How to get free electricity in UK

I know what you’re thinking: What is this ridiculous clickbait headline all about? Well, a few weekends ago I charged my electric car, cooked my lunch in my oven and washed my clothes for a few hours completely free of charge. Last weekend my electricity cost less than 8 pence per kWh to do the same thing. On average I currently save 40 per cent on my electricity bill compared to the extortionate rate most people in the UK are now paying.

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

I’ve been obsessed with my electricity consumption for the past few months thanks to a mix of UK energy market prices and buying a new electric car. A friend recommended Octopus Energy’s Agile contract, which offers variable pricing based on wholesale rates every 30 minutes. He had been using it all winter at great savings as wholesale electricity prices in the UK had started to fall in recent months. By 2023, Octopus Agile prices have fallen well below the Energy Price Guarantee subsidy introduced by the UK government to limit maximum consumer prices for electricity after wholesale prices surged following the Russian invasion of Ukraine.

Octopus Energy releases 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 usually the usual rates of 34p or even 35p per kWh, but outside those times it has averaged around 20p per kWh for me personally over the past few months.

Octopus Energy’s Agile rate is also ideal for EV owners.

You can save a ton of money if you can shift your energy use outside the peak window. Even if you can’t, you’ll still save because Agile rates for around 20 hours per day are well below standard rates.

A standard electricity rate from UK providers is currently around 34 pence per kWh, with a daily service charge of up to 50 pence. These rates and service charges vary slightly between providers, but the vast majority of people in the UK currently pay more than 30 pence/kWh. In July, the limit in the UK will be set at 30 pence per kWh, a rate that falls under the current energy price guarantee and the Ofgem regulator returns with its own price caps.

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

So why haven’t I and many others heard about this until recently? Variable rates are risky. Octopus Energy brings Agile to the market as a rate ideal for those with electric cars, storage heaters, or anyone who can shift their energy consumption off-peak. But it also warns that prices could reach 100 pence per kWh at any time, three times higher than standard rates at the moment. That sounds scary, but it’s something that rarely happens. In fact, by 2023 it will not have exceeded 40 pence per kWh in most places in the UK by any means.

Average rates for Octopus Energy Agile over the last 365 days in the East Midlands.
Image: UK energy statistics

That’s largely because wholesale prices have come down, creating more stable averages and moments of price drops where you get hours of free electricity. You can see in the chart above that the price on Octopus Energy Agile has dropped to 0 cents per kWh or lower several times over the past six months.

Despite the discounts of recent months, you also see a continued spike throughout most of December, where cap prices skyrocketed to 80 pence per kWh, a very expensive rate that customers would have seen especially during the peak period from 4 to 7 p.m. . If wholesale prices continue to stabilize and fall, hopefully we won’t see this again this winter. If prices do skyrocket, you can always immediately switch back to the standard rate, which is capped by Ofgem’s guarantee.

If prices rise, you can always switch back to a standard rate

This volatility makes it difficult to recommend such an energy tariff to anyone in the UK, which is another reason why most people have never heard of Agile. Consumer attorney Martin Lewis, better known as the “Expert in saving money”, has constantly urged the government to help with electricity prices, but he rarely recommends that people switch to variable rate tariffs. UK consumers have looked to Lewis’s recommendations throughout this energy and cost of living crisis, but he highlighted Octopus Energy’s “smart” Agile fare in April. Now that we have six months of stable data, I think it’s time to recommend Agile until we get some decent flat rates back in the market.

Today’s rates in the Octopus Watch app for iOS.
Screenshot of Tom Warren / The Verge

If you are smart enough to keep track of the daily prices, you will benefit greatly from this. I have personally become an Octopus Energy seller with my friends and family as the company even offers a referral program where you share £100 with a friend who recommends you to the service. I use the excellent Octopus Watch iOS app for alerts on when prices drop and to see price rates over 24-hour periods, but Octopus also publishes it in its own mobile app and website.

you shall need the latest SMETS2 smart meter (some SMETS1 are supported), 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 and Octopus will arrange the meter installation. Octopus has also started marketing it tracker rate recently, which is similar to Agile but has more restrictions on how long it takes to get out if prices go in the wrong direction.

It’s also just refreshing to use a utility that is environmentally friendly and has great customer service. In an ever more inefficient and broken UK energy marketOctopus Energy is way ahead of the game in providing 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 technology and point-of-sale to reduce the time I spend watching rates. But I thought I’d share this tip now, in case it helps you save some great British pounds.