29-07-2023 : Union Power Minister RK Singh has suggested that Micro, Small, and Medium Enterprises (MSMEs) should consider shifting their power consumption to solar hours to benefit from Time of Day (ToD) tariffs, which can offer at least a 20% cost advantage compared to normal tariffs. The term “solar hours” refers to an eight-hour duration in a day as specified by the State Electricity Regulatory Commission.
During these designated solar hours, the electricity tariff is set to be at least 20% lower than the regular tariff, providing an opportunity for consumers, including MSMEs, to strategically manage their power consumption and take advantage of cost savings. The ToD tariff structure comprises different rates for power consumption during peak hours, solar hours, and normal hours, allowing consumers to make informed decisions based on price signals. In June of this year, the Ministry issued the Electricity (Rights of Consumers) Amendment Rules, 2023, which included provisions for the ToD tariff. According to the rules, during the peak period of the day, the ToD tariff for commercial and industrial entities will not be less than 1.20 times the normal tariff, while for other consumers, it will not be less than 1.10 times the normal tariff. In contrast, the tariff for solar hours, as specified by the State Commission, will be at least 20% less than the normal tariff for the relevant category of consumers. The implementation timeline for the ToD tariff has also been outlined. For commercial and industrial entities with a maximum demand of more than 10 kW, the ToD tariff will come into effect no later than April 1, 2024. For all other consumers, except agricultural consumers, the ToD tariff will be implemented not later than April 1, 2025.
By embracing the ToD tariff system and shifting their power consumption to solar hours, MSMEs and other consumers have an opportunity to optimize their energy usage, reduce costs, and contribute to a more sustainable energy ecosystem. This shift in consumption behavior aligns with the government’s focus on promoting renewable energy sources and encouraging responsible power consumption patterns. As the benefits of ToD tariffs become apparent, it is expected that more businesses, including MSMEs, will adopt this strategy, leading to a positive impact on India’s overall energy consumption profile. Moreover, with clear guidelines and a set timeline for implementation, businesses can plan their transition to the ToD tariff system effectively.
The move towards ToD tariffs represents a significant step in India’s efforts to promote renewable energy and optimize electricity consumption. It empowers consumers to play an active role in managing their energy costs and further contributes to the nation’s sustainable development goals. As the country moves towards a greener and more energy-efficient future, initiatives like ToD tariffs serve as vital pillars in achieving a cleaner and more sustainable energy landscape.