Time-of-use tariffs for business

Some business electricity tariffs charge one rate for every kWh, whatever time you use it. Others, known as time-of-use tariffs, charge different rates depending on when you use electricity. These range from simple day and night tariffs on older two-rate meters to fully half-hourly pricing on a half-hourly meter. This guide explains how these tariffs work, why network charges vary through the day, what changed about avoiding “triad” peaks and what did not, and how to work out whether a time-of-use tariff could suit your business, with a worked example to show the trade-off.

What is a time-of-use tariff?

A time-of-use tariff charges a different unit rate depending on when you use electricity, usually cheaper overnight and at weekends and more expensive at busy times of day. The idea reflects the real cost of the electricity system: generation, wholesale prices and network capacity all tend to be stretched hardest at particular times, mainly winter weekday afternoons and early evenings, and least stretched overnight.

Time-of-use pricing ranges from simple two-rate tariffs to fully half-hourly pricing:

Type	How it works	Typical meter
Day/night (Economy 7 or similar)	One rate for a night period, usually around 7 hours, and another for the rest of the day	Two-rate meter
Economy 10	Similar, but with roughly 10 off-peak hours split across the day and night	Two-rate meter
Half-hourly time-of-use	A rate can in principle differ for each of the 48 half-hour periods in a day	Half-hourly meter

Our half-hourly meters guide explains which businesses are required to have one and which can choose to.

Who can get a time-of-use tariff?

It depends on your meter. A standard single-rate meter only records one total, so it can’t support time-of-use pricing. To access a time-of-use tariff you generally need:

• A two-rate meter, for a day/night tariff such as Economy 7 or Economy 10, or
• A half-hourly meter, whether that’s a legal requirement for your size of business or a smart or advanced meter you’ve had fitted voluntarily, for more detailed time-of-use pricing.

Ask your current or prospective supplier what tariffs your meter type supports, and check our smart meters for business guide if you’re considering an upgrade.

What makes up a business electricity bill’s time-varying element?

A business electricity price is built from several layers, and only some of them vary by time of day. Broadly:

• Wholesale energy costs, which move with the wholesale market and tend to be higher at times of high system demand and lower overnight, when demand and often wind generation output are more favourable.
• Network charges, covering both the distribution network in your local area (DUoS) and the transmission network (TNUoS). DUoS can be time-banded, as explained below. The TNUoS residual is a fixed daily charge, but half-hourly sites still pay a locational element based on their demand during the winter triad periods.
• Policy and environmental costs, such as the Contracts for Difference and Capacity Market costs suppliers pass through, which don’t generally vary by time of day.
• The supplier’s own margin and any broker fee.

A time-of-use tariff mainly reflects the first two layers. Our guide to how to read a business energy bill breaks down what each of these charges looks like on your statement, and our market data page tracks how wholesale prices move.

How do network charges vary by time of day?

The distribution part of your network charges, known as DUoS (Distribution Use of System), is typically time-banded for half-hourly customers, split into Red, Amber and Green periods. Red bands are the most expensive and generally cover weekday afternoon and evening hours in winter, when the local network is under the most strain. Green bands are the cheapest and generally cover nights and weekends, when demand is lowest. Amber sits in between. The exact hours and how they’re set are decided separately by each of the 14 electricity distribution network operators in Great Britain, so they differ by region.

Ofgem’s Targeted Charging Review looked at how the residual, fixed-cost element of network charges is recovered, alongside these time-varying charges, to make sure the system is fair between different types of customer.

Red band charges usually only apply on winter weekdays, when demand across the network is highest; many distribution network operators don’t apply a red band at all in summer months. That means the value of shifting load out of peak hours is generally greatest in winter and much smaller, or negligible, for the rest of the year. Ask your network operator or supplier for the specific time bands and months that apply at your site, since they are set locally rather than nationally.

Do businesses still benefit from avoiding “triad” peaks?

Yes, if you are on a half-hourly meter, but for less of the bill than before. Transmission (TNUoS) demand charges have two parts, and only one of them changed.

• The residual. This used to be the prize for triad avoidance. Following Ofgem’s Targeted Charging Review, it has been a fixed daily charge since 1 April 2023, set by the capacity band your site sits in. Reducing demand at triad periods does nothing for this part.
• The locational element. This did not change. NESO charges half-hourly sites a £/kW tariff based on the demand they take during the three triad half-hours each winter: the three half-hours of highest net system demand between November and February, separated by at least ten clear days. Lowering demand across those half-hours still lowers this part of the charge, and how much it is worth depends on the tariff in your demand zone.

Non-half-hourly sites are not charged on triads at all. Their transmission charge is based on consumption between 4pm and 7pm each day.

So triad avoidance is worth less than it was, and worth nothing at all to a smaller non-half-hourly business, but it has not disappeared for half-hourly sites. If your business has historically managed load around triad forecasts, the question to ask your supplier or energy manager is what the locational element is worth in your zone now, rather than whether triads still matter at all.

Is a time-of-use tariff worth it for your business?

It depends on how much of your usage you can genuinely move to cheaper periods, not just on the headline day and night rates. Before switching:

1. Look at your load profile. A half-hourly meter or a data logger on your incomer will show when you actually use electricity. Our half-hourly meters guide explains how to get this data.
2. Identify what can shift. Processes like charging equipment, running dishwashers or laundry, pumping, or charging a battery or electric vehicles overnight are often movable. Heating, lighting and most customer-facing equipment usually isn’t.
3. Compare on total annual cost, not the headline rate. A cheap night rate is only worth it if enough of your consumption happens, or can be moved, into that window. Our unit rate vs standing charge guide explains how to compare tariffs properly.
4. Check the standing charge and any capacity charges too, since these don’t vary by time of day and can offset savings from a cheaper unit rate.

Businesses that run significant overnight processes, or that are considering battery storage or EV charging to shift demand into cheaper periods, tend to get the most out of time-of-use tariffs. A business with a flat, daytime-only load is less likely to benefit.

Businesses that tend to benefit

• Manufacturers or processors that can run some equipment overnight or at weekends.
• Sites installing battery storage or EV charging that can be scheduled outside peak hours.
• Cold storage, water pumping or other operations with some flexibility in when they run.
• Businesses on Economy 7 or similar tariffs already, where the timing of use is well understood.

Businesses less likely to benefit

• Retail, hospitality and office premises where most demand happens during opening or working hours and can’t realistically move.
• Sites with a small, simple electrical load where a fixed, competitively priced flat tariff is easier to budget against.
• Anyone unable to get reliable data on their own load profile, since a time-of-use tariff is hard to evaluate without it.

Worked example: shifting a movable load

This is an illustration only, using rounded example rates, not a real tariff. Replace the inputs with your own quotes and consumption.

Input	Value
Movable load (e.g. overnight charging, laundry, pumping)	5,000 kWh a year
Example flat unit rate	25p per kWh
Example day rate on a two-rate tariff	27p per kWh
Example night rate on a two-rate tariff	15p per kWh

On the flat tariff, that movable load costs about £1,250 a year. Moved entirely onto the example night rate, it would cost about £750 a year, a saving of around £500 on that portion of usage alone. But the day rate on the two-rate tariff is higher than the flat rate, so every kWh you can’t move to the night period costs more than it did before. The result only works in your favour if enough of your total usage is genuinely movable, which is why modelling your own load profile against a real quote matters more than comparing headline rates.

How does market-wide half-hourly settlement affect time-of-use tariffs?

Great Britain is moving towards settling every electricity meter on actual half-hourly consumption, rather than estimates, which is likely to make time-of-use and half-hourly pricing more common over time. Elexon, which runs the Balancing and Settlement Code, began migrating meters to Market-wide Half-Hourly Settlement (MHHS) in October 2025. By October 2026, around 80% of meters are expected to have moved to the new arrangements, with full completion expected by mid-2027.

In practice, this means more businesses, including smaller ones without a mandatory half-hourly meter today, are likely to be offered more granular time-of-use pricing as the transition progresses, since suppliers will be settled on your actual half-hourly usage rather than an estimated profile.

How do you check or switch to a time-of-use tariff?

1. Ask your current supplier what time-of-use options are available for your meter type and usage.
2. Get your load profile, either from your existing half-hourly data or a temporary data logger, so you can see when you actually use electricity.
3. Model any quote against your real load profile, not just the average rate, ideally using a spreadsheet with your actual hourly or half-hourly consumption.
4. Check the standing charge, any capacity charges and the contract length alongside the unit rates.
5. Review site by site if you run multiple premises, since load profiles often differ a lot between them.
6. Ask what happens outside the modelled bands, for example on bank holidays or during unusual trading hours, since some tariffs treat these differently.
7. Revisit the decision if your equipment or opening hours change significantly, since a tariff that suited last year’s load profile may not suit this year’s.

Once you understand your own load profile, compare business energy quotes to see whether a time-of-use tariff or a standard fixed-rate contract works out cheaper for how your business actually uses electricity.

Frequently asked questions