Economy Tariffs, or False Economy? - Climastar
Sustainability Harmony Climastar UK

Economy Tariffs, or False Economy?

In the UK, there are a variety of electricity economy tariffs . One of the more popular economy tariffs is Economy 7 – which was popularised by the use of Night Storage Heaters (NSH).

With many of our customers upgrading from NSH and seeking out more efficient electric heating systems and electric radiators – typically paired with the economy 7 tariff with their energy suppliers, we often get asked about the benefits (and pitfalls) of economy tariffs and making future changes.

RE: Economy Tariffs,  What is Economy 7 (E7)?

E7, is mainly in reference to the meter type that goes with the E7 tariff. The idea is that for a 7 hour period during the evening / night, electricity is charged at a cheaper (or economy) rate.

Sometimes this is referred to as “off peak”, and theres usually the E7 rate associated with this for the 7 hours at night. Your meter will probably show 2 different numbers to refer to different rates (normally rate 1 or R1, rate 2 or R2) – or you may have a specific dedicated Economy 7 meter dependent on your requirements.

If you currently have night storage heaters and use them to “charge” overnight on an E7 tariff, then you’re making use of the cheapest time to do so.

Economy Tariffs, or False Economy?

While that may be something to shout about in today’s world of energy price hikes, not all 7’s are lucky.

There are some less obvious considerations that come with the boons presented by E7.

  • Electricity is more expensive when not “off peak”. Aside from being a considerable jump in different from your E7 / off peak rate, this is also usually more expensive per unit of electricity.
  • Using E7 to charge your storage heaters may seem cost effective, but your NSH will be charging when it’s coldest and require more energy to do so.
    • Equally, once all the heat has been released, you may need to source additional heating at night to keep warm (when not on E7 tariff, and potentially spending more).
  • If you spend a lot of time at home, especially during the day when on E7, you may end up spending more with your use of appliances. It may be worth checking with your energy provider if E7 is still the most economical option for you.

Economy Tariffs (specifically Economy 7) came about in the late 1970s and was coined as a term by Jon Marshall – with the “7” referring to 7 hours during the night when electricity  changed to a cheaper rate during those times.

It focussed primarily on the higher drain appliances such as night storage heaters during those times – although it was also popularised to utilise the economy 7 tariff as a time to carry out other tasks such as laundry with washing machines and tumble dryers (also appliances which are known to consume higher amounts of electricity). Economy 7 was also especially useful for heating up water tanks and immersion heaters in readiness for the morning, so that washing and bathing could be done with hot water in readiness.

You can also save energy (and potentially money) by making use of a more energy-efficient hot water source.

At Climastar UK we have a solution by utilising thermal heat battery storage to create an energy-efficient hot water solution.

It is also possible to obtain “free” hot water when used in combination with a system boiler in some circumstances.

Visit here to find out more:

Electric Water Heater

Further general information can be found on Economy 7 at Ofgem’s website: Economy 7 consumer guide | Ofgem

How is Harmony by Climastar different?

We have found that many of our customers, having moved from E7 to a 24h flat rate with the Harmony system have made considerable savings on their electricity consumption. This is due to a variety of efficiencies with the harmony system – but equally with a flat rate electricity tariff that’s a lot easier to plan for.

With the additional benefit of variable power rate radiators, and smart heating controls you can maximise the efficiencies on your power consumption, and possibly your bills with what we feel are the best electric radiators for efficiency. You’ll also be doing your bit to reduce your carbon footprint.

A little while back we posted an article with ways that you can save with Energy Efficient Radiators – click here to find out more. 

Is there a future for Economy Tariffs & Economy 7?

The UK Government has stated that E7 tariff is being phased out, in line with the closure of all coal-based power plants by 2030.

In respect of this, it’s worth considering that there may not really be a future market in this way for storage heaters either. Without cheaper tariffs and with increasing energy costs – NSH would be considerably more expensive to run.

When thinking larger scale in terms of industry, without the demand for NSH production of storage heaters may decline considerably.

In addition to this, at the beginning of 2023 it was announced that users of E7 as a tariff saw a dramatic rise in unit rate, a shock for many who were relaying on this tariff to keep energy bills as low as possible.

Where does that leave me? Is it time to leave Economy Tariffs behind?

In many industries, the common phrase and goal is to be “ahead of the curve”. With this in mind, we hold with some confidence that our range of products including the Harmony range by Climastar, can help you to do that.

Our heating consultants have a wealth of experience and knowledge, and can help you to get a better idea of what you may need if you’re looking to improve your heating and your home climate.

We offer a free, no obligation, no nonsense home survey whereby we can do all of the legwork and working out for you.


If this is of interest to you, please follow the link below:

Request a Survey

Request a Free Brochure

Thinking of changing your existing heating system, or building a new home or extension and want some information on the best heating system to compliment your lifestyle?


Get In Touch