UK electricity bills could fall if time-varying tariffs become the default, IFS and LSE report finds

From the Newshound archive · first published 22 September 2026 · last updated 23 September 2026.

Households across Britain could see energy bills drop if the government makes time-varying electricity tariffs the standard default, according to a new report from the Institute for Fiscal Studies and LSE, published as part of the IFS Green Budget. Electricity costs vary dramatically by time and location, yet most consumers pay flat rates that ignore those differences entirely. Scotland could benefit most, where electricity is often effectively free during windy weather — yet the grid currently pays to switch off wind turbines to prevent overload.

Shifting the default household tariff to time-varying pricing would reward consumers who charge EVs or run appliances at off-peak hours.

Scotland's frequent wind surplus means electricity can reach near-zero cost, while gas generators in southern England drive prices sharply upward at peak times.

The report also proposes higher heat pump subsidies in low-cost electricity areas and bigger solar panel grants where gas generation dominates — targeting help where it matters most.