Economy 7 Business Meter Explainer
Business energy can be expensive and comparison sites do not make it easy to find a fantastic deal. Energy prices also vary from supplier to supplier, which is quite mystifying when you consider all energy is the same.
One way you can save money is with an Economy 7 tariff — but only if you use electricity at certain times.
What is Economy 7?
Economy 7 is a type of electricity tariff that gives you discounted electricity for 7 hours during the night. This is an ‘off-peak’ saving that works in the same way as an off-peak train ticket: rates are reduced during hours of lower demand.
How it works
During these off-peak hours, it is not uncommon for electricity rates to fall by 45% over a normal electricity tariff. This gives businesses who operate during the night the opportunity to make significant savings on their electricity bill.
Sounds great, doesn’t it?
However, just as there is an ‘off-peak’ rate for Economy 7, there’s also a ‘peak’ rate which rises during the daytime.
The peak rate always surpasses the rate of a regular electricity tariff, making Economy 7 more expensive than a normal tariff during the day. In fact, the daytime rate on Economy 7 can be nearly double the cost of the night rate.
Will it save my business money?
This depends on two factors:
- How you consume energy, and;
- How much energy your business uses at night versus during the day.
With regards to how you consume energy: Economy 7 is an electricity-only tariff. For a business to benefit from it, it would have to use electricity as its primary source of energy as opposed to gas, and particularly for its water and heating.
With regards to how much energy your business uses at night: The daytime rate for Economy 7 can be almost double the night rate. Therefore, you would have to use a lot of energy at night to save cash. 40% is usually the benchmark.
If you are running a business that operates at night, such as a bar or nightclub, you’d definitely save money with Economy 7.
Anything else I need to know?
Used correctly, Economy 7 can help you save cash but not all utility companies offer an Economy 7 tariff.
You will need to have an Economy 7 meter installed in your business. This will tell your utility company when you are using electricity.