Smart Tariffs Explained

What is a smart tariff?

A smart tariff (also called a time-of-use tariff or dynamic tariff) is an electricity pricing structure where the rate you pay varies depending on the time of day — or, in some cases, changes every 30 minutes based on wholesale electricity market conditions.

Standard electricity tariffs charge a single unit rate regardless of when you use electricity — typically 28–35p/kWh in 2025. Smart tariffs split this into at least two rates: a cheap period (usually overnight, when electricity demand is low) and a standard or peak period during the day.

For households with a home battery, smart tariffs are transformative. Instead of being subject to a single high unit rate, you charge your battery during cheap periods and discharge it during expensive ones. The financial difference between the cheapest and most expensive rates on some tariffs exceeds 30p/kWh.

Octopus Agile — the most powerful tariff for battery owners

Octopus Agile is a half-hourly tariff: the unit rate changes every 30 minutes based on the wholesale electricity market. Prices are published for the following day by 4pm, which allows battery management systems to plan charging and discharging schedules in advance.

Overnight prices on Agile typically fall between 5–15p/kWh. During periods of very low demand (particularly in the small hours) prices occasionally go negative — meaning the grid is actually paying you to consume electricity. Peak prices (4–7pm on weekdays) regularly reach 30–45p/kWh.

The opportunity for a battery owner is significant. A 10 kWh battery charged at 8p and discharged at 35p saves approximately £2.70 per day from arbitrage alone — around £985 per year. In practice, charging and discharging are not perfectly efficient, so a realistic figure after efficiency losses is £700–£900 per year.

Agile requires a smart meter with half-hourly data submission enabled. Most meters installed since 2018 support this. Octopus can usually enable it remotely if yours does not already have it active.