Smart tariffs, also known as time-of-use (TOU) tariffs or dynamic pricing, are electricity pricing structures that vary based on the time of day, day of the week, or other predetermined factors. These tariffs aim to reflect the actual cost of generating electricity at different times and encourage consumers to shift their electricity usage to off-peak periods when energy costs are lower.
Smart tariffs typically involve higher prices during peak demand periods, such as in the evening when people return home from work and energy consumption spikes, and lower prices during times of lower demand, such as late at night or early morning.
By offering incentives for consumers to use electricity during off-peak hours, smart tariffs can help utilities manage demand more efficiently, reduce strain on the grid, and promote the integration of renewable energy sources. Additionally, they can empower consumers to make more informed decisions about their energy usage and potentially lower their electricity bills by adjusting their consumption patterns accordingly.
So which smart tariff is best for me?
Market leader and the UK’s most awarded energy supplier Octopus Energy have a wide range of tariffs, all suited to customers’ differing needs and lifestyles, but choosing the tariff for you can be a minefield! Here we break down the tariffs and explain in layman’s terms which is the tariff for you and your household.
Agile Octopus
With Agile Octopus, customers get access to half-hourly energy prices, tied to wholesale prices and updated daily. So when wholesale electricity prices drop, so do your bills – and if you can shift your daily electricity use outside of peak times, typically between 4-7pm, you can save even more. Agile prices can spike up to 100 p/kWh any time – although a in Winter 2023-24 the max 30 min slot was 68p/kWh with the cheapest being -4p/kWh! Yes they actually paid you to use electricity. This tariff is therefore best suited to customers who can shift large amounts of their energy use to avoid these expensive peaks, often by using smart home technologies like solar and batteries.
Intelligent Octopus Go
If you own an electric vehicle (EV), then Intelligent Octopus Go is the tariff for you! Automatically charge your car when it’s cheapest and get super-low smart charging rates plus six hours of cheap energy for your whole home every night. Making the most out of this tariff is as simple as connecting your EV or charger in the Octopus app, before just plugging in your car and telling Octopus how much charge you need. Octopus will then automatically schedule your charge for when energy is cheapest and greenest, and you’ll only pay 7.5p/kWh regardless of the time of day.
Octopus Flux
For you solar PV and battery owners out there, the Octopus Flux tariff has been designed exclusively for your needs. Compatible with all solar PV and battery systems, Octopus Flux is an import and export tariff optimised to give you the best rates for consuming and selling your energy and support the grid during peak periods. It gives customers super-cheap rates between 02:00 – 05:00 every day, when you can top up your battery with any extra energy you may need, as well as a peak rate between 16:00 – 19:00, the optimum time to discharge your battery and export surplus energy back to the grid.
Cosy Octopus
Finally, if you’re the proud owner of a heat pump, check out the Cosy Octopus tariff to keep your home warm for less with super cheap rates, twice a day, every day. It’s a three-rate tariff with double dip Cosy Hours every day: six hours of super-cheap electric to warm your home. You need a heat pump to be eligible for Cosy Octopus, but it doesn’t need to have been installed by Octopus Energy. If you’re in the process of getting one installed, you can still switch to Cosy.
Picking the right tariff depends on the low-carbon technologies you own (i.e. EVs, heat pumps, solar or battery storage) and your personal energy consumption. Octopus Energy have a wide range of tariffs, so if you’re looking for something different than the ones mentioned above, check out their full range or take their quick quiz. Even if you’re at the very start of your renewable journey, and don’t have any smart technologies (yet!), you can save cash and carbon by shifting your consumption to cheaper times. Octopus Tracker is a great introduction to smarter energy, with different energy prices daily.
Use this link to sign up to Octopus and get £50 credit on your account!