What is Economy 7? Is it worth it?

Choosing the right tariff plan for your business can make a big difference in the price you end up paying for electricity. But finding the right plan for your needs can be overwhelming. If you can modify your business practices to make the most of an Economy 7 tariff plan, you could save by switching.

What is Economy 7?

Economy 7 is a time-of-use tariff. This means that the price you pay for electricity depends on when you use it.

With Economy 7, you are charged an off-peak for 7 hours of the day (usually between midnight and 7am). A more expensive rate is charged throughout the rest of the day.

This tariff is extremely useful for those who can manage their electricity usage to make the most of the off-peak hours, while minimising their use during peak hours – where electricity costs can be considerably more expensive.

It CAN save you money. But, you must have a thorough understanding of your electricity usage before committing to an Economy 7 package.

When is it not worth it?

If your business is primarily operational during standard business hours, you will likely not benefit from an Economy 7 tariff plan. Peak usage hours will fall within these hours, and you will not make much benefit of the advantages of Economy 7 if appliances, electronics, HVAC units and lights are on during the day but off at night.

For any business that cannot make the most of off-peak hours, an Economy 7 tariff plan is unlikely to save you money – and could result in considerably higher electricity bills.

When is it worth it?

Economy 7 tariff plans begin to shine when you can control your electricity usage. If you can control the use of electricity during peak hours, and have a thorough understanding of how to maximise the benefits of cheap rates during off-peak hours – you stand to benefit.

Making the switch to Economy 7 is easier when you have a thorough understanding of your current usage, and are confident that you can make the most of your off-peak rates.

How to make the most of Economy 7 tariff plans

First things first. Installing a smart meter will give you a detailed understanding of how your business uses electricity. Half-hourly readings can help you understand what some of the big contributors to your electricity bill are, identify problem areas that can be solved by adopting green energy practices, and will give you clarity about whether a switch to Economy 7 tariffs could work for you.

Maximise the efficiency of your HVAC units by performing regular services, and ensure that storage heaters are charging through the night without releasing heat – so that their heat can be dispensed throughout the day when electricity is more expensive.

Use timers on appliances. This will ensure that appliances use electricity during off-peak hours, rather than during the day. Automating this process allows you to save time and electricity.

Use energy-efficient appliances and lighting solutions. Saving energy during the day will minimise the impact of the more expensive peak-rates. Adopting green energy practices will save you a lot of money both in and out of peak hours.

Charge overnight. Appliances such as cell phones and laptops (and now even cars) should be charged overnight. In many cases, regularly cycling through the battery will increase its longevity, helping to preserve your appliances for longer.

The best tariff plan for you

Before you take the leap into the unknown and sign up for an Economy 7 tariff plan, consult with an industry expert. The process of finding the right plan for your business can be daunting, and having a trusted resource who can identify potential red flags in energy plans is vital to make the most of your potential savings.

At Smarter Business, our team of expert consultants will compare quotes from 27 trusted suppliers to find the right plan for you. We’ll audit your current electricity usage as well as your needs to find a package that saves you money, and provide you with transparent advice so that you pick the right plan for your business now – and into the future.

Contact us for a no obligations quote, to see if you’re ready to switch and save.