As energy prices continue to fluctuate across the UK, many businesses are looking for smarter ways to manage their utility costs. One increasingly popular option is the Time-of-Use (ToU) tariff — a pricing structure that rewards businesses for shifting their energy use to off-peak hours.
But is a ToU tariff right for your business? In this guide, Scalex Technology breaks down everything you need to know, from how they work to who benefits and how to get started.
What Are Time-of-Use Tariffs?
Time-of-use tariffs are electricity pricing plans where the cost of energy varies depending on when it’s used. Instead of paying a flat rate per kilowatt-hour (kWh), your business pays different rates for:
- Peak times – when demand is highest (and prices go up)
- Off-peak times – when demand is lower (and prices drop)
- Shoulder periods – transitional hours with moderate pricing
This model encourages users to consume energy during off-peak times, which helps reduce pressure on the grid and supports a more sustainable energy system.
How Do Time-of-Use Tariffs Work?
A time-of-use tariff is made possible by smart meters or half-hourly meters, which track exactly when your business uses energy. Your supplier then applies different rates to usage based on the time of day.
Example ToU Schedule (Illustrative Only):
| Time Period | Rate Type | Typical Price |
|---|---|---|
| 4:00 PM – 7:00 PM | Peak | 35–50p per kWh |
| 11:00 PM – 6:00 AM | Off-Peak | 15–20p per kWh |
| 7:00 AM – 4:00 PM / 7:00 PM – 11:00 PM | Shoulder | 22–30p per kWh |
⚠️ Each supplier sets their own peak and off-peak hours, so it’s important to check contract terms carefully.
Benefits of Time-of-Use Tariffs
✅ Lower Costs
If your business can shift consumption to off-peak hours, you can significantly reduce your energy bills.
✅ More Control
ToU tariffs reward strategic energy use, helping you better plan and manage consumption.
✅ Supports Net Zero Goals
Using electricity during off-peak times helps balance demand, reducing reliance on fossil-fuel generation.
✅ Increased Transparency
Smart metering data gives you a clearer picture of your usage patterns and opportunities for savings.
Who Are Time-of-Use Tariffs Best For?
ToU tariffs can work well for a range of businesses, including:
- 🏭 Manufacturers with flexible production times
- 🍞 Bakeries or night-shift operations
- 🧺 Laundrettes with programmable equipment
- 🏢 Offices with electric vehicle charging stations
- 🌱 Sustainability-focused businesses looking to reduce grid strain
However, if your business must operate primarily during peak hours (e.g. retail), a flat-rate tariff may be more predictable and manageable.
Are There Any Downsides?
❌ Unpredictable Costs
If you can’t shift usage out of peak hours, ToU tariffs may end up costing more.
❌ Requires Smart Metering
You’ll need an appropriate meter (smart or HH) to access ToU pricing.
❌ Complexity
Managing energy schedules can be challenging without an energy management system.
How to Switch to a Time-of-Use Tariff
Scalex Technology can help you assess whether ToU pricing is right for your business and guide you through the switch.
Our Process:
- Usage Analysis – We evaluate your energy consumption patterns
- Tariff Comparison – We find the most suitable ToU contract from our trusted suppliers
- Meter Setup – We arrange smart meter installation if needed
- Ongoing Support – We help monitor your usage and optimise savings
Scalex Tip: Pair ToU Tariffs with Smart Tech
To get the most from a ToU tariff, consider installing:
- Timers on high-consumption equipment
- Battery storage to store cheap off-peak energy
- EV charge management systems
- Smart thermostats and lighting
These tools can help automate your energy use and maximise savings.
Final Thoughts
Time-of-use tariffs aren’t for everyone—but for flexible businesses willing to adapt, they can unlock meaningful savings and support a greener grid. With the right advice and tools, you can make this dynamic pricing model work for you.
🔍 Ready to Explore Time-of-Use Tariffs?
Let Scalex Technology review your energy usage and help you switch to a smarter, more cost-effective tariff.
📞 Contact our energy experts today for a free consultation and bespoke quote.
