What is a dual fuel energy tariff?

The vast majority of homes in the UK use some form of gas, either for cooking or, more commonly, for central heating. This means most people in the UK will be familiar with the concept of having two different types of energy bill – gas and electric. Historically, these were billed, and provided, by separate suppliers, but it’s become increasingly common for energy suppliers to provide both.

This, broadly, is what is meant by a dual fuel – sometimes also known as two-rate or dual-rate – energy tariff is. It’s simply one provider supplying and billing for households that use both gas and electric. So if your home only uses electricity, you’ll only be billed for it, and you won’t be on a dual fuel tariff.

Naming conventions for these tariffs tend to vary, but you’ll generally see some popular ones cropping up if you do a quick search online such as Economy 7 (7 hours of cheaper energy overnight) and Economy 10 (10 hours of cheaper energy split between overnight and daytime, but with higher standing charges).

Generally speaking, your energy will cost different amounts at different times of the day when you’re on a dual fuel tariff, which is defined as peak and off-peak hours:

• Peak hours – these are usually during the day and early evening when energy demand is typically at its highest. In other words, peak times are when people use the most amount of energy, for example to run multiple appliances like cookers, TVs, washing machines, lights, and so on.
• Off-peak hours – these are the times when energy demand is lowest. The most common off-peak time is overnight, but some tariffs also offer mid-day off-peak times to coincide with when people and families are at work or school.

Essentially, energy prices change when demand for energy is lowest because it’s cheaper for the UK’s energy grid to generate energy when it’s not as in demand. For example, overnight is the best off-peak time because the majority of us are asleep. This means all the lights are off, and very few appliances are running, so there’s less demand for energy.

The reason energy suppliers are keen to encourage more people to switch to using energy overnight is to better balance the overall demand for energy seen throughout the day. When demand spikes, such as when everyone gets home from work or school, the grid sometimes has to turn on extra generators to accommodate the demand. These are typically fossil-fuel burning power plants which are bad for the environment.

By spreading demand throughout the day, the grid will see fewer spikes and so they can avoid burning more fossil fuels, making the energy we use much greener and better for the planet. Fortunately for EV drivers, this coincides with how most of us charge, meaning we can all charge our electric cars for less.

Charging an electric at home can be very energy-intensive, especially when you factor in how long it takes for an EV to charge. Fortunately, a typical electric car can be fully charged, or at least to the sweet spot of 80%, in around 8 hours on a standard 7kW home charger, which happens to perfectly align with common dual-rate tariffs which offer around 7 hours of cheaper overnight charging.

This means EV drivers could see huge cost savings potential by switching their charging to overnight/off-peak hours. Let’s take a look at a quick example of a standard EV with a battery of ~54kWh:

*Based on the current Ofgem energy price cap

**Average cost of current Economy 7 rates according to Go Compare

As you can see, charging an electric car is a lot cheaper when you plug it in during off-peak hours, which can quickly add up to a huge cost saving.

Plus, as mentioned already, dual fuel tariffs encourage greener habits by getting more people to spread their demand over a wider period, reducing the need to turn on pollution-generating power plants. If you’re an EV driver, chances are you made the switch not only to save money but to do your bit for the planet. By charging overnight, you’ll not only get cheaper charging, but it’ll also be greener too! But how do you unlock this cheaper and green energy?

In order to take advantage of dual rate tariffs, you’ll need to get a smart EV home charger, as well as a smart meter. These chargers include smart charging functionality which includes the ability to automatically schedule a charge for when energy is cheapest

So, rather than needing to manually plug in and start a charge at off-peak hours – which could involve staying up until the early hours of the morning – you can simply plug in before you go to bed and the charger will start charging once your cheaper energy rate kicks in. This also means you’ll never miss an opportunity to save money by charging when it’s cheapest.

But there are plenty of other benefits to getting a dedicated smart home EV charger installed. For example, they’re really just much more convenient to use. All the smart tech they include is designed to make life with an EV easier, such as the ability to easily monitor your energy usage or features that make your charging safer and more intelligent. The ultimate in convenience is waking up to a fully charged electric car, charged on cheaper and greener energy!

With more dual fuel tariffs becoming available, EV drivers are spoilt for choice, but that can make it tricky to choose the best deal for you. For example, dual-rate tariffs can either be fixed or variable, and one may be better for you than the other. Plus, there are some other types of tariff available:

• Variable tariff: your energy price may go up or down depending on wholesale energy prices and Ofgem’s price cap
• Fixed tariff: the price you pay for energy stays the same throughout the contract, regardless of what wholesale prices or Ofgem’s price cap are
• Tracker tariff: these are fundamentally very similar to variable tariffs in that they change depending on market factors like Ofgem’s cap or wholesale prices. The key difference is that they tend to change much more frequently than variable rates, in some cases as often as every half an hour, which could make budgeting tricky but save you more
• Deemed energy tariff: if you’ve recently moved home, or your contract has come to an end, you’ll be automatically put into a deemed tariff, which will likely have a higher rate than you could get by switching or entering into a new contract
• Electric car tariff: EV drivers can also switch to a tariff explicitly designed for electric cars, with favourable overnight rates or discounted rates during the day
• Green energy tariff: these are ideal for the environmentally-conscious as they prioritise supplying energy that’s come from renewable sources like hydro, solar, wind etc. They’re less common than other tariff types, and of course not all the energy will be 100% renewable, but it could be a great way to reduce your carbon footprint

Fortunately, there are plenty of price comparison websites online that will quickly and easily show you the best deals available for your area. This should include plenty of information, including frequently asked questions you might have. For example, you could save money by paying monthly via Direct Debit, and there might be exit fees with your current provider that you’ll need to take into consideration before switching.

Depending on your current rates, moving over to a two-rate tariff could significantly reduce the costs of charging your electric car. If you have a smart home charger, you’ll be in a great position to maximise the convenience and savings benefits of being an EV driver.

That said, it’s important to do your research before switching. The energy tariff industry can be complicated, with many new providers offering unique and sometimes niche tariffs which may or may not benefit you. But if and when you decide to make the switch, you’ll have access to plenty of smart EV chargers, including our very own all-inclusive Pod Drive EV smart charging service from just £40 per month.