Small energy supplier Green Energy has harnessed smart meter technology to launch the first 'time-of-day' tariff for domestic customers. But while the tariff offers good value if you're able to be flexible with your electricity use, others could find savings hard to come by.
The new dual-fuel tariff, known as Tide, provides electricity at three different rates depending on the time of day with the lowest rate offered overnight and higher prices in place during daytime. Gas prices on the tariff do not fluctuate and work out relatively expensive when compared with the cheapest deals available elsewhere.
To get the tariff, you'll need to be a dual-fuel customer and Green Energy will need to install a smart meter in your home.
According to the firm, the tariff will cost a typical user £995/year, based on consuming 13% of your total weekly energy use at the lowest rate during the week, and 24% at the lowest rate at weekends, every week. In comparison, the cheapest deal on the market is currently £879/yr based on typical use.
However, if you manage to completely reduce usage during the high-rate period, it'll cost around the same as the cheapest on the market.
MoneySavingExpert.com founder Martin Lewis says: "This is an interesting new tariff that should be welcomed. It is not the first tariff to have different prices at different times but it is the first to take advantage of smart meter technology. However, it's important to mention that it's not cheap for gas and you have to be on a dual-fuel tariff to get it.
"But those who are mid to high users, who use a lot more electricity than gas, are capable of skewing their energy use overnight, and are out from 4pm to 7pm, can see decent savings here."
Regardless of what tariff you're on, it's always best to do a comparison via our Cheap Energy Club to get the best possible deal.
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How does the tariff work?
Green Energy's Tide tariff is similar to the Economy 7 tariffs that are available from various suppliers. These work by charging two different rates a cheaper night rate and more expensive day rate for your electricity.
However, Tide is a bit more complicated. During weekdays, you're charged at three different rates: a low rate between 11pm and 6am, a medium rate from 6am to 4pm and 7pm to 11pm, and a much higher peak rate between 4pm and 7pm.
During weekends you'll still be charged the lower rate between 11pm and 6am, but the higher rate will disappear to be replaced by the medium rate from 6am to 11pm.
Unlike other tariffs on the market, prices don't vary by region Tide rates are the same across the country:
|Time of day||Unit cost||Standing Charge|
|4pm-7pm (Mon-Fri only)||24.99p||24p|
|6am-11pm (weekends only)||11.99p||24p|
Is it a good deal?
It depends on your electricity usage throughout the day. If you manage to change your usage so you use the majority of your electricity during the night when the rate is at its lowest, it could be a good deal.
Here's how the electricity rates stack up compared with other deals on the market:
|Tariff||Unit rates||Standing charge|
|Green Energy Tide||Low: 4.99p
|Cheapest standard tariff (1)||12.48p||17.65p|
|Cheapest Economy 7 tariff (1)||Day: 13.48p
|(1) Average across all regions|
One important point to note, however, is that the cost of gas on the Tide tariff is quite expensive nearly as much as the average big six standard tariffs. Based on typical use, gas costs £540/yr on Tide, compared with £395/yr with the same usage on the market's cheapest tariff.
How is Green Energy able to offer this tariff?
Green Energy is using smart meters, which can track energy usage in near real time and send meter readings as often as every half hour.
According to the company, wholesale electricity prices what suppliers pay for energy varies with the time of day, so the Tide tariff encourages customers to vary their usage in line with this, charging less when energy is cheaper and more when prices spike.
With the widespread introduction of smart meters between now and 2020, it's likely that more energy companies will start to introduce similar 'time-of-use' tariffs.