Which Tariff is Best to Use with the Wondrwall System?

Understanding Time-Of-Use tariffs and how they work with Wondrwall to reduce energy bills.

Introduction

As we transition from gas to electric heating in our homes, we are making a positive impact on the environment but may face higher costs.

Since electricity costs more than gas, when we install electric heating, our bills go up. From 1 April 2023, one kWh of electricity will cost 51p with a standing charge of 53p per day compared to 13p per kWh and 29p respectively for gas.

 With electricity four times the price of gas, no electric heating is efficient enough to compensate for the difference.

Electricity prices fluctuate during the day and depend on the demand and supply of energy. When the demand is low, the price tends to be low. Conversely, when demand is high, the price is high. Additionally, when solar or wind generation is abundant, the price is generally low. Conversely, when there is little renewable energy generation, the price tends to be high.

As we can see in the image below, the cost of wholesale electricity is lowest in the early morning when people are asleep and highest in the evening when everyone is home.

Time-of-use (TOU) tariffs match this pricing. TOU tariffs are available that provide low-cost electricity for importing at off-peak times and also pay more for exporting at peak times.

Wondrwall is designed to use TOU tariffs to reduce the running costs of our homes.

How the Wondrwall Home Energy Management System works.

Homes with the Wondrwall Home Energy Management System (HEMS) typically include a solar array with a battery. The primary goal of Wondrwall is to maximise the use of free solar energy by running the home while the sun shines, charging the battery and heating the hot water to run the home after the sun has set.

Wondrwall calculates the amount of energy needed from the grid when there is not enough solar generation. This is done by estimating the energy consumption for the next day based on your past usage and the solar generation forecasted by the weather. Wondrwall then imports the energy required when the cost is low to charge the battery, heat the water cylinder, and warm your home.

Wondrwall exports excess solar energy back to the grid during peak times to generate revenue and reduce costs.

In doing so, Wondrwall can significantly reduce the cost of running the home. In fact, by switching to a time-of-use tariff, it is possible to save more than double the amount of money.

Time Of Use Tariffs

Navigating the world of energy tariffs can be complex, given the multitude of options that offer varying rates for peak and off-peak energy consumption, both for import and export. Selecting the right tariff, therefore, can be a challenging task.

Time-of-use (TOU) tariffs, which offer different prices at different times of the day, are designed to incentivise energy use during off-peak times to balance demand. They represent the future of electricity pricing and supply. The key benefits of these tariffs are twofold: they help to distribute demand evenly throughout the day, aiding in the stabilisation of the national grid, and they provide an opportunity for consumers to reduce their energy bills by shifting their consumption away from peak times.

One of the most well-known tariffs is Economy 7, which offers seven hours of inexpensive electricity overnight. This tariff was specifically designed for use with storage heaters, which store heat at a lower cost overnight and release it during the day as needed to heat homes.

Recently, TOU tariffs have been expanded to include Electric Vehicle (EV) tariffs, such as Octopus GO, Intelligent Octopus, and offerings from other providers like British Gas and EDF. These tariffs provide low-cost energy overnight for charging electric cars.

It’s important to note that TOU tariffs can apply to both the energy you buy (import) and the energy you sell (export). However, they are only applicable for electricity, not gas, and require the installation of a smart meter.

In the UK, Octopus Energy is a leading supplier that is actively rolling out Time of Use tariffs. They now offer a variety of different TOU tariffs, which we will explore in further detail.

Octopus Agile

Wondrwall was initially conceived to operate in conjunction with the Agile tariff.

The Agile tariff is a wholesale tracker tariff, functioning by tracking daily wholesale energy prices. The prices for the subsequent day are typically provided after 4pm on the preceding day.

The cost of electricity can fluctuate every 30 minutes, as evidenced by the historical prices for a week in March 2023 (shown below). 

By understanding the pricing for each 30-minute interval, Wondrwall can strategically plan to capitalise on the cheaper slots and avoid the more expensive ones.

When there is a surplus of renewable energy on the grid, the price for certain 30-minute slots on the Agile tariff can even become negative, effectively paying you to use energy.

Moreover, the Agile tariff adjusts the price you receive for exporting energy. Thus, if you export during peak times, you receive a higher payment than if you export during off-peak times. The price you earn for exporting at peak times is typically higher than the price you pay during off-peak times, as can be seen below.

Wondrwall is engineered to minimise consumption and prioritise exporting during peak times to further reduce your energy bills.

As illustrated below, the Agile export tariff price is higher than the lowest import price, implying that we can earn more by importing at off-peak times rather than utilising solar and exporting at peak times. Wondrwall employs Artificial Intelligence (AI) to determine the optimal strategy for import and export.

The Agile tariff is ideally suited for Wondrwall (and vice versa), but unfortunately, due to the exceptionally high wholesale prices for electricity over the past year, it has not been feasible to recommend this tariff. However, with increased stability in the wholesale energy markets and declining wholesale prices, this is no longer the case.

Octopus Go and Intelligent Octopus

Octopus Energy’s Go tariff is a smart tariff specifically designed for EV owners, offering a 4-hour discounted rate every night between 00:30 and 04:30. 

Since 2022, Octopus has stipulated that you must own an EV to be eligible for this tariff. However, Ofgem rules dictate that all tariffs must be available to all consumers, so if you insist, they will transfer you to the tariff.

Octopus has introduced a new version of Go, called Intelligent Octopus, which provides 6 hours of discounted rate charging every night between 23:30 and 05:30.

Octopus utilises a smart EV charger to determine when to charge the car during this period when the grid load and cost are at their lowest. This strategy helps to balance the grid by preventing all EVs from charging simultaneously. However, only certain chargers and EVs are currently compatible.

Over the past 12 months, while wholesale prices have been volatile, the Go tariffs have proven to be the best option for Wondrwall, as they provide low costs at predictable times for importing energy.

The major drawback for both tariffs is that you can only earn 4.1p per kWh for the energy you export.

These tariffs are most appealing if you own an EV. In these instances, this is the tariff to choose, and Wondrwall will optimise the import accordingly.

Octopus Flux

Octopus Flux is a novel tariff from Octopus Energy, specifically targeted at homes with medium to large solar PV arrays (comprising 5 or more panels) and battery storage.

Similar to Agile, Flux offers optimal rates for both importing/buying and exporting/selling electricity. It supports grid balancing during peak times by providing a cheaper overnight period and a more expensive peak period (applicable to both import and export), as can be seen in the chart below.

In addition to charging the battery when energy is cheaper, you have the option to sell back to the grid when you have excess solar. Alternatively, you can choose to compel your battery system to export back to the grid. Nothing is preventing you from buying from the grid earlier and selling to the grid later.

Octopus Flux is best suited to systems that lack the benefits of an intelligent home energy management system like Wondrwall, as there are only three different electricity prices during the day. Occupants can choose to manually program when the battery charges and discharges.

Wondrwall integrates seamlessly with Flux and can optimise the home more effectively than manual operation by automatically deciding to use off-peak energy when there is insufficient solar generation available, based on weather forecasts and historical usage patterns.

Typically, Wondrwall performs better with Agile, as it can effortlessly optimise import and export to align with the 48 different pricing slots available during a single day for import and export. However, as can be seen below, the Flux import costs are higher than Agile, so it is currently not recommended. 

It’s worth noting that Flux does offer a higher export price, but since the primary goal is to consume rather than export solar energy, this is less significant.

Octopus Cosy

Octopus Cosy is a recent tariff from Octopus, specifically designed for homes equipped with heat pumps. It offers two low-price slots each day, enabling you to economise by scheduling your heating during these times and avoiding the peak period from 4pm to 7pm. However, the drawback is that energy costs significantly more during this peak period.

This tariff is suitable for homes with heat pumps that have ‘dumb’ controls. However, as we can see below, the Agile import tariff is typically more appealing than Cosy. Therefore, for Wondrwall, it would be more sensible to opt for Agile.

While this tariff does not have a specific export tariff, it can be paired with either the standard Octopus export tariff or the Agile export tariff.

Octopus Tracker

Octopus's Tracker tariff is a dynamic tariff that adjusts to wholesale energy prices daily. Each day, your energy price fluctuates based on an independently published wholesale market price. This tariff bears similarity to the Flexible tariff, with the key difference being that the Flexible tariff alters every three months as opposed to daily. Given the volatility of the wholesale market, this tariff does not offer any particular advantages when used in conjunction with Wondrwall.

Octopus Standard, Fixed and Flexible

All of these tariffs, irrespective of their designation, are fixed tariffs and not Time-of-Use (TOU) tariffs. Consequently, they offer a uniform price throughout the day.

The Flexible tariff distinguishes itself by adjusting its price every three months in line with changes to the Ofgem price cap. In contrast, the Fixed tariff maintains the same price for a more extended period, such as one or two years. Presently, Octopus only provides the Flexible tariff, implying that the price will alter every three months, contingent on the wholesale price of energy.

The electricity price remains constant, regardless of the time of day. As can be observed, when compared to the TOU tariffs, these tariffs are less appealing for a system like Wondrwall, which can modulate energy import to the cheapest periods. Opting for them will likely result in higher energy bills.

Export Tariffs

Historically, the advantage of solar energy was predicated on the amount exported. The solar feed-in tariff (FIT) was in operation from 2010 until March 2019.

Given that you pay 34p per kWh for electricity you import, but only receive 7-15p per kWh you export, the primary objective for homes with solar power today is to utilise as much of the solar energy as possible for domestic use.

However, this does not imply that exporting is not of interest. Wondrwall is engineered to export energy during peak times to maximise revenue and assist in grid balancing, making the selection of a TOU export tariff such as Agile or Flux a sensible choice.

We strongly recommend signing up for an export tariff with your Wondrwall system.

To be eligible for exports, your generation needs to be registered with the Distribution Network Operator (DNO) so that you can be issued an export Meter Point Administration Number (MPAN). This process is automatically carried out for all Wondrwall installations.

Octopus Energy offers four export options:

• Smart Export Guarantee (4.1p per unit)
• Outgoing Fixed (15p per unit)
• Outgoing Agile (prices change half-hourly based on day-ahead wholesale rates)
• Flux Export (as mentioned above)

The import tariff you are on determines which export tariff you can use.

Import Tariff	Export Tariff
Octopus GO, Intelligent Octopus	Smart Export Guarantee
Standard, Fixed, Flexible, Tracker	Outgoing or Agile
Flux	Flux
Agile	Agile

It’s important to note that Octopus limits the export tariff for GO to the Smart Export Guarantee, which only offers 4.1p per kWh, compared to 15p for Outgoing and even higher for Agile and Flux (depending on when you export). See below for a comparison of the export costs.

While Flux may appear attractive due to its high export prices, it’s worth noting that the import costs are also higher.

Summary

In the end, the choice of electricity tariff is entirely up to you.

However, to maximise savings and minimise bills with your Wondrwall system, there are two key considerations:

Switch to a TOU tariff

Transitioning to a TOU tariff with Wondrwall can significantly boost the savings on your energy bill. Wondrwall will automatically utilise energy when it’s cheapest and avoid usage during expensive periods, if possible. Regardless of the TOU tariff you opt for, the Wondrwall system will optimise your energy consumption to reduce your bills. Our recommendations are as follows:

• For most people, we recommend either the Agile or Flux tariff.
• If you own an EV, we recommend using an EV tariff.

We advise against the Tracker or any Standard, Fixed or Flexible Octopus tariffs as these typically result in higher energy bills.

While the Flux and Cosy tariffs perform a similar function, they are designed for ‘dumb’ systems. Therefore, you will typically achieve better results using Agile when paired with Wondrwall.

Set up an export tariff

Any export tariff is better than none. However, since Wondrwall is designed to export at peak times to maximise revenue, we recommend Agile or Flux to match the import tariffs.

 

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If you have any issues which cannot be solved using our Support Hub, please don't hesitate to contact the Wondrwall Support Team for further assistance.

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