We’re all looking to reduce our expenses in one way or the other. For a business owner, cutting down business and operational costs can become a main priority. Reducing energy costs is one way to reduce utility bills, and ultimately reduce how much you’re spending monthly.
When it comes to reducing energy bills, most people have heard that night-time electricity is cheaper at night. This line of thought makes sense, less people are using electricity at night so the lack of demand can make the tariffs better. But is this a fact or actually a myth?
The truth is that electricity can be cheaper during night-time for both business and domestic customers. However, this isn’t the default. To get this deal, you have to be on an off-peak tariff. We’ll break it all down in this article!
Peak and Off-Peak
You’ll have to factor in the off-peak tariff when you’re looking for your energy supplier. The times for the off-peak period are subjective to each supplier, as are the other terms and conditions. It’s a breeze to find business electricity deals by using a business energy comparison site.
Peak time is typically during the daytime when energy consumption peaks because most people and businesses are operating. There’s no blanket off-peak time but off-peak hours are generally between 10 pm and 8 am. Most, if not all, energy suppliers will offer more affordable electricity during these hours.
Economy 7 and Economy 10
Some suppliers will offer the off-peak tariff under a different name. The deal will be advertised as an Economy 7 or an Economy 10 tariff.
Economy 7 Tariff
On an Economy 7 tariff, you’ll be paying two separate rates. You’ll have a regular day rate and then a cheaper rate for 7 hours at night. This is an ideal tariff for a business that mainly operates at night, such as a nightclub. You’ll be paying for the majority of your electricity usage at a cheaper rate.
On the flip side of this, your regular day rate will be pricier than the standard rate. This means that if your business operates for some part of the day, an Economy 7 tariff might not save as much money as you’d like. To sign up for an Economy 7 tariff, you’ll need to have a specific meter installed.
The off-peak time slot for this tariff differs from supplier to supplier. As a general rule, the off-peak period for this tariff runs between midnight and 7 am.
Economy 10 Tariff
An Economy 10 Tariff works along the same lines as an Economy 7 tariff. You’ll have to pay two different rates; a more expensive day rate and a cheaper off-peak rate. You’ll need to install a specific meter to take the two separate energy readings.
There are two major differences between the two tariffs. One is that the tariff is for 10 hours instead of 7 hours. The other difference is that the 10 hours are spread across day and night, unlike the Economy 7 hours. So this tariff would be ideal for a business that runs both during the day and at night.
This tariff offers a lot of flexibility but it’s not as commonly offered as an Economy 7 Tariff. When the 10 hours will fall will be dependent on the supplier that you opt to go with. The region you’re located in and the time of year can also factor into the designated off-peak hours. For most of the UK, these hours will fall between 1 pm and 4 pm, 8 pm and 10 pm as well as midnight to 5 am.
Are Off-Peak Tariffs That Much Cheaper?
The answer is yes and no. It really depends on whether your business consumes the most energy during the day or overnight. It’s cheaper if the business operates primarily overnight but that’s not necessarily true if you use a lot of energy during peak hours. You’ll be paying much higher rates for electricity during peak hours on an Economy 7 or Economy 10 tariff than you would on a standard energy contract.
Final Thoughts
So, is electricity cheaper at night-time? Yes, it can be under the right circumstances. The kind of business you run and whether you use the most energy during peak or off-peak hours will determine whether this deal is for you. It’s important to compare standard energy deals as well as the off-peak tariffs when you’re looking to reduce your energy bills.
