Time-of-Use Tariffs Explained: How Smart Plugs and Smart Meters Can Cut Your Bills
We remember when electricity cost the same no matter when you used it. You ran the washing machine when the basket was full, put the oven on when you were hungry, and charged whatever needed charging overnight. Those days are gone. Time-of-use tariffs have quietly become one of the biggest shifts in how UK homes think about power, and if you have a smart meter on the wall and a few smart plugs in the drawers, you are already holding most of the tools you need to benefit from them.
What Are Time-of-Use Tariffs and Why Are They Spreading in the UK?
A time-of-use (ToU) tariff is simply an electricity tariff where the price per kWh changes depending on when you use it. Instead of one flat rate, you get cheaper windows and more expensive ones. The idea is not new — Economy 7 has been doing a version of this since the 1970s — but the combination of smart meters, rising wholesale price volatility and electrification of heating and transport has pushed ToU from niche to mainstream.
Suppliers including Octopus Energy, British Gas and EDF are actively steering customers onto these tariffs, partly because Ofgem and the government want demand to flex rather than peak. When millions of homes charge cars and run heat pumps at 6pm, the grid strains and prices spike. When those same homes shift load to 2am, everything gets cheaper and cleaner.
How ToU Pricing Works: Peak, Off-Peak and Everything In Between
Most ToU tariffs divide the day into bands. A typical structure looks like this:
- Peak — usually 4pm to 7pm on weekdays, when national demand is highest and prices can be several times the off-peak rate.
- Off-peak — often overnight, sometimes with an afternoon window, when wholesale prices are low and renewable generation is plentiful.
- Shoulder or standard — the hours in between, priced somewhere in the middle.
The exact times vary by supplier and tariff, which is why reading the rate card matters more than ever. A tariff that looks cheap on its headline rate can cost you more if your household runs heavy loads at 6pm.
The Smart Meter Rollout and Why It Makes ToU Possible
Without a smart meter, your supplier only knows your total monthly consumption. With one, they get half-hourly readings, which means they can bill you accurately against a tariff that changes throughout the day. Smart meters enable half-hourly settlement, which underpins most time-of-use tariffs in Great Britain. If you want access to Octopus Agile or the Demand Flexibility Service, a smart meter is effectively the entry ticket.
The Main Types of Time-of-Use Tariff You Will See
UK ToU tariffs fall into three broad families, and it is worth knowing which one fits your home before you switch.
Economy 7 and Economy 10: The Old Guard
Economy 7 provides seven hours of cheaper overnight electricity, typically between midnight and 7am, though exact times vary by region and can shift with BST. Economy 10 stretches this to ten hours, often split between night and an afternoon top-up. These tariffs pair well with storage heaters and immersion cylinders, and they still exist on most suppliers’ books. The catch is that daytime rates are usually higher than a standard variable tariff, so if you cannot shift most of your load into the cheap window, you lose.
Dynamic Tariffs Like Octopus Agile
Dynamic tariffs take ToU to its logical extreme. The Octopus Energy Agile tariff prices change every half hour based on wholesale market rates, which means some afternoons you can pay a few pence per kWh and some winter evenings you will see prices well above 40p. On rare occasions, prices go negative and you are paid to consume. Agile rewards households that can genuinely flex — EV charging, dishwashers, tumble dryers, immersion heaters — and punishes those that cannot.
EV and Heat Pump Tariffs
EV-specific tariffs such as Intelligent Octopus Go offer a very cheap overnight rate (often around 7p per kWh) in exchange for letting the supplier control when your car charges. Heat pump tariffs work on similar principles, with longer cheap windows designed for the way a heat pump draws power. These are the most generous ToU products on the market, but they are only worth it if you actually have the hardware.
How Smart Plugs Turn ToU Tariffs Into Real Savings
Signing up for a ToU tariff is the easy part. The savings come from actually moving load, and this is where smart plugs earn their place on the plugboard.
Scheduling Appliances for Off-Peak Windows
A smart plug with scheduling lets you run a device automatically inside a cheap window, regardless of whether you are awake. TP-Link Tapo P110 smart plugs include energy monitoring and scheduling without a hub, which makes them one of the cheapest ways to automate a washing machine, dishwasher, tumble dryer or dehumidifier. You set the schedule once in the Tapo app and the plug handles the rest. Amazon Smart Plug and Shelly Plus Plug S offer similar functionality, with Shelly being the pick if you want local control and no cloud dependency.
Using Energy Monitoring to Find Load-Shifting Candidates
Before you schedule anything, measure it. Plug a monitoring smart plug into each suspect appliance for a week and look at the kWh. In our own testing, the tumble dryer and the dishwasher were the two biggest shiftable loads, while the fridge and broadband router were untouchable. A monitoring plug tells you which devices are worth automating and which are not — and it stops you from wasting effort on a 40W device when a 2,500W one is sitting right next to it.
Demand Response, Smart Meters and the National Grid
ToU tariffs are the consumer-facing side of a much bigger system. The grid itself needs homes to reduce demand at peak, and it is now paying for that flexibility.
What Is Demand Response and Who Runs It?
Demand response is when households and businesses reduce or shift electricity use in response to a signal, usually in exchange for payment. The ESO Demand Flexibility Service has paid UK households to reduce peak electricity use since 2022, with events typically triggered on cold winter evenings when margins are tight. Participants with smart meters get notified, turn things off or delay them for an hour, and receive a credit on their bill. Octopus, British Gas, EDF and others all run versions of this for their customers.
How Smart Meters Enable Half-Hourly Settlement
None of this works without accurate time-stamped data. Smart meters record consumption every 30 minutes and send it back to the supplier, which allows settlement — the process of matching what was used against what was bought — to happen at half-hourly granularity. That is what makes dynamic pricing, DFS payments and EV smart charging possible. An old-style meter simply cannot support it.
Is a Time-of-Use Tariff Right for Your Home?
ToU is not automatically cheaper. It is a trade: you accept a higher peak rate in exchange for a lower off-peak rate, and you only win if you can shift enough load. Run through this checklist honestly.
- Do you have an EV, a heat pump, a home battery, or a hot water cylinder with an immersion?
- Can you run washing, drying and dishwashing outside 4pm–7pm?
- Do you have a smart meter installed and communicating properly?
- Are you willing to check an app or set schedules rather than press a button when convenient?
- Is your household electricity use above roughly 2,900 kWh a year, or heavily concentrated in a few big appliances?
Who Saves the Most From ToU
EV owners, heat pump households, homes with solar plus battery, and anyone with genuinely flexible working hours tend to save the most. If you can move 40% or more of your consumption into cheap windows, ToU usually beats a flat tariff comfortably.
Who Should Probably Avoid ToU
If you are out at work all day, cook and wash in the evening, have no EV and no storage, a ToU tariff will likely cost you more. Standing charges are often the same as a standard tariff, but the peak rate is higher, and if you cannot avoid it you are simply paying more for the same electricity. Households with electric resistance heating and no storage should also be cautious.
Our Practical Setup: Smart Plugs, Monitoring and a ToU Tariff
We have been running a ToU setup at home for over a year, and it has changed how we think about the plugboard more than any app or dashboard.
The Kit We Actually Use
Our setup is deliberately cheap and boring: a handful of TP-Link Tapo P110 monitoring plugs on the tumble dryer, dishwasher and a desk setup; a smart meter in-home display on the kitchen counter; and an Octopus Agile tariff syncing everything to half-hourly prices. We check the next day’s Agile rates each evening, set the Tapo schedules accordingly, and let the plugs do the work. The IHD gives us a live read on what the house is drawing so we can spot anything unexpected.
What We Would Do Differently
Two things. First, we would buy monitoring plugs earlier — guessing which appliances mattered wasted a month. Second, we would not try to automate everything at once. Starting with the tumble dryer and dishwasher delivered most of the benefit, and adding more devices just created more schedules to maintain. If we were starting again, we would buy two Tapo P110s, measure for a fortnight, then decide.
FAQ
Do I need a smart meter to get a time-of-use tariff?
Yes, in practice. Almost all UK ToU tariffs, including Octopus Agile and Intelligent Octopus Go, require a smart meter because the supplier needs half-hourly consumption data to bill you correctly. A few legacy Economy 7 setups still run on older meters, but new sign-ups generally need a smart meter installed and communicating.
Can a smart plug really save money on its own?
Not by itself. A smart plug saves money when it is paired with a ToU tariff and used to shift a genuinely heavy load, like a tumble dryer or dishwasher, into a cheaper window. Used on a flat tariff with no scheduling, it is mostly a convenience device.
What is the cheapest smart plug with energy monitoring?
The TP-Link Tapo P110 is consistently one of the cheapest options that includes both energy monitoring and scheduling without needing a hub. Shelly Plus Plug S is a good alternative if you prefer local control, and Amazon Smart Plug is fine for scheduling but does not include detailed energy monitoring.
Is Octopus Agile worth it without an EV?
It can be, but only if you have other shiftable load — a dishwasher, tumble dryer, immersion heater or home battery. Without those, Agile’s volatile evening prices can easily cost more than a fixed tariff.
How do I join the Demand Flexibility Service?
You need a smart meter and an electricity supplier that participates. Most large UK suppliers, including Octopus, British Gas and EDF, run DFS events for their customers. You opt in through your supplier’s app or account, and you get notified before each event.
Time-of-use tariffs reward flexibility, not sacrifice. You do not have to sit in the dark to save money — you just have to move the big loads into the cheap windows, and the cheapest first step for most UK households is a couple of energy monitoring smart plugs and a smart meter that is actually communicating. Get those two things right, and the rest of the ToU puzzle falls into place.