Time of Use Tariffs: Making The Most of your Power
The last few years have seen an increasing roll-out of time of use energy tariffs, which allow owners of smart meters to pay varying rates for their energy depending on supply and demand on the national grid . This is great news for consumers, especially if they are using battery storage systems or EV charging points. In this article, I’ll break down how these tariffs work, how they can benefit you and how our systems can help you take full advantage of the benefits they present.
Know Your Options: Static or Dynamic?
There are two options when it comes to smart time of use tariffs: static and dynamic. You’ll need a smart meter to use either and both have their own pros and cons.
A static tariff will charge different rates for electricity dependent on the time of day. However, these rates are fixed and will be the same from day to day. For example, a lot of smart tariffs will provide discounted electricity at night due to the lower demand at this time. A static tariff allows for some variation in electricity prices while still maintaining a level of predictability about what you’ll be paying at a particular time of day.
Under a dynamic tariff, the rate you pay will change not only based on the time of day but also from day to day. This will often be tied to the wholesale price of electricity so, for example, if generation power is expected to outstrip demand, you may get a very cheap rate for your power. In some situations, you may even be paid to take power off the grid.
The benefits of this type of tariff are obvious. By timing your consumption right, you can get significant savings on your energy bills. However, you do need to manage consumption more actively under a dynamic tariff.
Time of Use Tariffs And EV Charging
Time of use tariffs are great for charging electric vehicles. In fact, there are a number of tariffs designed for exactly that purpose. These tariffs are an excellent option for electric vehicle owners, who can charge them overnight when electricity is cheapest under a typical time-of-use tariff . Developments in Vehicle-to-grid technology will make it increasingly viable to discharge surplus power to your grid or into your home during peak times, making this option even more attractive!
Time Of Use Tariffs And Battery Storage Systems
This is where things get really exciting. Many battery storage systems allow you to purchase energy at one time for use later . This allows you to take full advantage of the lower rates under time of use tariffs even if you aren’t using electricity. Just power your battery up at night for use in the day!
Battery storage systems work especially well with dynamic tariffs. Many tariffs provide advance notice of a substantial drop in prices. Your battery can be set to automatically to charge during this time and ensuring you always get the lowest possible rates for electricity.
Oh, and it helps the environment too!
One of the big barriers to the adoption of renewable energies for generation of National Grid electricity is that they can’t be ramped up and down to meet demand. We can’t control when the sun shines or the wind blows. By purchasing off-peak energy, you’ll be helping to ensure that wind power gets used even where there wouldn’t usually be the demand for it, ensuring that we make the most of our natural resources.