Economy 7 and heat pumps: why it usually isn't the right tariff in 2026
Economy 7 was designed for storage heaters and immersion tanks in the 1970s. Heat pumps are a different beast — they run throughout the day, not just overnight. That mismatch, combined with Economy 7's high daytime rate, means most heat pump households end up paying more on E7 than they would on a modern time-of-use tariff. Here's why — and the narrow cases where Economy 7 still makes sense.
What Economy 7 is and how it works
Economy 7 is a two-rate electricity tariff: a cheap "night rate" for seven hours (typically 00:30–07:30, though exact times vary by region and meter) and a higher "day rate" for the remaining 17 hours.
The night rate is usually 30–50% below the day rate. The day rate, however, is typically 3–8p/kWh above the standard single-rate cap equivalent. That day rate premium is the structural problem for heat pump owners.
Under the April–June 2026 Ofgem cap, typical Economy 7 rates look roughly like this:
| Rate | Time | Approx rate |
|---|---|---|
| Night (cheap) | ~00:30–07:30 | ~12–15p/kWh |
| Day (expensive) | ~07:30–00:30 | ~28–32p/kWh |
Compare that to the standard single-rate cap of 24.7p/kWh. If you're on Economy 7 and paying 28–32p during the day, you need to shift a large proportion of your usage into the seven-hour night window just to break even with the standard tariff — let alone save money.
Why Economy 7 was designed for something else
Economy 7 dates from the 1970s, designed to shift demand to overnight hours when nuclear power stations were generating electricity that couldn't easily be stored. It worked well for storage heaters and immersion tanks — appliances that could charge up overnight and release heat slowly through the day.
Those loads share one feature: they are time-flexible and concentrated. You could run them entirely within the seven-hour night window and barely touch the day rate.
A heat pump is different. It runs throughout the day, adjusting to outdoor temperature and indoor heat demand. In winter, it runs for many hours during the morning, afternoon, and evening — almost all of which fall in Economy 7's expensive day-rate window. Even with good scheduling, a heat pump can't concentrate the majority of its consumption into a seven-hour overnight window, because your home loses heat all day and needs topping up.
The maths of who benefits from Economy 7
To save money on Economy 7 versus a standard flat-rate tariff, you need to shift roughly 40–50% of your total household electricity consumption into the seven-hour night window. That's a very high bar.
Consider a typical heat pump household using 8,000 kWh/year total (heat pump, hot water, and household appliances):
- Hot water cylinder reheat: ~1,200 kWh/year — can be scheduled overnight ✓
- Washing machine, dishwasher: ~500 kWh/year — can be scheduled overnight ✓
- Space heating (heat pump): ~5,500 kWh/year — mostly daytime/evening ✗
- Other household use: ~800 kWh/year — mixed ✗
Realistically, perhaps 2,000–2,500 kWh (25–31%) lands in the cheap window. At that shift rate, the day-rate premium on the remaining 5,500–6,000 kWh more than cancels the night savings. The household ends up paying more than on a flat-rate standard tariff.
How modern heat pump tariffs compare
The dedicated heat pump tariffs available in 2026 are fundamentally different from Economy 7, because they're designed around how heat pumps actually work:
| Tariff | Cheap hours/day | Cheap rate (Apr 2026) | Day/peak rate |
|---|---|---|---|
| Economy 7 | 7 (overnight only) | ~12–15p/kWh | 28–32p/kWh |
| Cosy Octopus | 8 (spread across day) | ~14.5p/kWh | 24.7p standard / 51.7p peak |
| British Gas Heat Power | 10 (overnight + midday) | ~12p/kWh | ~24.7p standard |
| E.ON Next Pumped | 21 (8hr super off-peak + 13hr off-peak) | ~9–11p / ~16–21p | ~27p peak (4–7pm only) |
| EDF FreePhase | 7 (green overnight window) | ~10–12p/kWh | Amber rate (standard level) |
Modern heat pump tariffs either spread cheap hours across the day (matching when a heat pump actually runs) or keep the standard/day rate at the flat-rate cap level rather than inflating it. Economy 7 does neither.
When Economy 7 might still make sense for a heat pump household
There are narrow cases where Economy 7 remains reasonable:
You have a large thermal store or buffer cylinder. A 500-litre thermal store, or an oversized cylinder, can absorb several hours of overnight heat pump output and release it slowly through the day. In this configuration, the heat pump genuinely can concentrate most of its run-time overnight. This is uncommon in standard domestic installations.
You can't access a dedicated heat pump tariff. Some meter types (older dual-rate meters not yet upgraded to SMETS2 smart meters, or properties in certain situations) may not qualify for heat pump tariffs that require half-hourly smart metering. If Economy 7 is your only time-of-use option, it's better than the flat-rate cap — as long as you can shift enough usage.
Your heat pump primarily heats a well-insulated property overnight. If your home retains heat exceptionally well and you run the heat pump on a long overnight preheat to very high temperature — coast through the day — Economy 7 might work. But this requires an unusually well-insulated home and a heat pump controller that supports the strategy.
You also have significant other overnight load — an EV charging overnight, a large tumble dryer, or other high-draw appliances running at night. Adding EV charging can push overnight usage well past the 40% threshold.
What to do if you're currently on Economy 7 with a heat pump
First, check whether you're eligible for a dedicated heat pump tariff:
- Do you have a SMETS2 smart meter (or a SMETS1 enrolled with DCC)?
- Is your electricity supply registered to a heat pump address?
If yes to both, you can almost certainly access Cosy Octopus, EDF FreePhase, E.ON Next Pumped, or British Gas Heat Power. Any of these is likely to deliver better annual results than Economy 7, because the daytime rate is either at cap level (not inflated) or replaced by a midday cheap window.
Run a comparison on Heat Pump Tariffs using your real usage data — if you have Economy 7, upload your CSV or connect via Bright and it will show you exactly how much each alternative tariff would cost against your actual consumption pattern.
The short version
- Economy 7 inflates the day rate to pay for the cheap night rate. Heat pumps run mainly during the day, so they absorb the penalty.
- You need ~40–50% of consumption in the overnight window to break even. Most heat pump households can't get there.
- Modern heat pump tariffs spread cheap hours across the day, matching how heat pumps actually operate.
- Economy 7 can still work if you have a very large thermal store, a SMETS1 meter with no smart tariff access, or significant EV or overnight load alongside the heat pump.
- If you have a SMETS2 meter and a heat pump, it's almost certainly worth comparing Economy 7 against the current heat pump tariffs.
Already on Economy 7 with a heat pump? Upload your usage data and run a comparison to see what you'd save on a dedicated heat pump tariff.