Economy Electricity Rates – Do They Work?

The Economy 7 energy tariff is very popular in the UK; particularly with people who use electricity to heat their home. The basic principle is that the tariff makes electricity far cheaper at night than during the day; meaning you can save money by heating your home at night. This is a good idea in theory as a number of people are at work during the day and do not need their heating on. The tariff is also designed with storage heaters, which allow you to conserve heat on the cheap rate and release it during the day, in mind.

But is this effective for everyone?

Home During the Day?

The problem with Economy 7 is that unless you have storage heaters, which we will come onto later, it will end up costing as much or more than a standard tariff to heat your home electronically. To make up for the reduced night rates Economy 7 has increased day rates, typically 12p per kilowatt as opposed to 8p, meaning if you do use your electricity outwith the Economy 7 hours (midnight to 7am) you will be paying around 66% more for your electricity.

Storage Heaters

Storage heaters are becoming increasingly out-dated. They store heat in ceramic bricks during the night and release it during the day. Unfortunately there is no way of turning them off during the day so if you are out then the heat is wasted. Also, if your storage heater runs out of heat before your economy rate kicks in you will have to use it on an increased rate; scuppering any savings made. Storage heaters make no allowances for colder days when you need extra heat or warmer days when you need less, leading to uncontrollable discomfort. There are suitable alternatives though.

Economy 10

If you cannot afford to replace your storage heaters then enquire about the Economy 10 tariff from your supplier. This tariff works similarly to Economy 7 but it also provides 3 hours of cheaper electricity during the day as well as the 7 hours provided during the night. The rates are slightly higher than those of Economy 7 but have the potential to be more cost effective in the long run.

Changing to Gas

Gas is cheaper than electricity but it is expensive to have installed if your home is currently running on electricity. It is difficult to give an exact price for conversion to gas because rates will change between suppliers and mechanics. That said, fitting a gas central heating system into an average family home will cost anywhere between £2,500 and £4,500 depending on the complexity of the job. This may seem like a large investment but the saving potential in the future could potentially make it worthwhile.

Installing Electric Radiators

This is probably the most affordable, immediate solution if the economy rate/storage heater option is proving to be a waste of money. Electric radiators convert almost 100% of all the energy they use into heat so be sure you know how powerful your radiator needs to be to heat your room – as a rough guide you will need 1kw (kilowatt) of power for every 14 cubic metres of space to achieve a comfortable temperature of 22°C or 72°F. You can help economise your electric use by buying radiators with effective thermostats; this will minimise the amount of time your heater has to be on. Also, look out for heaters with good quality materials; certain metals conduct heat quicker and will therefor heat the room faster.

Infographic supplied by The Economy Radiator Company

Installing a Heat Pump

Heat pumps are expensive to install but make massive savings in the long run so if you are interested in making long term savings on your bills this could be the option for you. Heat pumps convert the air outside into heat – and they can do this even when the air outside is in negative °C. A good heat pump will cost around £4000 and this does not include installation or conversion of your interior radiators or pipes. That said; heat pumps will save around 30-40% of your utility bill after installation, so if you can make the investment they are certainly worth considering.

Heating your home should not be costing you any more than you can afford but the sad reality is that many of us do pay too much. If you believe this is the case contact your supplier first as they may be able to offer a cheaper rate. If you are still unsatisfied and believe you could save more then consider the conversion options above.