How cutting electricity bills can also cut carbon

The average UK household pays about 24p per kWh for electricity, but at 3am on a windy night, that same electron costs the grid less than 5p. The gap between those numbers is a £270-a-year opportunity for a typical three-bed semi, according to analysis published by BusinessGreen last week.

As reported by BusinessGreen, the UK’s electricity system is increasingly powered by renewables, wind and solar now account for over 40% of generation. Yet the wholesale price of electricity is still set by the most expensive gas plant running at the time. That means when the wind drops and gas fires up, everyone pays the gas price. But when renewables are abundant, the wholesale price can fall to near zero. The catch: most households are on flat-rate tariffs that never pass those savings through.

Who qualifies, and who doesn’t

Time-of-use tariffs are not new. Economy 7 has existed since the 1970s. But today’s smart tariffs, such as Octopus Agile, OVO Beyond, and EDF’s GoElectric, are different. They track wholesale prices in near-real time, giving households a direct line to cheap renewable power. A typical household with a smart meter can save £200–£270 a year by shifting 30% of its electricity use to off-peak hours, according to Energy Saving Trust modelling.

But the savings are not evenly distributed. Households without smart meters, about 30% of UK homes, cannot access these tariffs. Neither can those on prepayment meters, though Ofgem is consulting on extending smart metering to that group by 2026. And the biggest gains go to homes with electric vehicles or heat pumps, which can shift large loads to cheap hours. A typical EV owner on a smart tariff can save £400–£600 a year on charging alone, Octopus data shows.

What it costs a typical 3-bed semi

For a home without an EV or heat pump, the savings are smaller but still material. A 3-bed semi using 3,500 kWh of electricity a year on a standard variable tariff currently pays about £840 annually. Switching to a time-of-use tariff and shifting 30% of demand, running the washing machine at 10pm instead of 6pm, for instance, could cut that to roughly £620. The exact figure depends on the tariff and the household’s flexibility.

Yet the real prize is systemic. If enough households shift demand to times of high renewable output, the grid needs fewer gas peaker plants. National Grid ESO estimates that 10 GW of flexible demand, about 3 million homes, could reduce the system’s carbon intensity by 20% by 2030. That is the equivalent of taking 2 million cars off the road.

The ‘but’, and what it means for your EPC

But the policy landscape is still playing catch-up. The government’s Clean Power 2030 plan includes a target for 30% of households to be on smart tariffs by 2030. At the current rate of smart meter installation, about 600,000 a year, that target will be missed by four years, the National Audit Office warned in December. And the EPC system does not yet reward homes for having smart meters or flexible demand capacity, meaning landlords and homeowners get no energy-rating boost for installing them.

The Energy Saving Trust recommends that any household considering a heat pump or EV charger should also request a smart meter and ask their supplier about time-of-use tariffs. The switch is free and takes about 30 minutes. For existing homes, the first step is to check whether your current supplier offers a smart tariff, and if not, switch. The savings are real, but they require action.