Now, with energy prices skyrocketing, more UK households are adopting time-of-use tariffs to save money on electricity. One of the most exciting of these is Octopus Energy’s Agile tariff. It provides dynamic pricing so that the amount you pay depends on when you make the reservation. This novel use of behavioral science provides users an opportunity to save big on their bills—hundreds of thousands of users have saved as much 30% on average.
Octopus Energy’s Agile tariff requires a compatible smart meter, and as such usually includes half-hourly billing. This risk-based tariff has been very popular with consumers, as more than 10,000 households use the tariff today. The Agile tariff actively incentivises consumers to change their patterns of electricity consumption. By moving usage to times with less demand, they’ll be able to benefit from lower prices.
Agile tariff customers are given at least 24-hour notice of their pricing, which is typically provided around 4 PM the day before. This enables them to adjust their energy consumption based on the rates established for the next day, up to 24 hours in advance. The pricing in real-time changes dramatically on an hourly basis, reflecting consumer demand and constantly shifting energy supply in the heavily traded wholesale market.
Many users have reported substantial savings. Take Amy and Luke Roberts, who have been on the Agile tariff for six weeks. They didn’t just cut their electricity bills by 20-30%, smart these guys! In fact, they’ve had the amazing experience of being paid for every kilowatt of power they use at times when energy consumption is the least desirable.
“For us, it’s about making our home the greenest it can be,” – Luke Roberts
With the tariff’s savings potential, that’s a big deal. Only customers who are willing and able to change their energy usage patterns will reap the full benefits, saving these customers hundreds of pounds each year. This local flexibility goes a long way in helping individual households make the most meaningful and positive impacts. It helps lower total system costs, which saves all consumers money and helps accelerate a cleaner energy grid.
“By moving their energy consumption and using less electricity during peak times, customers could save hundreds of pounds a year on their energy bills. But they are not the only ones who are benefiting. By reducing overall system costs, they are also saving everyone else money while also helping to speed us towards a green grid free from dirty fossil fuels,” – Alex Schoch, head of flexibility at Octopus Energy.
This is the Roberts’ big play — take advantage of low-cost electricity during off-peak hours to charge batteries that can be used later. Luke is hoping to keep this practice up in the winter months when their solar panels will not generate enough energy on their own.
“I’m aiming to use the super-low-rate electricity to charge the battery at night during the winter, as and when the panels won’t produce enough. It should mean the end of electricity bills, or very small ones at the very least,” – Luke Roberts
Octopus Energy’s competitive product array “Our products are all telecom-style unbundled.” At the same time, 100Green is making its own move into the time-of-use market with their Tide tariff that uses fixed pricing at set periods each day.
The National Grid has launched a trial scheme designed to encourage energy conservation, where households can earn up to £3 per kWh for each unit of electricity they save. This program fulfills Octopus Energy’s promise of holding at least 12 national energy-saving workshops this winter. We’ll reserve about an hour for each session.
Last winter, British Gas customers received an average of £28.56 each in payouts from similar schemes. These programs are extraordinarily popular, with more than 250,000 customers enrolled and counting. Savings will average £30/£40 by year end for a typical household.
Utility companies are moving very quickly into these flexible pricing models. This sea change provides UK households with unprecedented choice and control over how and when they use electricity. Sign up for time-of-use tariffs and participate in energy-saving programs! You’ll save money and contribute to the development of a more resilient and equitable energy future.