UK Electricity Bills: Standing Charges, Unit Rates and Economy 7

What actually makes up your bill

A UK electricity bill has exactly two moving parts: a standing charge, a fixed fee in pence per day that you pay no matter how much power you use, and a unit rate, a price in pence per kilowatt-hour (kWh) charged on everything you actually consume. The formula behind every bill on this site's calculator is simply annual cost = standing charge × 365 + daily kWh × 365 × unit rate.

The standing charge covers network maintenance, meter operation and supplier overhead — the cost of simply being connected to the grid — and is set by Ofgem-regulated network costs plus a supplier's administrative margin. The unit rate is far more volatile: it tracks wholesale gas and electricity prices, which in turn move with weather, demand and international gas markets, so the unit-rate component is where almost all of the year-to-year swings in a bill come from.

Where the units actually go

Not every appliance pulls its weight equally. Water heating can account for 30-50% of a bill in homes with an electric immersion heater or hot-water tank, ovens and hobs used daily are a major contributor, and modern TVs and games consoles draw more than people expect. Washing machines, dryers, dishwashers and laptops sit in the middle; lighting and small appliances matter but rarely dominate — LED bulbs alone use up to 80% less energy than the incandescent bulbs they replaced.

annual bill = standing_charge × 365            (pence, then ÷100 for £)
           + daily_kWh × 365 × unit_rate      (pence, then ÷100 for £)

Economy 7 and off-peak tariffs

A dual-rate meter — the classic Economy 7 setup — splits the day into a cheap overnight window (commonly about seven hours) and a standard daytime rate. The calculator on this page lets you set what fraction of daily usage happens overnight and re-runs the same annual consumption on that split: day_kWh = daily_kWh × (1 − night_fraction), and the annual off-peak cost becomes 365 × (day_kWh × unit_rate + night_kWh × night_rate), with the standing charge unchanged either way.

The result only pays off once a meaningful share of usage is genuinely shifted into the night window — storage heaters, EV charging or overnight appliance timers are the classic candidates. If only 10-15% of usage happens at night, the saving from a cheaper night rate is easily swamped by even a small daytime premium, and the off-peak plan can end up costing more overall.

Where the savings actually come from

Government levies (the Climate Change Levy, contributions to renewable-energy obligations) and VAT, charged at a reduced 5% on domestic energy in the UK, sit on top of the two core components and are not itemised separately in this simplified model. On the demand side, insulation, a smart thermostat, LED lighting, running full loads in washing machines and dishwashers, and cutting standby "vampire power" are the interventions that move the daily-kWh slider down — which, because usage cost scales linearly with consumption, is almost always the biggest lever available to a household.

Frequently asked questions

Try it live

Everything above runs in your browser — open Electricity Bill Calculator and change the parameters while it is running. Nothing is installed, nothing is uploaded, the whole model lives in one tab.