Electricity Tariffs for the Renewable Home
Choosing the right electricity tariff for you can be pretty confusing. There are hundreds of different tariffs available on the market, so it can be hard to find the perfect one. Price comparison websites are great, if all you are interested in is price, but less helpful if you are interested in other aspects of your supply such as how green it is, where it comes from, or getting the best value for electric cars and home batteries.
This guide talks you through some of the innovative electricity tariffs on the market. The provision of electricity tariffs is now tightly regulated, so suppliers can’t offer more than four different tariffs – intended to cut down of the confusion of offers. This has meant that the traditional Big 6 suppliers focus on standard tariffs with the more niche products in this blog being offered by smaller, newer independent electricity suppliers.
Time of Day tariffs
Some suppliers are now beginning to offer time-of-day tariffs. These reflect the fact that it costs different amounts to generate electricity at different times of day. It costs more to produce electricity at peak times between 4pm and 7pm and less in the middle of the night, and at weekends. You are probably aware of Economy 7 tariffs, which have been around for many years and historically encouraged the use of night-time electricity for electric heating. We are now seeing specific variants on this, especially designed for battery storage and/or electric car charging.
Octopus Flux tariff for home batteries
Octopus Flux is a novel electricity tariff that varies the price of electricity through the day in three bands. Super-off peak is between 02:00 and 05:00 and offers the cheapest prices; peak times are between 16:00 and 19:00 and prices are high; and standard pricing operates at all other times.
Uniquely, Octopus Flux varies the price of both imported and exported electricity according to these bands. The price to buy electricity in the middle of the night is lower than the price paid to export it at peak times. This means you can play the market – buy low, sell high – to create additional revenue from your battery system. All of this can be done on top of storing and using your own solar, and is particularly useful in winter when solar PV output is low.
We’ve written a more detailed explainer of Octopus Flux here – do check it out, as we think it’s an absolute game-changer.
Other electricity Tariffs for Home batteries
There are other supplier offering banded tariffs that are well suited for use with batteries. Once again, these tariffs have low overnight pricing, medium prices in the day and high pricing at peak times between 4 and 7pm. However, unlike Octopus Flux, these tariffs are for import only, and do not change the export price. This means they are better used for topping up a battery with cheap night-time electricity, but holding on to this for your own personal consumption later. It means you can always get the cheapest possible electricity (either from your own solar or in middle of night), but you won’t be able to make money by selling this back to the grid at a premium in peak times.
Green Energy UK offer the TIDE tariff – 7.9p/kWh off peak, 16.3p/kWh standard times, 32.5p/kWh at peak times (at the time of writing). You will need a smart meter installed in order to be able to access these tariffs.
A word of warning though – batteries operate differently throughout the year. Make sure you can still capture enough solar in winter to fill the battery, otherwise you may be importing expensive peak time electricity regardless.
One way round this is to use the Tesla Powerwall, which uses weather forecasts and its own smart algorithm to partially top up the battery with cheap night time electricity, whilst still leaving space for tomorrow’s solar generation. This looks a sure-fire way to ensure that the only electricity you use is either your own solar or cheap night time electricity.
This approach of reflecting the actual cost of generation in your electricity tariff can be taken one step further with real-time pricing. Here, instead of banding pricing by time of day, the price actually varies every half-hour through the year.
Octopus’s Agile tariff is the market leader here. Once signed up, they will send you the next days prices at 4pm, so you can look at these and determine when to use electricity. If national demand is low and there is a lot of renewable generation (e.g. offshore wind) then prices may be very low. Conversely, when demand is high and renewable generation low, prices will be high (winter evenings, when weather is still).
However, the broad pattern of pricing from the Agile tariff is likely to follow a similar profile to the banded time of day tariffs described above. So, once again it means you can avoid high-prices with a home battery (especially with a Tesla Powerwall) and only ever import electricity at the cheapest times.
The advantage of the Agile tariff is that in times of national oversupply of electricity, prices can get very low indeed. If fact they can actually go negative – which means you get paid to fill your battery up!
Electricity Tariffs for EV Charging
A number of new electricity tariffs to support electric vehicle charging have reached the market in recent years, offering cheaper night time charging rates. This allows electric vehicle owners to charge and run their cars as cheaply as possible, whilst also incentivising them not to charge at peak times (i.e. when they get home), which at high volumes could be problematic for the grid.
EV tariffs tend to be banded time-of-day tariffs with two bands, with the cheap band in the middle of the night. The tariffs with three bands described above are also well suited toE V charging.
At the time of writing, the following tariffs and night time rates are available:
- Scottish Power Smart Green Electric Vehicle, 4.74p/kWh
- Octopus Energy Go, 5p/kWh
- EdF Energy Go Electric, 8.01p/kWh
- Good Energy EV Driver3, 10.6p/kWh
- British Gas Green Drive, 11.84p/kWh
For a completely up to date list, you are advised to check ZapMap’s list of EV tariffs.
Green Electricity Tariffs
Given that the environment is a major reason for households to go solar, its no surprise that they want to buy their non-solar electricity from renewable sources as well.
Green electricity tariffs ensure that any electricity supplied to you is matched by electricity produced from renewable electricity sources. All renewable generation comes with tracking certificates (called REGOs), so 100% of your supply is matched with REGOs, to prove its green credentials. Most companies also do something additional on top of this, like investing in generation, tree planting, giving to community energy funds etc. As such there are different styles of green electricity providers, which can broadly be categorised as:
- Green electricity suppliers that invest in new renewable generation, which includes the older, more established green electricity suppliers such as Good Energy and Ecotricity. These companies invest in new wind and solar farms, as well as other associated technologies such as electric vehicle charging infrastructure.
- Green electricity suppliers that pay into funds. The highest profile example here is Marks and Spencer Energy, who pay a contribution per customer into the M&S Community Energy Fund. This fund then provides grants to community energy projects across the country.
- Green electricity supplier that plant trees. Many green electricity suppliers choose to plant trees as a way of providing additional carbon savings, which include Octopus Energy, OVO Energy and Green Star Energy.
Newer Green Electricity Suppliers
The more established green electricity suppliers tend to buy electricity from their own wind or solar farms. Newer green electricity suppliers source renewable power from the cheapest sources they can find. If this includes old hydropower stations (which have been paid for long ago), the supply can be very cheap. Therefore, it’s not uncommon to visit a comparison site and see green electricity suppliers providing the cheapest power on the market – cheaper even than conventional fossil fuel generated electricity.
Local Electricity Tariffs
Price isn’t the only concern for customers when it comes to choosing a tariff and the generation mix received. We are also seeing an increase in the number of tariffs offering local supply, or supply that comes from specific sources.
Municipal tariffs such as Bristol Energy ensure supply comes from generation in the local area, creating a connection between you, the consumer, and the local generation. Whilst this model has proved attractive in theory, the recent failure of the not-for-profit Robin Hood Energy in Nottingham has made local supply seem more risky.
Recently, software company Piclo, teamed up with Good Energy to launch Selectricity – allowing business customers to choose the actual renewable generators that their supply comes from.
This may be the first step in genuine peer-to-peer trading of electricity. Imagine being able to sell your excess solar generation directly to your neighbours. This is some way off yet, but blockchain technology may allow the distributed generation and sale of electricity in this way, cutting out traditional utilities as the middle-man.
- Octopus Flux is the game-changer for home renewable energy tariffs.
- Find out other ways to get the most from your solar
- Here’s how home batteries work, and how they can ride through power cuts.
- We’re helping develop a local electricity market for Oxfordshire