Electricity consumers in India will now be able to save up to 20 per cent in electricity bills by planning their power consumption.
Rather than being charged for electricity at the same rate throughout the day, the price a user pays for electricity will vary according to the time of day, the power ministry said.
Time of day tariff
The government has introduced a ‘time of the day’ tariff which offers varied rates depending on the time of day.
This allows consumers to avoid using electricity for things like cooking and doing laundry at peak hours when power prices are higher.
People will be able to schedule their chores like washing or cooking during off-peak hours (daytime or solar hours) when tariff is lower.
New tariff system
Under the new tariff system the rate of electricity during solar hours (eight hours in a day as specified by the State Electricity Regulatory Commission) shall be 10 per cent to 20 per cent less than the normal charges.
It will be 10 to 20 per cent higher during peak hours.
When it comes into effect
Starting April 1, 2024, the ToD rate will be in effect for commercial and industrial customers with demand of at least 10 KW.
With the exception of agricultural consumers, the new rule will take effect on April 1, 2025 for all other categories of consumers.
For people who already have smart metres, ToD tariff comes into force as soon as these metres are installed.
Smart meters
With the installation of smart meters, ToD tariff metering at the domestic consumer level will be introduced as per the tariff policy mandate.
The ministry said that the government has also simplified the rules for smart metering.
To avoid inconvenience/harassment of the consumers, the existing penalties for increase in consumer’s demand beyond the maximum sanctioned load/demand have been reduced, it said.
No penalty will be imposed on consumers based on maximum demand recorded by the smart meter for the period before installation date.
Additionally the maximum demand will only be increased if the sanctioned load exceeds at least three times in a fiscal year.
Smart meters shall be read remotely at least once in a day and the data shall be shared with consumers in order to enable them to take informed decision about consumption of electricity, the ministry statement said.
Win-win situation
Union Power and New & Renewable Energy Minister R K Singh termed ToD tariff a win-win situation for consumers as well as the electricity providers.
During non-solar hours thermal and hydropower as well as gas-based capacity is used.
Their costs are higher than that of solar power and this will be reflected in ToD Tariff.
He said since solar power is cheaper, the tariff during solar hours will be less.
“The ToD tariffs comprising separate tariffs for peak hours, solar hours and normal hours, send price signals to consumers to manage their load according to the tariff.
With awareness and effective utilisation of ToD tariff mechanism, consumers can reduce their electricity bills,” Singh said.
The new mechanism will also ensure better grid integration of renewable energy sources thereby facilitating faster energy transition.
