Time-of-use vs. fixed tariffs: which is better for EV owners?
What are TOU and fixed tariffs?
A TOU tariff charges different rates for electricity depending on the time of day. Typically, rates are lower during off-peak hours, such as overnight, and higher during peak hours when demand is greater. EV owners can therefore save by charging their vehicles during off-peak hours when electricity is cheaper.
A fixed rate tariff charges the same price for electricity at all times, regardless of when it’s used. This structure can provide stability for EV owners, as it offers predictable pricing throughout the day.
Fixed vs TOU tariffs: pros and cons for EV owners
When deciding between TOU and fixed tariffs for your EV, it's important to consider the benefits and drawbacks of each option. Here's a breakdown of how they compare:
Time-of-use tariffs
Pros
Lower rates during off-peak hours, such as overnight, giving the potential for significant cost savings if you charge your EV during cheaper times.
Encourages charging when demand on the grid is lower, supporting grid stability.
Cons
Higher rates during peak hours, which could increase costs if you need to charge during these times.
Risk of missing out on off-peak savings if charging habits aren't managed well.
Fixed tariffs
Pros
Simple and predictable pricing, with the same rate at all times.
No need to track off-peak hours, making it easy to manage costs and offering flexibility on when you charge.
Cons
No opportunity to take advantage of cheaper off-peak rates.
You pay the same price regardless of when you charge, which may likely be higher than off-peak rates on a TOU tariff.
How your charging habits influence the best choice
Your charging habits play a key role in deciding which tariff works best. TOU tariffs offer the most savings when you charge during off-peak hours - so the more you charge during these times, the more you can save.
Some EV owners charge at home overnight which suits a TOU tariff well as it allows them to take advantage of lower rates. Charging at work during the day may also align with off-peak times, depending on your location and TOU structure, so that’s something to check with your supplier.
If you’re a driver with an irregular schedule, or rely on public chargers, a fixed tariff might be better. With unpredictable charging times and public chargers, it can be harder to plan around specific off-peak windows.
Smart meters and compatibility
To use a TOU tariff, you need a smart meter. These meters track your energy usage in real time and automatically send data to your supplier, ensuring you're charged at the correct rate depending on when you use electricity.
Before switching to a TOU tariff, check if your home is compatible with a smart meter. Some older meters may need replacing, so it’s important to confirm that your setup supports this type of meter and billing. If you’re unsure, check with your supplier.
How much could you save with TOU vs fixed?
The savings potential between TOU and fixed tariffs primarily depends on your charging habits. If you charge overnight, you could save more with a TOU tariff compared to charging during the day when rates are higher. The more you charge during off-peak hours, the greater your savings.
For typical usage, fully charging a Nissan Leaf overnight - with a battery capacity of 40 kWh - on a TOU tariff could cost as little as £2.80, while daytime charging could exceed £10. On a fixed tariff, the cost would remain the same regardless of when you charge the vehicle.
Should you switch?
Wondering if it’s worth making a switch? TOU tariffs may suit you if:
- You charge regularly overnight
- You have flexibility around when you charge
- Your charging habits align with off-peak hours.
If you have an irregular schedule, rely on public chargers or need the simplicity of a set rate - a fixed tariff might be a better fit.
Before switching, monitor your energy usage with apps or tools from your supplier. This helps you understand your charging habits to determine whether a TOU tariff may offer savings.
Which suppliers offer both fixed and TOU tariffs?
Several UK suppliers offer both fixed and TOU tariffs, including:
- EDF Energy
- E.ON Next
- Octopus Energy
- ScottishPower.
To find the best option, use our EV energy tariff comparison tool. Remember to compare tariffs based on your driving needs and charging habits to see which might suit you best.
How to switch between TOU tariff and fixed tariffs
Switching between TOU tariffs and fixed tariffs should be relatively simple.
- Contact your supplier to request the tariff change.
- Check if your meter is compatible with the new tariff - most suppliers require a smart meter for TOU tariffs.
- Be aware of possible wait times for the switch to take effect, which can range from a few days to a couple of weeks.
Some suppliers - such as Octopus and E.ON Next - simplify the switch from one tariff to another. They offer clear guidance, handle most of the process for you and ensure the transition happens quickly. These suppliers may also help with smart meter installation - making the entire process straightforward and hassle-free.
FAQs
Can I benefit from a TOU tariff without owning an EV?
Yes, you can benefit from a TOU tariff without owning an EV. These tariffs work for heat pumps, battery storage and large appliances too. Any household with flexibility to use energy during off-peak hours can save by paying lower rates, cutting overall energy costs.
How do smart meters enable TOU tariffs?
Smart meters can track energy usage every half hour. This allows suppliers to bill you based on when you use electricity, supporting accurate billing. They also help track savings, so you can see the impact of charging or using appliances during off-peak hours vs peak times.
Do TOU tariffs always save money vs fixed?
TOU tariffs save money only if you shift usage to off-peak times, meaning high peak-time use can offset any savings. It’s important to review your household habits and charging patterns to determine if a TOU tariff works for your energy needs.
Can I switch from a fixed to a time-of-use tariff if I rent?
You can usually switch to a TOU tariff if you rent, especially if you pay your energy bills to your supplier directly, but it’s still a good idea to get your landlord’s permission. If in doubt, check your tenancy agreement and ask your supplier about smart meter installation. Some suppliers may require meter upgrades, so confirm compatibility before making the switch.
