Standing charges: why they matter more than the unit rate
The unit rate is the number everyone looks at, and for most homes it is the number that matters. Once solar and a battery cut your imports to a fraction, the fixed daily charge quietly takes over the bill, and comparing tariffs by unit rate alone starts giving wrong answers.
What a standing charge is
Every UK electricity tariff has two parts. The unit rate is what you pay for each kWh you import. The standing charge is a fixed amount for every day you are connected, whether you import a great deal, a little or nothing at all. It is set in pence per day, it appears on your bill as a separate line, and it varies by supplier, by tariff and by region.
It pays for things that do not scale with how much you use: the cables and substations that bring power to your street, the meter, some of the supplier's own costs, and a share of policy costs that the regulator lets suppliers recover this way. An export tariff usually has its own standing charge too, though it is commonly zero.
Why it is charged whatever you use
The point of a standing charge is that the connection costs money to keep whether or not you draw on it. A home that goes a fortnight without importing a single kWh still has a live supply, a meter being read and a network standing ready. So the charge lands every day, every month of the year, including the sunny ones when your panels covered everything.
Nothing you do with your panels or your battery reduces it. That is the whole reason it matters more to a solar home than to anyone else.
How it grows into most of the bill
It helps to think of the standing charge in kWh. Say, for a particular tariff, a day's standing charge costs about the same as two kWh at the day rate. Over a year that is the equivalent of around 730 kWh you pay for without receiving.
| Home | Imports a year | Standing charge, in kWh-equivalent | Standing charge's share of the bill |
|---|---|---|---|
| No solar, no battery | 4,000 kWh | 730 | about 15 % |
| Solar only | 2,500 kWh | 730 | about 23 % |
| Solar and battery | 1,200 kWh | 730 | about 38 % |
| Solar and battery, June | 30 kWh in the month | 60 | about two-thirds |
The figures are illustrative, and the share depends on your own tariff's ratio of standing charge to unit rate, but the shape is universal. Cut imports by 70 % and the unit-rate part of the bill falls by 70 %; the standing charge does not fall at all, so its share rises. In a summer month when the house imports almost nothing, the bill is mostly standing charge. On a cheap-window tariff the effect is stronger still, because much of what you do import is bought at the cheap rate, which shrinks the unit-rate part further.
Why the unit rate alone misleads
Suppose two tariffs. A has a lower unit rate; B has a lower standing charge. The gap in standing charges is, say, 10p a day. That is about £36 a year, however much you use.
- A home importing 4,000 kWh a year needs A's unit rate to be under 1p cheaper to come out ahead. Almost any unit-rate difference will do, and A wins.
- A home importing 1,200 kWh needs A's unit rate to be 3p cheaper before the lower standing charge stops winning. That is a much bigger gap, and B often wins.
Those numbers are made up to show the arithmetic, not any real tariff. The lesson is that the break-even point depends on your import volume, and a solar-and-battery home sits far below the volume most comparisons assume. A tariff that is best for the average home can be the wrong one for you, by a margin that the unit rate alone will never show.
Export does not offset it
Export income arrives as a credit for the kWh you sent out, priced at the export rate. It does not cancel the standing charge, which is charged on the import side of the account and continues whatever you export. If your import and export are with different suppliers, which the Smart Export Guarantee allows, the two never meet at all. A home that generates more over a year than it uses still pays the standing charge on every one of those days. UK export tariffs explained covers what export can and cannot do for the bill.
Regional variation
Great Britain is divided into fourteen electricity distribution regions, and the standing charge differs between them because the network costs differ. The gap between the cheapest and the dearest region can be large, sometimes half as much again. Unit rates vary by region too, but less. So two homes with identical solar, battery and habits, one in London and one in the north of Scotland, can have noticeably different bills for reasons that have nothing to do with how they run the battery. You cannot change your region, but it is worth knowing when a figure quoted online does not match your bill.
Tariffs with no standing charge
Tariffs without a standing charge exist from time to time. The supplier still has the fixed costs, so it recovers them elsewhere, usually with a higher unit rate, and sometimes with a higher rate on the first units used each day. The arithmetic is the same break-even as above, run the other way: the higher unit rate costs you more on every kWh, and the missing standing charge saves you a fixed amount a day, so the tariff pays only below a certain import volume.
For most homes that volume is very low, and the tariff is aimed at holiday homes and empty properties. A solar-and-battery home with low imports is closer to that line than most, and in some cases crosses it. Two cautions. Winter imports are where a solar home's kWh are concentrated, and the higher unit rate bites hardest exactly then. And availability changes; check what is on offer for your region and read the terms.
How to compare tariffs properly
The only comparison that holds is a whole-year cost on your own profile. That means:
- Take a year of your own half-hourly imports and exports. A smart meter's data, or an energy app that records it, gives you this.
- For each tariff, price every half-hour's import at that tariff's rate for that time, and every half-hour's export at the paired export tariff's rate.
- Add 365 days of the standing charge.
- Subtract the export income.
- Allow for how differently you would run the battery on each tariff, because the profile itself changes when the cheap hours move.
Step five is the hard one, and it is why a comparison site's number, built on an average profile and a fixed usage, tells a solar home so little. How much does a home battery actually save in the UK? goes into the battery side of that arithmetic.
In SunHarvest
Your real tariff in SunHarvest carries its standing charge alongside the unit rates, and the day's standing charge is included in Spent on Home and on the Energy page, so the money figures show the whole bill rather than the unit-rate part. Past days keep the standing charge that was true then, so a switch does not rewrite history. The tariff comparison does step five for you: it replays up to a year of your own metered half-hours against every Octopus tariff for your region, with the battery run the best way for each, standing charges included, and ranks the results by yearly cost. Your current tariff appears both as it actually ran and as it could have, so the gap shows what better automation alone would be worth.
General information, not financial or electrical advice. Tariff terms, prices, warranties and connection rules change and differ by supplier, region and installation; check the current documents for yours. SunHarvest is not affiliated with Tesla or Octopus Energy.