Most businesses still pay a flat unit rate for electricity — the same price per kWh at 3am as at 6pm on a winter weekday. That simplicity has a cost. The grid charges consumers at peak times because generation is expensive when demand is high, and businesses that absorb this cost without shifting any consumption are effectively subsidising others who can and do avoid it. Time-of-use tariffs are the mechanism through which that cost structure is made visible — and battery storage is what makes it exploitable.
What Are Time-of-Use Tariffs?
Time-of-use (ToU) tariffs price electricity differently depending on when it is consumed. The principle reflects the actual cost of electricity generation on the wholesale market — demand peaks in the morning and evening, generation is more expensive during those periods, and that cost needs to be passed to consumers in some way. Flat tariffs socialise this across all hours; ToU tariffs expose it.
For consumers with no flexibility in when they draw energy, ToU tariffs are primarily a risk — they may end up paying more during peaks. For consumers who can shift when they draw energy — either manually, through smart systems, or via battery storage — they are an opportunity. The battery charges at off-peak rates and discharges at peak rates, capturing the spread as a financial saving.
~5–7p
Octopus Agile overnight low rate (approximate)
30–60p+
Octopus Agile peak rate during high demand periods
~6×
typical ratio between peak and off-peak rates in volatile markets
The Main Time-of-Use Tariff Types
The UK market has several well-established ToU tariff structures, each suited to different consumer profiles and system configurations. Understanding how each works helps businesses decide which is most appropriate and what storage capacity they need to benefit.
The original UK time-of-use tariff. Offers a lower overnight rate (typically 7 hours between midnight and 7am) and a higher daytime rate. Designed for storage heaters and hot water cylinders. Still available for many commercial users and relevant where large thermal or battery storage can be charged overnight.
Best for: Simple overnight charging, large thermal storage, basic battery arbitrage
A fully dynamic tariff that updates every 30 minutes based on wholesale electricity market prices. Rates can be near zero or even negative during high renewable generation periods, and spike during peak demand events. Requires smart metering and is available to most residential and smaller commercial users. Maximum benefit requires automated control (smart inverter or energy management system).
Best for: Battery storage with smart charging, EV fleet charging, demand flexibility
A two-rate tariff designed primarily for EV charging. Provides a very low overnight rate (around 7–9p/kWh) for a defined charging window, integrated with compatible EV chargers and home or business battery systems. Less volatile than Agile but offers predictable low-cost charging windows.
Best for: EV fleets, overnight battery charging, predictable low-cost energy window
For commercial users with half-hourly metering (typically sites consuming over 100 MWh/year, or those with AMR/smart meters), half-hourly tariffs pass through actual half-hourly settlement prices. The price varies every 30 minutes and can differ significantly across the day. Businesses with battery storage can programme charging to match the cheapest periods and discharging to the most expensive.
Best for: Medium to large commercial sites, high consumption, battery dispatch optimisation
How Battery Storage Exploits Time-of-Use Tariffs
Without battery storage, a business on a ToU tariff can only benefit by manually shifting consumption — running machinery overnight, scheduling EV charging for off-peak periods, or adjusting heating and cooling timing. These measures help, but they depend on operational changes that may not always be practical.
Battery storage automates and scales this process. The battery charges during the cheapest periods (overnight off-peak, negative-price windows, excess solar generation) and discharges during the most expensive periods (morning and evening peaks, high-demand events). The control system handles the scheduling automatically, often using real-time or day-ahead price signals to optimise every charging cycle.
For a business on a dynamic tariff like Agile, the battery might charge three or four times per day during price dips and discharge during peak windows, capturing the spread on every cycle. The economics depend on the size of the spread, the battery's cycle life, and the cost of the battery system — but in volatile markets, the return from tariff arbitrage can be significant and compound with the returns from solar self-consumption.
Daily Battery Cycle — Agile Tariff Example
Illustrative only. Agile rates fluctuate daily based on wholesale market conditions.
Is a Time-of-Use Tariff Right for Your Business?
ToU tariffs are not automatically beneficial for every business. They require either operational flexibility to shift consumption or battery storage to capture the price differential. Businesses with very inflexible load profiles — where consumption must occur during peak times regardless of price — may see their bills increase on a dynamic tariff compared to a flat rate.
The businesses that benefit most are those with: high total consumption (where even small p/kWh differences generate significant savings), battery storage to automate charge-discharge arbitrage, EV fleets that can charge overnight, processes with flexible scheduling (cooling, heating, non-time-sensitive machinery), or solar generation that can be combined with battery dispatch optimisation.
As part of a commercial survey, Omni3 will assess your half-hourly consumption profile to identify whether a ToU tariff would benefit your site, and what battery storage capacity would maximise the financial return from tariff arbitrage combined with solar self-consumption.
Frequently Asked Questions
What is the difference between Octopus Agile and Intelligent Go?
Agile is a fully dynamic tariff that updates every 30 minutes based on wholesale market prices — it can be very cheap or very expensive depending on grid conditions. Intelligent Go is a two-rate tariff primarily designed for overnight EV charging, offering a fixed low rate during a defined overnight window. Agile offers more arbitrage potential but requires more sophisticated control. Intelligent Go is simpler and more predictable.
Do I need a smart meter for a time-of-use tariff?
Yes. Time-of-use tariffs require half-hourly metering to track when energy is consumed. Most newer commercial sites have smart or AMR meters installed. If not, your supplier can typically arrange installation as part of switching to a time-of-use product.
Can battery storage pay for itself through tariff arbitrage alone?
In some circumstances, yes — particularly with highly dynamic tariffs like Octopus Agile, where the price spread between low and peak periods can exceed 30–40p/kWh. However, in most cases, the economics are strongest when battery storage serves multiple functions: solar self-consumption, peak avoidance, and tariff arbitrage combined. This stacking of value streams improves the overall return significantly.
What is peak shaving and how does it relate to time-of-use tariffs?
Peak shaving means reducing your maximum power demand at any point during the billing period. For half-hourly metered sites on profile class 05–08 tariffs, the highest demand period can affect standing charges (maximum demand charges). Battery storage that discharges during periods of highest demand can reduce this peak and lower fixed charges. This is distinct from, but complementary to, tariff arbitrage.
How do I know if a time-of-use tariff will save money?
The key is to analyse your actual half-hourly consumption data against historical tariff prices. If a high proportion of your consumption is during hours that would have the cheapest rate on a ToU tariff, and you have battery or operational flexibility to maintain this, you will likely benefit. Omni3 can model your site against half-hourly data as part of a commercial energy assessment.
Related pages
Important disclaimer. Tariff rates quoted in this article are illustrative and based on publicly available data as of June 2026. Octopus Agile, Intelligent Go, and other named tariffs are products subject to change by their respective suppliers. This article does not constitute energy procurement advice. Businesses should compare tariff options carefully and seek independent advice before switching tariffs. Last updated June 2026.