The Central government has implemented two significant changes in the power tariff system across India to encourage the use of renewable energy and enable consumers to save on electricity bills. The newly introduced “Time of Day (ToD)” Tariff system and the rationalization of smart metering provisions are expected to impact billing amounts substantially. The Electricity (Rights of Consumers) Rules amendment, 2020 facilitates these changes.
Under the ToD Tariff system, electricity consumers can potentially save up to 20 per cent on their power bills by strategically planning their energy usage during daytime hours. The system allows for reduced tariffs of up to 20 per cent during the day, promoting the utilization of renewable energy sources like solar power. This move aligns with India’s ambitious goal of sourcing 65 per cent of its energy capacity from renewables by 2030 and achieving net-zero emissions by 2070.
Furthermore, the implementation of this mechanism will enhance the integration of renewable energy into the power grid, facilitating a faster transition towards clean energy. Consumers can benefit by scheduling activities during the lower tariff solar hours while minimizing electricity usage during peak night hours, which incur higher tariffs. Awareness and effective utilization of the ToD tariff mechanism, along with options like adopting solar power, can reduce consumer electricity bills.
The ToD tariff system will initially be applicable from April 1, 2024, for commercial and industrial consumers with a demand of 10 KW and above. For all other consumers, excluding those in the agricultural sector, the new tariff system will take effect from April 1, 2025. Consumers equipped with smart meters will experience the immediate application of the new tariff system upon installation. These changes aim to incentivize energy-conscious behaviour and promote a greener and more sustainable power sector in the country.