New Delhi - The Indian government is set to implement a new 'time of the day' (ToD) tariff, allowing electricity consumers across the country to save up to 20% on their power bills by scheduling their usage during solar hours or daytime. This tariff system entails varying rates throughout the day, enabling consumers to avoid high-power consumption activities such as washing clothes and cooking during peak hours when electricity rates are higher.
Starting from April 1, 2024, the ToD tariff will be applicable to commercial and industrial consumers with a demand of 10 kW and above. For all other consumer categories, except agricultural, the new rule will take effect from April 1, 2025. Consumers with smart meters will experience the ToD tariff immediately upon installation.
The introduction of the ToD tariff and rationalization of smart metering provisions were announced as amendments to the Electricity (Rights of Consumers) Rules, 2020, according to a statement by the Ministry of Power. Under the new tariff system, electricity rates during solar hours (specified as eight hours per day by the State Electricity Regulatory Commission) will be 10% to 20% lower than normal charges, while rates during peak hours will be 10% to 20% higher.
Union Power and New & Renewable Energy Minister R K Singh explained that the ToD tariff is beneficial for both consumers and electricity providers. It sends price signals to consumers, encouraging them to manage their power consumption based on the tariff structure. With awareness and effective utilization of the ToD tariff, consumers can reduce their electricity bills. Singh also noted that since solar power is cheaper, the tariff during solar hours will be lower, while non-solar hours will have higher rates due to the use of thermal, hydro, and gas-based power.
Furthermore, the ToD tariff is expected to improve the integration of renewable energy sources into the grid and facilitate India's energy transition. It will incentivize increased demand during high renewable energy generation hours, allowing for a larger quantity of renewable power to be integrated into the grid.
Many State Electricity Regulatory Commissions (SERCs) have already implemented the ToD tariff for large commercial and industrial consumers. The installation of smart meters will facilitate the introduction of the ToD tariff for domestic consumers, as mandated by the tariff policy.
In addition to the ToD tariff, the government has also simplified the rules for smart metering. Penalties for exceeding the maximum sanctioned load/demand have been reduced, and no penalties will be imposed on consumers based on the maximum demand recorded by the smart meter before its installation date. The load revision procedure has been rationalized to allow upward revisions of maximum demand only if the sanctioned load exceeds at least three times in a financial year. Smart meters will be remotely read at least once a day, and consumers will receive data to make informed decisions about their electricity consumption.
The Electricity (Rights of Consumers) Rules, 2020, were introduced to ensure that power systems serve consumers and that consumers have the right to get reliable and quality services.