How to get free electricity in the UK

I know what you’re thinking: what is this ridiculous clickbait headline all about? Well, a couple of weekends ago, I charged my electric car, cooked lunch in my oven, and washed my clothes totally for free over a few hours. Last weekend, my electricity cost less than 8p per kWh to do the same thing. On average, I’m currently saving 40 percent on my electricity bills compared to the extortionate capped rate that most people in the UK are forced to pay right now.

So, how? Octopus Energy, and I want everyone to know about it.

I’ve obsessed over my electricity usage over the past few months thanks to a mix of the UK’s energy market prices and buying a new electric vehicle. A friend recommended Octopus Energy’s Agile contract, which provides variable pricing every 30 minutes based on wholesale rates. He had been using it all winter with big savings, as wholesale electricity prices have started to drop in the UK in recent months. In 2023, Octopus’ Agile prices have dropped far below the Energy Price Guarantee subsidy that the UK government introduced to cap the maximum consumer prices for electricity after wholesale prices surged following Russia’s invasion of Ukraine.

Octopus Energy issues its 30-minute rates every day at 4PM so you can see when the best times are to use your dishwasher, washing machine, oven, or charge an electric car. Peak rates between 4PM and 7PM are typically the usual rates of 34p or even 35p per kWh, but outside of those times, it has averaged at around 20p per kWh in recent months for me personally.

You can save a bundle of money if you can shift your energy usage outside the peak window. Even if you can’t, you’re still going to save because, for around 20 hours of the day, the Agile rates are far below the standard ones.

A standard rate for electricity across UK providers right now is around 34p per kWh, with a daily service charge of up to 50p. These rates and service charges vary slightly per provider, but the vast majority of people in the UK are currently paying in excess of 30p / kWh unless they’re on a fixed contract with lower rates. In July, the cap in the UK will be set at 30p per kWh, a rate that falls below the current Energy Price Guarantee and sees the Ofgem regulator return with its own price caps.

But this price cap is still far beyond what I’m currently paying. Over the past 28 days, I’ve used an average of 16kWh per day at a rate of 16.9p per kWh instead of the 34p per kWh I would have paid on a standard rate. That’s a saving of nearly 50 percent compared to what most people would pay for the same amount of electricity.

So why have I and many others not heard about this until recently? Variable rate tariffs are risky. Octopus Energy markets Agile as a tariff that’s ideal for people with EVs, storage heaters, or anyone who can shift their energy usage outside of peak times. But it also warns that prices can spike up to 100p per kWh at any time, three times higher than the standard rates right now. That sounds scary, but it’s something that rarely happens. In fact, it hasn’t peaked past more than 40p per kWh at all in most places in the UK in 2023.

That’s largely because wholesale prices have been dropping, creating more stable averages and moments of plunge pricing where you get hours of free electricity. You can see in the chart above that pricing has dropped to 0p per kWh or below multiple times over the past six months on Octopus Energy Agile.

Despite the discounts seen in recent months, you can also see a sustained spike for most of December, where the maximum prices shot up to 80p per kWh, a very expensive rate that customers would have seen mostly during the peak 4PM to 7PM window. If wholesale prices continue to stabilize and drop, hopefully we won’t see a repeat of this again this winter. If prices do shoot up, you can always just immediately switch back to the standard rate, which will be capped by Ofgem’s guarantee.

This volatility does make it hard to recommend such an energy tariff to everyone in the UK, which is another reason most people won’t have heard about Agile. Consumer advocate Martin Lewis, better known as the “Money Saving Expert,” has been pushing the government continually to help with electricity prices, but he’s rarely recommended people switch to variable rate tariffs. Consumers in the UK have been looking to Lewis’ recommendations throughout this energy and cost of living crisis, but he did highlight Octopus Energy’s “clever” Agile tariff in April. Now that we have six months of stable data, I think it’s time to start recommending Agile until we have decent fixed rates back on the market.

If you’re savvy enough to track the daily prices, then you’ll benefit greatly here. I’ve personally turned into an Octopus Energy salesman with my friends and family, as the company even offers a referral program where you split £100 with a friend you recommend to the service. I use the excellent Octopus Watch iOS app for alerts on when prices plunge and to see price rates over 24-hour periods, but Octopus also publishes these in its own mobile app and website.

You will need the latest SMETS2 smart meter (some SMETS1 are supported), though, to be able to automatically send meter readings to Octopus Energy and use Agile. If you don’t have a smart meter, you can still switch over, and Octopus will arrange for a meter install. Octopus has also started marketing its Tracker tariff recently, which is similar to Agile but has more restrictions on how long it takes to exit out if prices go the wrong way.

It’s also just refreshing to use a utility company that’s environmentally friendly and has great customer service. In an increasingly inefficient and broken UK energy market, Octopus Energy is way out ahead supplying green energy with one of the best software-as-a-service products I’ve ever seen in the UK.

Eventually, I hope to automate much of this with smart home tech and outlets to limit the time I’m monitoring rates. But figured I’d share this tip right now in case it helps save you some great British pounds.