Tech-affluent households are starting to make use of time-of-use tariffs
Percentage of households on a time-of-use tariff
Image Description
A horizontal bar chart, titled "Percentage of households on a time-of-use tariff," shows the percentage of households on a time-of-use tariff for each individual energy-use profile in comparison to the average household in the sample. There are 11 bars, 1 for each of the 10 profiles and a final one for the average household in the sample. One can observe that profiles 7, 9 and 10 have a higher-than-average proportion of households on a time-of-use tariff.
The footnote highlights the data source, Smart Energy Research Lab Observatory data and that "For the purpose of this analysis, we focused on the period between July 2023 and June 2024. Results are based on a sample of 5,994 households, designed to represent Great Britain across regions and Index of Multiple Deprivation (IMD) quintiles."
Most households (91%) are on flat-rate electricity tariffs, paying the same price for electricity regardless of when they use it. Only about 9% of homes currently use time-of-use (ToU) tariffs (according to the latest tariff reading between July 2023 and June 2024), which charge different rates based on the time of day. A very small number of households are on block tariffs.
However, data shows that certain groups of ‘tech-affluent’ households are noticeably more likely to be on ToU tariffs. Specifically, profiles 7, 9, and 10 have a much higher adoption of ToU tariffs, with at least 30-40% of households in these groups using them, compared to 9% on average for households in other profiles.
We’re calling these tech-affluent households because we see the presence of electric heating, heat pumps and electric vehicles. A substantial portion of households in profile 7 (44%) and profile 10 (57%) use electric central heating. This is substantially higher than the 1% average in other profiles. Within these, a notable number have heat pumps: at least 6% in profile 7 and 32% in profile 10, compared to less than 1% in other profiles. Many households in profile 9 (at least 60%) and profile 10 (at least 22%) own an EV.
Households with electric heating and EVs can benefit greatly from ToU tariffs by charging their vehicles or running their heating during periods when electricity is cheaper. In fact, research from Cornwall Insights, commissioned by Nesta, shows that heat pump owners could save up to £600 per year just by switching to a time-of-use tariff.
