Electricity tariffs are the key to lowering your energy costs

Of course you may also have gas on a dual fuel tariff, but electricity is set to dominate over the coming months and years, as gas is gradually phased out. Being on the right electricity tariff can have a big impact on:

Electric vehicle running costs

If you have a fully electric vehicle (EV), its wheels are turned by one or more electric motors which are powered by a lithium-ion battery. When the battery gets low on charge, it needs to be recharged with electricity.

If you charge your EV with electricity on a typical day rate of 15p per kWh, you will make a big annual saving over petrol/diesel costs in your old vehicle.

However, if you charge your EV at a cheap, off-peak rate of say 5p per kWh, the cost of your annual electric miles will be three times less than at 15p per kWh.

You can see how electricity tariffs are the secret to ultra-low motoring costs that electric cars and vans can deliver.

electricity tariffs electric cars - Electricity Tariffs

Battery storage management

If you have battery storage, such as the Tesla Powerwall, installed at your home or workplace, you can:

  • Store surplus solar electricity for later use, and
  • Store cheap, off-peak electricity for later use.

Remember the Economy 7 meter tariff? It allowed you to heat up your storage heaters at night on a low, off-peak rate. You then paid a higher rate during the day for your normal electricity needs.

You can now do something similar with an electricity tariff like Octopus Go combined with battery storage. Charge the battery during the night at 5p per kWh and then discharge the battery during the day to cover your energy needs, to avoid having to pay a higher day rate.

tesla powerwall battery storage - Electricity Tariffs

Home or workplace energy

Even if you don’t yet have an electric vehicle, battery storage or solar panels, it’s worth hunting around to find better rates.

It’s a very volatile market. The cheapest energy deals one month are soon replaced by a better deal the next.

Innovative energy suppliers to look out for include Bulb, Octopus Energy, Good Energy and EDF, although energy tariff comparison websites don’t always include the best rates for your situation.

We go into more detail about three special electricity tariffs below: Octopus Go, Octopus Agile, and the Tesla Energy Plan.

economy 7 meter - Electricity Tariffs

The best electricity tariffs for EV drivers

Octopus Go

The Octopus Go tariff is ideal for both electric vehicle drivers and owners of battery storage.

It’s a dual rate tariff, with both a day rate of roughly 14p per kWh (depending on your region) and a cheap, night rate of exactly 5p per kWh. The 5p rate runs for a 4-hour period from 00:30 until 04:30 every night.

Using your electric vehicle’s software, or even the app controlling your charging point, you can programme your vehicle only to charge during that cheap 4-hour slot. In 4 hours, you can put about 100 miles of range into your EV. That should be plenty to cover most people’s daily driving needs.

If you have battery storage, you can also charge it up during those precious 4 hours. The Tesla Powerwall, for example, can store 13.5 kWh (units) of electricity. Charge the Powerwall at 5p per kWh at night and then let that cheap electricity discharge to the home or office during the day when you would normally be importing electricity at 14p per kWh. That would represent a 64% saving over the day rate.

If you are interested in signing up to Octopus Energy Go, you can use our referral code to get £50 of your first bill.

EV electricity tariffs - Electricity Tariffs

Tesla Energy Plan

The Tesla Energy Plan is a really good option if you are a Tesla car driver.

You need to meet all of the following criteria to be able to access this electricity tariff:

  • Own or lease a Tesla car.
  • Have solar PV panels.
  • Have a Powerwall battery storage unit.

If you are in the lucky position of having the car, the panels and the battery, then you will enjoy:

  • A rate of just 8p per kWh for any electricity you import, 24 hours a day.
  • The same rate of 8p per kWh for any electricity you export to the grid.

Exported electricity could be from either your solar panels or your Powerwall battery storage. In other words, you are being paid a very generous rate for sending electricity to the grid. Normally, under the Smart Export Guarantee scheme, you would only be paid a maximum of about 5.5p per kWh for exported solar electricity.

The Tesla Energy Plan import rate is also the lowest single rate tariff currently on the market. If you drive a Model 3, Model S, Model X or soon Model Y, this is the tariff for you.

tesla energy plan - Electricity Tariffs

Octopus Agile

The word ‘unique’ is overused these days, but we can apply it to the Octopus Agile tariff with confidence.

Agile Octopus is basically a commercial ‘half-hourly’ tariff applied to a residential setting. The rate you pay for your electricity as a home-owner varies every 30 minutes. The 48 daily tariffs are tied to the wholesale cost of electricity.

The tariff encourages you to avoid importing electricity between 4pm and 7pm each day. These are the peak hours for energy demand around the country when the grid is under stress.

On Octopus Agile, you pay a very high rate between 4pm and 7pm. It could be 24p per kWh, for example. But outside of those peak hours, the tariffs drop and can go as low as 2p per kWh.

In fact, there are occasions when Octopus will even pay you to use electricity! If the grid has too much renewable energy such as a wind and solar, Agile Octopus will set a negative rate for that half hour period, and you will be paid for consuming energy. Radical stuff.

octopus agile - Electricity Tariffs

Summary

To get the best out of your electric vehicle, battery storage or solar PV system, you should switch to an electricity tariff that matches your particular circumstances.

This is what we would advise to make the greatest savings for different customer profiles:

  • Home-owner with a non-Tesla electric car who wants to play it safe:
    Octopus Go
  • Tech-savvy home-owner with a non-Tesla electric car:
    Octopus Agile
  • Home-owner with a Tesla electric car, solar panels, and Powerwall battery storage:
    Tesla Energy Plan
  • Home-owner with solar panels and battery storage, but no electric car:
    Octopus Go
    Octopus Agile (for more adventurous types)
infinity energy services 300x211 - Electricity Tariffs