Smart timing: Making time-of-use tariffs work for consumers
Smart timing: Making time-of-use tariffs work for consumers 345 KB
Supplementary evidence pack 2.97 MB
As our energy system moves away from fossil fuels towards a cleaner, more electrified future, the energy retail market is set to offer new choices for households. Smart time-of-use tariffs - where the price of electricity varies depending on when it’s used - are likely to become more common.
Today, only 2.3% of households have a modern time-of-use tariff. This report, based on research commissioned by Citizens Advice, explores the experiences of these early adopters and implications for the wider consumer market.
We found that these tariffs require increased engagement from consumers at key points in the consumer journey, from choosing a tariff to monitoring their usage. Time-of-use tariff users highlighted challenges in choosing their tariff, because it can be more difficult to make meaningful comparisons between tariffs with time-of-use pricing structures, and there are more factors that have to be considered compared to standard tariffs. Monitoring a time-of-use tariff once it is set up can also require a greater level of engagement than consumers may be used to.
The absence of tools to help consumers make choices makes this even harder. For some consumers, these challenges will act as a barrier to entry. That’s why we need early action from Ofgem and the government:
Ofgem should introduce a Consumer Duty in the supply licence and incoming load control licence to ensure services meet consumer needs.
The government should put in place a smart data scheme, allowing consumers to consent to data sharing between suppliers and third party intermediaries, like price comparison websites.
We're calling for the expansion of the statutory advice service to ensure consumers have the right tools and support to make informed choices.
We have also published a supplementary evidence pack 2.97 MB , exploring some of the findings from our qualitative research in more detail.