What is a day rate and night rate on a business electricity tariff?

A day/night (two-rate) tariff charges a lower unit rate for electricity used during a fixed night window, and a higher rate for the rest of the day. It suits sites that use a good share of their power overnight.

How it works

The meter has two registers, often labelled low and normal, or day and night. Each is billed at its own unit rate. Smart Energy GB describes the household version, Economy 7, as seven cheaper hours, typically around midnight to 7am, though the exact times depend on the supplier. Business tariffs vary by supplier and meter, and we have not found a standard set of business night hours, so check the exact window in your contract.

The daytime rate on such a tariff is often higher than on a single-rate tariff, so a two-rate deal is not always cheaper overall.

Who might benefit

• Bakeries starting before dawn, or businesses running ovens, kilns or freezers overnight.
• Premises with storage heaters or water heating timed overnight.
• Sites with battery storage or charging that can be set to the night window. See business battery storage.

It is rarely worth it for a shop, salon or office that is open only in the day.

A worked example (illustrative rates)

A workshop uses 10,000 kWh a year. 4,000 kWh is used at night and 6,000 kWh by day.

Tariff	Calculation	Energy cost
Single rate at 27p	10,000 × 0.27	£2,700
Two-rate, day 30p, night 15p	(6,000 × 0.30) + (4,000 × 0.15) = 1,800 + 600	£2,400

Here the two-rate tariff saves £300 a year. Now suppose only 1,500 kWh is used at night: (8,500 × 0.30) + (1,500 × 0.15) = 2,550 + 225 = £2,775, which is dearer than the single rate by £75. The break-even depends on your own quoted rates and the share used at night, so run your own numbers.

Where it shows on your bill

You will see two usage lines, each with kWh and a rate. Our guide to reading your business energy bill explains the rest. The type of meter also decides your profile class, which can affect what is available.

Half-hourly sites

Larger sites on half-hourly meters are billed on usage in each half hour. They often have time-band charges for network costs rather than a simple day/night split.

Do not change tariff type without checking your actual night usage. A smart meter or your supplier's online usage data can show it.

Questions to ask before you sign

• What exact hours count as night, and do they change when the clocks change?
• Does the standing charge differ from the single-rate version?
• Is the daytime rate fixed for the full term?
• Will a smart meter or a new meter be needed?

Next steps

Ask for a two-rate and a single-rate quote side by side, and read our guide to business electricity prices per kWh for context.