How Economy 7 works
Economy 7 is the original time-of-use electricity tariff. It was created in the 1970s to encourage overnight electricity consumption during a period when nuclear power stations generated surplus electricity at night that could not be sold. The solution was a two-rate tariff: cheap electricity for seven hours overnight, expensive electricity during the day.
The typical Economy 7 cheap window runs from approximately 00:30 to 07:30, though the exact timing varies by region and meter. Day rates in 2026 typically sit at 28-35p per kilowatt hour. Night rates typically run at 10-14p per kilowatt hour.
Economy 7 was designed specifically for homes with electric storage heaters and hot water cylinders. The idea was to charge storage heaters overnight with cheap electricity, then release that heat during the day. It works well for that purpose. For households without storage heaters or significant overnight loads, the day rate premium often erases the overnight benefit.
Economy 7 requires a twin-rate meter, which records day and night consumption separately. Most Economy 7 households have older analogue or SMETS1 meters rather than the modern SMETS2 smart meters required for Agile.
Economy 7 rates in 2026 versus Agile
The rate gap between Economy 7 and Agile overnight is substantial, and it is where the fundamental case for switching is made.
Economy 7's overnight rate of 10-14p was competitive when it was introduced and remained acceptable for decades. In 2026, it sits significantly above what Agile delivers on a typical night. Agile overnight typically runs at 2-8p per kilowatt hour. The gap of 6-10p per kilowatt hour sounds small but represents enormous annual savings when applied to heavy overnight loads like storage heaters and EV charging.
A single storage heater cycle might consume 3-6 kilowatt hours. At Economy 7's 10-14p, that costs 30-84p per night. At Agile's typical overnight rate of 3-5p, the same cycle costs 9-30p. A household with four storage heaters running nightly from October to March pays a material premium on Economy 7 compared to what they would pay on Agile.
The AgileAlert dashboard shows what Agile is charging right now. On most overnight periods, it is substantially below Economy 7's fixed rate. Compare tonight's Agile overnight range against your current night rate and the case becomes immediately visible.
The overnight rate comparison: Economy 7 vs Agile minimum
Economy 7's night rate is fixed. It never changes. You pay 10-14p per kilowatt hour regardless of whether it is a windy night, a sunny January afternoon with excess solar, or a calm cold peak-demand evening. The rate is set by your supplier and does not respond to grid conditions.
Agile's overnight rate responds to exactly those conditions. On nights when the UK's wind farms are generating at high capacity, Agile overnight can drop to 1-3p. During plunge pricing events, which happen 5-10 times per month, rates go negative, meaning you earn money for consuming electricity. Economy 7 customers capture none of this benefit. Their meter continues ticking at 10-14p while Agile customers run their storage heaters, EV chargers, and washing machines at zero or negative cost.
The asymmetry matters. Economy 7's floor is its fixed rate. Agile's floor is effectively negative. For overnight-heavy households, this difference in the downside is where the real savings compound over a year.
The day rate problem: Economy 7's hidden expensive side
Economy 7 has a structural problem that most households underestimate: the day rate subsidy. Because Economy 7 customers pay a low overnight rate, suppliers recoup that discount through a higher-than-average day rate. Economy 7 day rates of 28-35p are typically several pence above the standard tariff rate and significantly above Agile's typical daytime rates.
Agile's daytime rates in 2026 are typically 8-18p during off-peak daytime hours. The 9am-4pm window, when solar generation is active and demand is moderate, regularly produces Agile rates of 8-15p. Economy 7 customers pay 28-35p for exactly the same electricity at exactly the same time.
A household that uses significant electricity during the day, for cooking, working from home, running appliances, or anything that cannot be shifted overnight, is paying a significant premium on Economy 7's day rate. For these households, the overnight saving is partly consumed by the day rate premium. Agile avoids this entirely: its daytime rates are competitive and variable rather than expensively fixed.
What Economy 7 customers need to switch to Agile
The main practical barrier for Economy 7 customers is the smart meter requirement. Agile needs a SMETS2 smart meter to record half-hourly consumption data. Most Economy 7 homes have an older twin-rate meter that cannot do this.
Smart meter installation is free. Octopus Energy installs SMETS2 meters as part of the switching process. Once your application is submitted, installation is typically booked within a few weeks. The switching process from Economy 7 to Agile follows the standard 17-day switching timeline, primarily to allow for the metering changes.
Your new SMETS2 meter records every 30 minutes of consumption individually. This is what enables Agile's half-hourly billing and what makes the tariff possible. Without it, the system does not exist. The meter installation is the unlock.
If you already have a SMETS2 smart meter and are on Economy 7, the switch is even simpler. You apply via Octopus Energy, confirm the tariff change, and the new rates take effect without any physical meter work.
Who should switch: the three-part test
Three questions determine whether an Economy 7 household should switch to Agile.
First: do you use significant electricity overnight? Storage heaters, hot water cylinders, EV charging, and any appliances you run on timers overnight all count. If your overnight consumption is substantial, the rate difference between Economy 7's 10-14p and Agile's 2-8p represents real money.
Second: can you shift even more loads to overnight? Households that currently run dishwashers and washing machines during the day may be able to move these to overnight delay-start timers. Each kilowatt hour shifted from Economy 7's 28-35p day rate to Agile's 2-8p overnight rate saves 20-30p. On a full washing machine cycle of 1-2kWh, that is 20-60p per wash, compounding to £70-200 per year for a family doing daily loads.
Third: do you have or can you get a SMETS2 smart meter? If you are not sure what type of meter you have, your supplier can confirm. If you have a SMETS2 meter, the path to Agile is straightforward. If you have an older meter, Octopus will arrange free installation when you switch.
If you answer yes to all three, switch to Agile.
What to do with Economy 7 storage heaters if you switch
Storage heaters operate on a simple principle: absorb heat energy overnight, release it during the day. This principle is exactly aligned with Agile. The heaters do not care whether you are on Economy 7 or Agile. They care about when cheap electricity arrives.
On Economy 7, your heaters charge during the fixed overnight window at a known time. On Agile, the cheapest window varies each night. You have two options.
The first option is to use a smart plug or a timer set to the typical cheapest Agile window, broadly midnight to 6am, and accept that you may not always capture the absolute cheapest moments but will significantly beat Economy 7's rate regardless.
The second option is to check the live Agile dashboard each evening and set your heaters to run during the specific periods showing the lowest rates. This takes under a minute and delivers the maximum saving. On nights when Agile goes negative, running your storage heaters during those periods earns you a credit. Economy 7 customers will never experience this.
Modern storage heaters with digital controls make this straightforward. Older models with manual input and output dials can be adjusted manually by setting the input dial higher on cheap nights and lower on expensive nights.
| Feature | Economy 7 | Octopus Agile |
|---|---|---|
| Cheap rate | 10-14p fixed | 2-8p average, can go negative |
| Cheap hours | 7 hours fixed nightly | Variable - 48 prices per day |
| Day rate | 28-35p | 8-18p typical daytime |
| Flexibility | Fixed windows only | Fully dynamic daily |
| Smart meter needed | No (twin-rate meter) | Yes (SMETS2) |
| Plunge pricing | No | Yes - 5-10 events/month |