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A Business Owner's Guide To Economy 7

CHRIS RICHARDS | 24 JUNE 2021

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Looking for ways to cut your business's electricity bill? You might want to consider switching to an Economy 7 meter. It’s a popular choice for many business models, but there are a few factors to consider when deciding if it’s right for you.

With Economy 7 you pay less for the energy you use at night. This could be a no-brainer for your business, providing you know when the night rate hours are in your region. Plan it right, and you could make significant savings for your business.

Use this comprehensive guide to help you decide whether your business can benefit from an Economy 7 electricity meter.

What is Economy 7 for business?

An Economy 7 tariff enables you to use cheaper electricity by giving you a reduced tariff for nighttime usage. In the same way you can save money on flights when you catch a red-eye, you get cheaper electricity because demand is lower. Discounted energy prices are available for 7 hours during the night, hence the name Economy 7.

In business, this rate can be referred to as a multi-rate business energy contract.

Depending on how your business operates, you could take advantage of the cheap nighttime rates that Economy 7 or multi-rate meters offer.

When using an Economy 7 meter, you’ll see two different rates listed on your bills - the nighttime off-peak rate and the peak rate the meter will use for the rest of the day. It’s important to know that while suppliers offer a tempting cheap rate at night, their daytime rate is noticeably more expensive.

If your business does use most of its energy at night, it’s likely an Economy 7 meter would be worth it.

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How can Economy 7 save money on energy bills?

Whether Economy 7 can save your business money on your electricity bill really depends on how your business uses electricity. The rate can also vary across energy suppliers because they all offer their own versions of Economy 7.

With some basic details about your current electricity supplier and meter readings, you can use Business Energy UK’s comparison tool to get quotes from several suppliers in just 60 seconds. Our expert team can then advise you on whether such a tariff will suit your business needs if you wish to pursue a quote or get more information.

You might need a new meter installing if you switch to an Economy 7 tariff, as contracts require a multi-rate or Economy 7 meter.

Although some suppliers offer contracts that are compatible with smart meters, most require you to get a new meter if you switch because their Economy 7 meters aren’t compatible with other companies' meters.

We would only recommend Economy 7 for businesses that use electricity heavily at night while using little to no electricity during daytime hours.

When are Economy 7 Off-Peak Hours?

Economy 7 night rate hours are defined by region. This can be confusing and some may be misled to believe these hours are determined by the supplier.

In some regions, the 7-hours is clearly defined as one period for any property that has an Economy 7 meter fitted. For example, for businesses based in London, the South of England, Yorkshire, the North West and the North East, you’ll know the exact start and end times of the off-peak hours.

Other regions aren’t so simple. The 7 consecutive hours of off-peak service can start within a time phase of 10.5 hours. When that time frame occurs depends on the meter. The time must start at half-hour intervals, making it slightly easier to decipher because it will start at 00 or 30 minutes past an hour.

If your company is based in a region that doesn’t explicitly specify its Economy 7 hours, the night rate hours should be clearly outlined on the meter itself. If it isn’t, you can contact your operator to ensure you have definitive guidance on the Economy 7 times specific to your meter.

How can businesses switch to an Economy 7 Electricity Tariff?

Whether you want to switch suppliers entirely or first see if it’s possible to switch to an Economy 7 tariff from a normal tariff with your own supplier, we’re here to make the switching process as easy as possible.

Use our 60-second comparison tool to check quotes from many of the best energy suppliers in the UK

When you’ve found the Economy 7 deal that’s right for your business, inform the supplier that you’d like to begin your contract

You’ll need to provide them with basic information such as the company name, address, average electricity usage per annum, and details of your old supplier

It’s common practice that they will contact your original provider to schedule a changeover date

They will contact you when everything is arranged to install your Economy 7 or multi-rate electricity meter

That’s all there is to it. All you need to do to reduce your energy bills is choose your supplier and tariff, then the new provider will do the dirty work for you to set things in motion.

Frequently Asked Questions

Whether or not Economy 7 is worth the switch depends on when your business uses electricity.

Truth be told, it isn’t a practical money-saving option for businesses that fit a standard 9-5 model and use electricity almost exclusively during the day. But let's look at some examples of businesses that could save a great deal of money:

  • Businesses that use storage heaters: electric storage heaters have a high energy usage, so charging them at night during your off-peak hours could be beneficial. When they release heat throughout the day you’ll rest assured that all the power they used was generated at night.
  • Electric vehicle fleets: charge your company's electric vehicles at night to further improve their energy efficiency
  • The hospitality sector: bars and nightclubs that aren’t open during the day could put low electricity prices to good use
  • Warehouses and factories: save money with an Economy 7 tariff when electrical equipment is being charged and machinery is in use

There were concerns that Economy 7 would be phased out several years ago with the advent of Smart Meters. Some suppliers worried that it wouldn’t be feasibly adapted in time to work with or compete with other tariffs.

It seems that this has not been the case, however, because some firms can offer a smart meter that can cater to Economy 7 by displaying two separate tariffs. Ofgem provides useful guidance here on how to understand Economy 7 meters.

Are you already on Economy 7 but, after doing the maths, believe your business would benefit from a cheaper electricity rate on a normal single-rate tariff?

We've made the switching process easy with our comparison tool at Business Energy UK. You may even be able to switch without needing to change your meter. You’ll have to check this with your current or prospective supplier, who should be able to inform you whether or not the meter you have is compatible with the single-rate tariff you want.

If keeping the same meter isn’t possible it might be worth shopping around because some suppliers will change your meter free of charge.

Not all energy companies offer Economy 7 tariffs on a commercial contract. But look out for similar two-rate tariffs under a different name.

Most suppliers do charge to install an Economy 7 meter, however, more and more are supplying free of charge smart meters that have the technology to record two different tariffs.