgrade your non-smart meter, completely for free. This can make it easier to track spending and make informed decisions about your energy use. Our 24/7 human support team is always on hand with fast response times whenever you need help. Click here to switch to Fuse Energy today. Find out about our mission by clicking here.