Electricity Tariff explained
Your electricity tariff is the pricing structure your energy supplier uses to bill you. Understanding your tariff is essential for calculating solar savings accurately.
Most tariffs have two components:
- Unit rate: the price per kWh you pay for each unit of electricity consumed. UK average in 2024–2026: approximately 24–28p/kWh
- Standing charge: a daily fixed charge (typically 40–60p/day in the UK) that covers your connection to the grid, regardless of how much electricity you use
Solar reduces your unit rate consumption but rarely eliminates the standing charge — you still pay to be connected to the grid. This means your annual bill savings are calculated on unit rate savings alone, not the standing charge.
Types of tariff:
- Fixed tariff: unit rate locked for a term (6–24 months), providing cost certainty
- Variable/standard rate: rate changes with Ofgem's price cap — the current default for most UK households
- Time-of-use (TOU): different rates at different times of day, allowing smart self-consumption and battery management strategies
- Economy 7/10: cheaper overnight rates, useful for EV charging and storage batteries