We switched to a time-of-use electricity tariff from Octopus in the summer, from an Economy 7 tariff. This means that the price of electricity varies every half an hour, depending on the wholesale price. Between 4pm and 7pm a peak-time 12 pence is added, capped at 35p/kWh. So there’s an incentive to avoid the 4pm to 7pm peak; the “carrot” is that the price can drop to zero- and below. Octopus update their web page every evening for the day ahead, so you know what to expect, and make it available on an API for clever IoT automation such as Ohme EV charging. Here’s a graphical example of a 2-day period in January:
When we were on Economy 7, we were paying an average of 12.5p per kWh (including VAT). With two electric cars, 59% of our demand was at night and 41% during the day. Solar PV reduces our daytime demand, more significantly in the summer, but we still often get enough solar energy to heat a free tank of hot water on sunny days in the winter.
But how does a time-of-use tariff work on dark days in November and December? The bottom line is that our average rate was 9.47p (inc. VAT). This is a saving of 24% over the Economy 7 tariff, it would be even more over the average UK rate. Over a year that’s £250 a saving over Economy 7 (which has more than paid for my Ohme smart EV charging cable for example). Put another way, our average rate we have paid this month is now the same as our off-peak rate was on Economy 7.
On 8 and 9 December 2019, the windiest days, we were paying an average of below 5p per kWh for the day. This is because of negative pricing during the night, when demand was lowest and wind supply at record levels, when we could charge our electric cars. You could also set a delay timer on any household appliance – or leave an electric room heater or water heater on!
In the interests of balance, I need to emphasize that if your usage has to be high during the peak period for some reason- then this tariff isn’t for you, and you could end up paying more! However most people could simply switch their heaviest use (washing machines, dishwashers, tumble driers for example) to times outside the 4-7pm peak, and save – even without having an electric car to charge. Mid-afternoon is often a very cheap time, overnight is the cheapest.
The net effect of all this, quite apart from saving cash, is to remove electricity demand from the evening peak, where fossil generators like coal and gas are needed to provide power. So this is the period when the grid is at its dirtiest. For much of the year, solar makes little or no contribution in the evening.
Longer term, a battery such as a Tesla Powerwall is the best way to stop drawing any grid electricity in the evening, but for now that’s rather expensive. Such a battery can charge in the cheapest period, and even be used to sell back electricity at peak times. Octopus also have a tariff to sell your energy back to them, called outgoingOctopus. This can also be Agile; meaning the rate you’re paid can change depending on demand, up to 10p per unit. Nice as that sounds, there’s much more money to be saved by charging the battery from solar, then avoiding drawing any of the 4-7pm peak electricity.
If you’re interested in switching, my Octopus referral is: