Energy bills rebate: households to be paid to turn off appliances during peak hours to avoid blackouts

Plans to reward households if customers help ease the strain on the power grid are set to be announced in the next two weeks

Households with smart meters could be paid to switch off high-energy appliances such as dishwashers during peak times this winter.

The National Grid Electricity System Operator (ESO) is set to announce plans to offer rebates when customers reduce the use of machines such as tumble dryers, dishwashers and electronic devices during the hours of 5pm and 8pm, which would help reduce the risk of blackouts.

Not all homes have smart meters (image: AFP/Getty Images)
Not all homes have smart meters (image: AFP/Getty Images)
Not all homes have smart meters (image: AFP/Getty Images)

When will the scheme begin?

According to The Sunday Times, the grid will apply to the Ofgem regulator for approval with the idea the scheme will open by late October of this year.

A National Grid ESO spokesman said: “We are developing a new service that will be available for consumers to benefit from across this winter and will be announcing further information soon.”

However, it is understood the plans will be revealed in the next two weeks, with consultations between energy providers and the UK’s energy regulator Ofgem to take place.

What rebates are being offered? 

It is reported that for minimising the use of goods such as dishwashers, washing machines and tumble dryers, rebates could be as high as £6 per kWh saved.

One KwH could run a dishwasher for less than an hour.

These plans follow a trial with Octopus Energy customers earlier this year, from 11 February to 31 March.

Smart meter customers could earn up to 35p for every kWh saved, with the aim being to reduce demand from 9am-11am and 4:30pm-6:30pm.

Is the energy price cap rising? 

Ofgem’s energy price cap, which is the limit on the maximum amount suppliers can charge, will be rising every three months instead of the previous six months, with many customers already struggling with the rising cost of living.

Currently, the average price cap is £1,971 and is expected to rise 65% to £3,582 in October, before hitting £4,200 in January 2022.

However, experts at Auxilione consultancy have warned energy prices could spike up to £6,000 per year from next April.

Changes to the cap for October and December will be announced on Friday by Ofgem.

What help is being provided with the rising energy cap? 

The government has set out the Energy Bills Support Scheme, where millions of households across Britain will receive a non-repayable £400 discount over six months from October 2022.

A UK Government spokesperson said: “We are providing a £400 discount on energy bills this winter, and £1,200 of direct support for the most vulnerable households.

“While no Government can control global gas prices, over 22 million households are protected by the price cap which continues to insulate households from even higher prices.”

However, Martin Lewis has advised customers to look into fixed-rate energy tariffs which may work out cheaper as this is a contracted rate of paid per unit of energy and will be set for an agreed amount of time, which is usually around 18 months.

He said; “The gas and electricity market is in crisis.

“Many are paying double what they were a year ago, and another huge hike is expected in October.

“So understandably the big question I’m being asked is, ‘Should I stick on the price cap, or lock into a fixed energy tariff?’

“If you’re offered a year’s fix at no more than 95% above your current price-capped tariff, or 100% more if you very strongly value budgeting certainty, it’s worth considering.”