W5UP5 How can we encourage consumers to switch to time of use tariffs? Evidence from a randomised control trial on a nationally representative sample of British energy bill payers
12th April 2016 Moira Nicolson

How can we encourage consumers to switch to time of use tariffs? Evidence from a randomised control trial on a nationally representative sample of British energy bill payers

Moira Nicolson, UCL Energy Institute


To ensure we can access the energy we need, at a price we can afford, whilst meeting carbon emission targets and realising the business case of smart meters, the UK Government requires domestic consumers to sign up to a new generation of time of use electricity tariffs. For example, the UK’s business case for smart meters requires 20% of the British population to switch to a static time-of-use tariff by 2030, in addition to those who are on legacy Economy 7 style tariffs. However, with the smart meter roll-out in its infancy in most parts of the world, it is not known what proportion of the population will switch to a time-of-use tariff once given the chance – or how to boost uptake, if switching rates are lower than required. What we do know is that, for the past two decades, the majority of consumers have never switched their energy supplier or tariff, despite the fact they could have saved an average of £200 a year and it is expected that the savings from participating in DSR will be 10 times smaller (Citizens Advice, 2014).

To address this research gap, a survey experiment was run on a nationally representative sample of 2,000 British energy bill payers. Participants were shown the same static time of use tariff designed by British Gas and Northern Powergrid to be commercially viable in 2020 but were given either one of two different reasons for switching (to save money OR to save money and the environment/energy security) which were either loss-framed or gain-framed. Participants were therefore randomly assigned to one of four different marketing messages in a 2×2 factorial randomised control trial design: (1) switch to save money; (2) switch to avoid missing out on saving money; (3) switch to save money, prevent blackouts and save the planet and; (4) switch to avoid missing out on money and increasing the risk of blackouts whilst harming the planet. The survey also collected other information about participants that theory and evidence suggested would affect people’s willingness to sign up to a time of use tariff, including socio-demographic variables, occupancy patterns, historical switching behaviour and whether they owned high consuming electrical appliances that could be used at off-peak rather than peak times.


  • One in three British energy bill payers are in favour of signing up to a next generation time of use tariff
  • People were no more willing to switch when told about the environmental and energy security reasons for demand-side response as opposed to just the financial benefits of being able to use electricity at a cheaper off-peak rate
  • Some British consumers were much more willing to switch to a time of use tariff than others, namely, existing Economy 7 customers, electric vehicle owners and people who own wet kitchen goods with timers, such as dishwashers and tumble dryers, that can be run overnight during the off-peak times
  • There is no evidence that vulnerable people will be excluded from the wider benefits of smart meters (of which time of use tariffs are one benefit) purely on the basis of their willingness to sign up to a time of use tariff because willingness to switch was the same regardless of social grade, employment status, age and across people with and without pre-payment meters (thought to be common amongst low income groups)
  • People who reported being out of the house during off-peak times but at home during the expensive peak times were no more or less likely to say they would switch than anyone else (contradicting popular opinion that these tariffs will be unpopular amongst people with lifestyles that aren’t suited to ‘off-peak’ energy usage)