Time-of-Use Tariff explained
A time-of-use (TOU) tariff offers different unit rates at different times of the day and sometimes week. They're increasingly popular with solar and battery owners because they reward smart energy management.
Common TOU tariff types:
- Octopus Agile: half-hourly rates tracked in real-time against wholesale electricity prices. Prices can go negative (you get paid to consume) during periods of high renewable generation. Peak rates can hit 50–80p/kWh in winter demand spikes
- Octopus Flux: designed specifically for solar + battery households, with three daily periods: cheap overnight charging, daytime solar generation, and evening peak export rates up to 30p/kWh
- Economy 7: a simple two-rate tariff with 7 hours of cheap overnight electricity (usually 11 pm–6 am) at roughly 8–12p/kWh, and a higher daytime rate
For solar owners with a battery, TOU tariffs open up energy arbitrage: charge your battery cheaply overnight and discharge during peak price periods. Combined with solar generation, a well-optimised home on an Agile tariff can cut annual electricity costs by 50–70%.
The downside: complexity. TOU tariffs require active management or a smart battery/inverter system that can automate charging and discharging decisions based on price signals.