Should You Switch to a Time-of-Use Tariff in the North West?

Time-of-use tariffs can save flexible households in the North West £200-£400 per year by charging less for electricity used during off-peak hours. But they can also cost you more than a flat-rate tariff if you cannot shift your usage away from peak times. The difference comes down to when you use electricity, not just how much. If you have an EV, battery storage, solar panels or simply the flexibility to run heavy appliances overnight, a time-of-use tariff could be one of the best financial decisions you make. If your usage is fixed to peak hours, stay on a standard tariff.

Time-of-use (ToU) tariffs have moved from niche products for tech enthusiasts to mainstream options available from several major suppliers. Octopus Energy, OVO and others now offer tariffs that reward you for using electricity when it is cheap and plentiful. Here is how they work and whether they suit your household.

How Time-of-Use Tariffs Work

A standard flat-rate tariff charges the same price for every unit of electricity regardless of when you use it – currently around 24.5p per kWh. A time-of-use tariff splits the day into pricing periods, typically:

• Off-peak (overnight): The cheapest period, usually 11pm-6am or similar. Rates range from 7p to 12p per kWh depending on the tariff.
• Shoulder/mid-peak: Moderate pricing during daytime hours. Some tariffs skip this period entirely.
• Peak: The most expensive period, typically 4pm-7pm. Rates can be 30-40p per kWh or higher.

The maths is simple: if you can use more electricity during off-peak and less during peak, your overall cost drops. The more you shift, the more you save.

Who Benefits Most

Based on real household data from North West customers, here are the groups who save the most on time-of-use tariffs:

EV owners: This is the single biggest win. An electric car that charges overnight at 7.5p per kWh instead of 24p saves roughly £500-£700 per year on a typical 8,000-10,000 mile annual mileage. Tariffs like Octopus Go are specifically designed for this. If you have an EV and a home charger, this should be your default choice.

Battery storage owners: If you have a home battery (either standalone or paired with solar panels), you can charge it overnight at cheap rates and discharge it during peak hours, avoiding the most expensive electricity. The arbitrage (difference between cheap and expensive rates) can be 20-30p per kWh, translating to £150-£300 per year for a well-managed 5kWh battery.

Solar panel owners: The combination of generating your own electricity during the day and buying cheap overnight electricity is powerful. Your solar covers daytime usage, and the time-of-use tariff covers overnight and evening use at a discount. Many solar households in Lancashire find they can cut their grid electricity bill by 60-70% with this approach.

Households with flexible routines: If you can run your washing machine, dishwasher, tumble dryer and oven outside of the 4-7pm peak, you avoid the most expensive rates. Night-shift workers, retired couples and families who eat earlier or later than 5-6pm all tend to benefit.

Who Should Avoid Time-of-Use Tariffs

Not every household wins with a time-of-use tariff. You may pay more if:

You cook and use appliances between 4pm and 7pm. The peak period coincides with when most families cook dinner, help with homework and settle in for the evening. If you cannot shift these activities, the higher peak rate costs you more than the overnight savings.

You use electric heating without storage capability. Homes with electric radiators or fan heaters that run during peak hours will see higher costs. Storage heaters on Economy 7 can work, but standard electric heaters on a time-of-use tariff are expensive during peak times.

You have no smart appliances or timer capability. The savings come from shifting usage. If your washing machine does not have a timer and you cannot be bothered to set it going at midnight, you will not capture the off-peak rates effectively.

How to Calculate If It Works for You

Here is a practical approach for any North West household to work out whether a time-of-use tariff would save or cost money:

Step 1: Get your smart meter half-hourly data. If you have a smart meter, your supplier can provide data showing exactly when you use electricity throughout the day. Some suppliers show this in their app. You need at least a month of data, ideally three months.

Step 2: Split your usage into time periods matching the ToU tariff you are considering. Add up the kWh used in each period (off-peak, mid-peak, peak).

Step 3: Multiply each period’s usage by the corresponding rate and add them together. Compare this total to your current flat-rate cost for the same period.

Step 4: Now estimate how much usage you could realistically shift from peak to off-peak (timer on the dishwasher, overnight EV charging, delayed washing machine cycles). Recalculate with this adjusted profile.

If the adjusted total is lower than your current tariff cost, the switch makes sense. If it is marginal (less than £50 per year difference), the hassle may not be worth it.

Practical Tips for Maximising Savings

If you decide to switch to a time-of-use tariff, these habits will maximise your savings:

• Set your washing machine and dishwasher timers to run overnight (most modern machines have delay-start features)
• Charge your EV between midnight and 5am using the charger’s scheduling feature
• If you have a battery, set it to charge overnight and discharge during peak hours
• Cook meals slightly earlier (before 4pm) or slightly later (after 7pm) when possible
• Use slow cookers, which draw minimal power, for meals that need to be ready at 6pm
• Avoid running the tumble dryer, oven and kettle simultaneously during peak hours
• Pre-heat your home slightly before the peak period starts, then turn heating down during peak

The Octopus Agile Deep Dive

Octopus Agile deserves special mention because it takes the time-of-use concept further. Prices change every 30 minutes based on wholesale market rates, and you can see the next day’s prices by 4pm the day before.

In the North West, Agile prices have averaged around 20p per kWh overall in 2024, with overnight lows regularly hitting 5-8p and occasional negative pricing (where you are paid to use electricity, usually during windy overnight periods). Peak prices can hit 35-50p during the 4-7pm window.

Agile is best for households with a battery and smart home systems that can automatically respond to price signals. If you enjoy the gamification aspect of optimising your energy use, it can be genuinely rewarding. If you just want a simple, predictable bill, it is too much complexity.

Do You Need a Smart Meter?

Yes. Time-of-use tariffs require a smart meter (SMETS2) to record your usage at half-hourly intervals. If you do not have one, your supplier will install one for free before or as part of switching to a ToU tariff. Installation takes about 45 minutes and does not disrupt your supply. Our guide to the smart meter rollout in Lancashire covers what to expect.

Can I switch back if a time-of-use tariff does not work for me?

Yes. You can switch away from a time-of-use tariff at any time, subject to any exit fees on your tariff terms. Most Octopus tariffs have no exit fees. Give it at least 2-3 months to get accurate data on whether it is saving you money before deciding.

Does the gas rate change on a time-of-use tariff?

Most time-of-use tariffs only vary the electricity rate. Gas stays on a flat rate because gas usage is harder to shift (you cannot easily time when your boiler fires). A few tariffs offer dual-fuel time-of-use rates, but electricity-only ToU is far more common and more beneficial.

Are time-of-use tariffs safe for running appliances overnight?

Running modern washing machines and dishwashers overnight is generally safe – they are designed for unattended operation. However, insurers have historically raised concerns about running appliances while asleep. Check your home insurance policy, and make sure your smoke alarms are working. Most modern appliances have excellent safety features, but it is sensible to avoid running a tumble dryer unattended overnight.