The UK electricity grid is not a flat pipe you draw from at a fixed cost. Its price fluctuates by the minute based on supply, demand, the mix of generation on the system, and the capacity constraints of the network at any given moment. At 2am on a windy night in January, when wind turbines are spinning and most of the country is asleep, wholesale electricity can cost close to nothing. At 6pm on a cold, still evening, it's some of the most expensive energy on the planet.
But here's the problem: if you're on a standard variable tariff - which describes most UK households - you pay exactly the same flat rate regardless of when you use electricity. You get none of the benefit of cheap overnight periods and bear none of the cost signal from expensive peak periods. The grid's pricing structure is invisible to you.
Time-of-use tariffs change that. They pass some of the grid's real pricing structure through to your bill, creating windows of genuinely cheap electricity that you can plan around. The catch is that you need a compatible smart meter to access them - and you need to actually switch to one.
When is electricity actually cheapest?
Without a time-of-use tariff, the question is unanswerable for your specific bill - because the price doesn't change for you. But on the underlying wholesale market, the pattern is consistent:
Typical Electricity Price Pattern - Wholesale Cost Shape
Illustrative only. Actual prices vary by day, season and renewable output. On a flat SVT, you pay the same rate across all periods.
The 4–7pm window is the consistent pressure point. It's when homes across the country turn on ovens, heating, televisions and lighting simultaneously - and when grid operators have to fire up the most expensive gas peakers to meet demand. Wholesale prices reflect that squeeze directly.
Overnight - roughly midnight to 6am - is the inverse. Demand is low, renewable generation (especially wind) often runs at or near capacity, and the grid operator is sometimes actively trying to find somewhere to put excess electricity. This is the window that time-of-use tariffs are designed to let you exploit.
Important caveat: On windy or sunny days, cheap periods can occur at almost any time. Octopus Agile, which reprices every 30 minutes, can deliver sub-5p electricity during a midday solar surplus, or even negative prices - where you're paid to use electricity - during periods of exceptionally high renewable output. The overnight window is the most reliable cheap period, but it's not the only one.
But I can't benefit from this on a standard tariff
Correct. And this is the fundamental point that most "cheapest time of day" articles bury or skip entirely.
If you're on a Standard Variable Tariff - the default that most households end up on - your electricity costs the same unit rate at every hour of the day. The April 2026 price cap sets the average SVT unit rate at around 24.5p/kWh. Whether you run your dishwasher at 2am or 6pm, you pay 24.5p per unit consumed. The grid's pricing structure simply doesn't reach you.
To access cheaper overnight rates, you need two things:
- A SMETS2 smart meter (or an upgraded SMETS1) that can transmit half-hourly consumption data to your supplier. Traditional meters record only total consumption, not when that consumption happened.
- A time-of-use tariff that actually varies rates by time of day or by half-hour period.
Your supplier is legally obliged to install a smart meter free of charge on request. If you don't have one, ask - and if you're waiting for one, get on the list now, because the rollout has been sluggish and installation slots are still limited in some areas.
Don't have a smart meter yet?
Contact your supplier and request one. Installation is free and legally required on request. Without a SMETS2 meter sending half-hourly data, no time-of-use tariff will work for you - and you'll remain on the same flat rate regardless of when you use electricity.
MHHS: why this is about to become much more relevant for everyone
The UK is in the middle of one of the biggest reforms to electricity billing since the market was deregulated in the 1990s. It's called Market-Wide Half-Hourly Settlement (MHHS), and it matters enormously for the future of time-of-use tariffs.
Currently, most household electricity meters settle in bulk - a supplier buys electricity for a pool of customers based on estimated consumption profiles, rather than what those customers actually used in each half-hour slot. This means suppliers can't accurately price time-of-use tariffs for most customers, because they don't have the granular data to do it properly. Only a subset of smart meter customers - those whose data is already flowing half-hourly to the system - can access the best TOU products.
MHHS changes this by mandating half-hourly settlement for every electricity meter in Great Britain, domestic and commercial. When fully implemented, every supplier will know exactly what every customer consumed in every 30-minute window, settled against the actual wholesale cost of that electricity in that slot. The incentive to offer - and the economics of offering - genuinely granular time-of-use tariffs will shift dramatically.
September 2025 - Central systems go live
Elexon deployed new central systems capable of processing the vast increase in half-hourly data. Industry code changes, including MPAN top-line modifications, took effect from 22 September 2025.
October 2025 – October 2026 - Migration begins (in progress)
Suppliers begin migrating their customers' MPANs to the new half-hourly settlement arrangements. Elexon expects approximately 80% of meters migrated by October 2026. The process happens behind the scenes - most customers won't notice anything changing on their bills yet.
May 2027 - Full completion
MHHS goes fully live. All electricity meter points in Great Britain settle on actual half-hourly data. The settlement window shrinks from the current 14 months to just 4 months. Ofgem expects net benefits to consumers of £1.6bn–£4.5bn over 2021–2045, largely through more accurate pricing and expanded time-of-use products.
What MHHS means for you practically: In the near term, nothing changes automatically on your bill. But as migration completes, the infrastructure that makes half-hourly pricing reliable and economically viable for suppliers will be in place for the whole market - not just Octopus customers with SMETS2 meters. Expect more suppliers, more competitive TOU products, and better-designed tariffs from 2027 onwards. The window to get on a smart meter and a TOU tariff is now, before everyone else does.
The time-of-use tariffs available right now
TOU tariffs split into two broad types. Two-rate tariffs give your whole household a cheap rate during a defined off-peak window - everything benefits, from the dishwasher to the EV charger to the immersion heater. Add-on tariffs apply the cheaper rate only to EV charging, leaving your general household consumption on the standard rate. Two-rate tariffs are generally more valuable if you can shift significant household usage overnight.
All of the following require a SMETS2 smart meter (or equivalent) capable of half-hourly readings.
How much can you actually save?
The honest answer is: it depends heavily on your lifestyle. Time-of-use tariffs are not universally better than a flat rate - for some households, they're worse.
The calculation hinges on two variables: how much electricity you can shift to off-peak hours, and how punishing the peak-hour rate is on your chosen tariff. Every TOU tariff offsets its cheap overnight rate with a higher peak rate. If you work from home and use substantial daytime electricity - particularly in the 4–7pm window - a TOU tariff's elevated peak rate may cancel out your overnight savings entirely.
The households that benefit most are those with large, schedulable loads: EV owners who can charge overnight, homes with heat pumps that can pre-heat during cheap periods, and properties with home battery storage that can arbitrage between cheap and expensive periods. For a typical EV driver, shifting from SVT charging to an 8p/kWh overnight tariff can save several hundred pounds per year on charging alone - and that's before any savings on general household usage during the off-peak window.
The rule of thumb: Economy 7 requires at least 40% of your electricity usage overnight to be worth switching. For newer smart TOU tariffs, the threshold is lower because the rate differentials are better-designed - but you still need to be able to run your biggest loads (EV, washing machine, dishwasher, immersion heater) during the cheap window. If you can't shift at least 20–30% of usage to off-peak, check your whole-bill maths carefully before switching.
What MHHS means for the tariff market
Right now, sophisticated TOU tariffs are largely the preserve of Octopus Energy - which has invested heavily in the data infrastructure to make half-hourly pricing work at scale, and which was processing half-hourly settlement for its customers long before the rest of the market. Agile, Go, Intelligent Go, Cosy and Tracker are genuinely innovative products with no direct equivalent from most other suppliers.
MHHS will change that competitive dynamic. Once every electricity meter in the country is settled half-hourly by mandate, the data infrastructure barrier that currently gives Octopus an advantage disappears. Any supplier will be able to offer half-hourly-priced products with the same data access as Octopus has today. The result, over the next two to three years, should be more suppliers, more varied TOU products, and more competitive pricing across the sector.
This is also why getting a smart meter now matters. When the market opens up post-MHHS, the households already on smart meters and TOU tariffs will be positioned to take advantage of whatever new products emerge. Those still on flat-rate meters will be starting from scratch - and may find their supplier's attention is focused on onboarding new TOU customers rather than upgrading legacy ones.
The bigger picture: The shift to half-hourly settlement is not just about consumer savings - it's a structural requirement for a grid that runs on variable renewables. Solar and wind don't produce at a constant rate; a system that prices electricity the same at all hours provides no signal to consumers to use energy when it's abundant and cheap, and avoid it when it's scarce and expensive. MHHS and the TOU tariffs it enables are how the grid eventually absorbs very high levels of renewable generation without requiring massive over-investment in peaking capacity. Getting on a smart meter and a time-of-use tariff is one of the few decisions where individual household economics and grid decarbonisation point in exactly the same direction.