Heat Pump and Economy 7: Is It Compatible?

Economy 7 looks appealing on paper — seven hours of cheap overnight electricity — but its punishing daytime rate, usually well above a standard single-rate tariff, makes it a poor choice for most heat pump owners. Unless your home is exceptionally well-insulated and your heat pump barely runs during the day, you will almost certainly pay more on Economy 7 than on a modern time-of-use tariff.

This guide explains why Economy 7 and heat pumps are a poor match, what to switch to instead, and the simple steps to make the change.

How Economy 7 Works

Economy 7 is a legacy two-rate electricity tariff that provides 7 hours of cheaper electricity overnight (typically midnight to 7am). It was designed in the 1970s for homes with electric storage heaters that charge up overnight and release heat during the day.

The Problem for Heat Pump Owners

Economy 7's high daytime rate is the core issue. Any electricity your heat pump uses outside the overnight window costs more than a standard flat-rate tariff. Unless you can confine the vast majority of heat pump operation to the overnight window, you lose money.

Economy 7 vs Modern Time-of-Use Tariffs

Modern time-of-use tariffs are better for heat pump owners in every way:

• More off-peak hours: Octopus Cosy gives 8 hours across 3 windows vs Economy 7's 7 overnight hours
• Cheap rate tied to your day rate: Cosy's cheap windows are 51% below its regional day rate
• No inflated daytime rate: outside its short 4-7pm peak, Cosy charges its regional day rate, whereas Economy 7's daytime rate is usually well above a standard single rate
• Smart meter integration: Half-hourly data helps you optimise your schedule

When Economy 7 Might Work

Economy 7 could work for a heat pump only if all of these are true:

• Your home has exceptional insulation and retains overnight heat all day
• You have a very large hot water cylinder (300L+) that stores a full day's hot water from overnight heating
• Your heat pump almost never runs during daytime hours
• You cannot get a smart meter installed (rare but possible in some properties)

For almost everyone else, switching to a modern tariff is the right move.

How to Switch Away from Economy 7

1. Request a smart meter from your current supplier (free of charge)
2. Compare heat pump tariffs using our best tariff guide
3. Switch to your chosen supplier — they handle everything
4. Your supply is not interrupted during the switch

For most heat pump owners, Octopus Cosy is the best replacement. See our full comparison for alternatives.

Frequently Asked Questions

Can I run a heat pump on Economy 7?

Technically yes, but it is rarely the best option. Economy 7's daytime rate is usually well above a standard single rate, so any heat pump usage outside the 7 overnight hours is expensive. Modern time-of-use tariffs offer better value.

Is Economy 7 cheaper than Octopus Cosy for heat pumps?

Almost never. Economy 7 usually has a higher daytime rate than Cosy's day rate, and fewer cheap hours (7 vs 8 across three windows). Unless you shift over 60% of all electricity to overnight, Cosy saves more.

Should I switch from Economy 7 to a smart tariff?

Yes, in most cases. Modern tariffs offer more off-peak hours, lower daytime rates, and better flexibility. You will need a smart meter, which your supplier installs free.

Do I need to replace my Economy 7 meter for a heat pump tariff?

Yes. Economy 7 uses an old two-register meter. Modern tariffs require a SMETS2 smart meter, installed free by your supplier.

What if I already have storage heaters on Economy 7?

If you are replacing storage heaters with a heat pump, switch from Economy 7 to a modern time-of-use tariff at the same time. The heat pump and smart tariff combination will be significantly cheaper and more comfortable.