Report backs dynamic pricing
A study by the Institute for Fiscal Studies and the London School of Economics, published as part of the IFS Green Budget, says household electricity bills could fall if time-varying tariffs became the norm. The research shows wholesale costs already swing sharply by time and region, yet most households still pay flat rates that ignore those swings.
What the tariffs actually do
Time-varying deals charge different rates at different times, so electricity is cheaper when wind or solar output is high and dearer when gas plants are needed. The report suggests making these tariffs the default and offering targeted subsidies for heat pumps and solar panels to encourage people to move demand away from peak hours.
Bobbie Upton, Research Economist at the IFS, said: "Encouraging greater take-up of time-varying electricity prices could lower electricity bills for consumers with minimal cost to the Government. The extent of savings would depend on how enthusiastically consumers adopted time-varying contracts and then adjusted when they consumed electricity."
Mark Franks of the Nuffield Foundation added that the change matters most for lower-income homes, where energy takes a bigger share of spending.
What you need to do
You will need a smart meter or a compatible multi-register meter to join these tariffs. The Radio Teleswitch Service that supports older multi-rate meters is being phased out from 30 June 2025, so households on legacy systems will need to upgrade anyway.
We have plenty of energy comparison tools that let you check which suppliers already offer dual-rate variable tariffs and what the peak and off-peak windows look like in your area. Shifting washing, EV charging and dishwashing to the cheaper slots is the main way to cut costs, and the report notes this works best when people actively track their usage through an app.
