Do you have an ‘Economy’ 7 meter?
Energy bills are expensive. The average UK bill is now over £1,300 a year, so many people choose to take advantage of the Economy 7 tariff- the idea being that if you can use energy at off-peak times, you get it cheaper. Many households try to do this, through the use of night storage heaters and timing washing machines and dishwashers to do their dirty work in the middle of the night.
However, some poking around by those champion sorts over at Consumer Focus has found that many people using Economy 7 (or another ‘time of use’ tariff) would actually be better off on a standard tariff.
You see, energy companies have distinct pricing structures for Economy 7 customers, which normally mean these customers cannot take advantage of their ‘headline’ tariffs. Of course, the off-peak energy charges will be lower than standard prices, but no-one can only use off-peak energy. The price differential between non-off-peak Economy 7 prices and standard prices mean that, for some energy providers, customers would have to use up to 45% of their energy at off-peak times. Which is a big ask. The minimum percentage use varies across suppliers and area:
In addition, the research shows that 38 per cent of these economy customers don't even have storage heaters and/or do not regularly use appliances at off-peak times. These people are getting no real benefit from the off-peak tariff and likely be better off on other energy deals.
Another big problem reported by customers is confusion over off-peak times and rates. Many people aren't sure when the cheaper hours are, how much they need to use at off-peak rates to get the benefit of their tariff, and how this compares to their current energy use. Almost six out of 10 (59 per cent) of users think additional information and advice would help them make better use of their tariff and heating system.
Consumer Focus wants energy suppliers to provide better information and advice to consumers on Time of Use tariffs. Consumers need better information on off-peak hours, their electricity use and how to get maximum benefit from their tariff. They said: “ It is especially important that key information including the off peak hours is provided regularly on customers' bills and that those who are not using off-peak rates effectively are proactively contacted and given advice by their supplier. Where customers are not benefiting from being on an Economy 7 tariff, we want to see all suppliers offer to bill them as a standard tariff customer or replace their meter.”
We tend to agree with them. Now, we just need the energy companies to give up this lucrative stream often coming from those with the lowest amounts of cash… But before you start laughing too hard, Consumer Focus are reporting that several suppliers, including British Gas, E.ON and npower have taken up the challenge and have reviewed or will soon carry out a review of their Economy 7 customer base to identify customers who would benefit from being billed as a standard tariff customer.