Electricity powers nearly every part of our lives. As energy demand continues to rise, Time of Day (ToD) tariffs have emerged as a key part of India’s national effort to use electricity more efficiently, ease pressure on the grid, and promote cleaner energy sources like solar.
ToD tariffs represent a smarter billing system that rewards consumers for using electricity when it is more affordable and less demanding on the grid. Under this model, electricity costs more during peak hours—when demand is high—and less during off-peak hours, such as sunny afternoons when solar energy is plentiful. By shifting power usage to these cost-effective periods, households and businesses can reduce their bills while supporting a more balanced and sustainable grid.
In this blog, we will explore why ToD tariffs matter, how they work and benefit both consumers and electricity providers, their implementation across India, and how hybrid solar systems and smart meters support ToD adoption.
Why ToD tariffs matter
ToD tariffs help reshape electricity usage, creating a smarter and more efficient energy system for India. They help to:
- Ease peak-hour pressure by shifting consumption to low-demand periods, reducing strain on the grid and costly generation.
- Enable fairer pricing by charging based on actual electricity costs rather than a flat rate.
- Boost industrial efficiency by encouraging off-peak operations, leading to lower bills and better load management.
- Support solar energy by aligning cheaper tariffs with midday solar generation, promoting clean energy use.
- Cut utility costs by reducing reliance on expensive power during peak demand, benefiting the entire system.
How ToD tariffs work
Electricity price varies based on the time of day:
- Peak hours (most expensive): Usually evenings, when demand is high and the grid is under pressure.
- Off-peak hours (cheaper): Late nights or early afternoons, when fewer people use electricity.
- Solar hours (lowest rates): Around midday, when solar energy is abundant and clean power is the cheapest.
How ToD benefits consumers and power companies
ToD tariffs benefit both consumers and power companies by encouraging smarter electricity use.
For consumers, this means lower electricity bills if they shift usage to cheaper, off-peak hours. For example, a factory can shift its power-intensive tasks—like running industrial fans or cooling equipment—to late evenings or early mornings, when electricity is cheaper and grid demand is lower, or a household can use washing machines during sunny afternoons when solar power is abundant and rates are lower.
For power companies, this helps balance demand, avoiding the need to buy expensive electricity during peak hours. It also makes it easier to use more solar energy, which is clean and cost-effective.
The role of smart meters in implementing ToD tariffs
Smart meters play a key role in ensuring that ToD tariffs are applied fairly and accurately, without penalties. Here is how they help:
- Real-time tracking: Smart meters record electricity usage instantly, ensuring that billing reflects actual consumption at the right time rather than relying on past estimates.
- Transparent billing: Since smart meters track usage by the hour, consumers are billed only for what they use, preventing unexpected fines or retroactive charges.
- Fair load adjustments: If electricity demand exceeds the sanctioned limit multiple times, smart meters help gradually adjust the load instead of imposing sudden penalties.
- Encouraging smarter consumption: With real-time insights, consumers can shift usage to off-peak or solar hours, taking advantage of lower tariffs.
India’s ToD tariff implementation
India’s ToD tariff system is being introduced in phases. The Ministry of Power vide notification dated 14.06.2023 had issued the Electricity (Rights of Consumers) Amendment Rules, 2023 wherein the rules for Time of Day (ToD) Tariff were specified.
According to this notification, ToD tariffs were to be implemented from April 1, 2024 for factories and large businesses that use more than 10 kW of power. This encourages them to shift their power usage to solar hours, when power is cleaner and cheaper. Also, as per the notification, ToD tariffs were originally proposed to be implemented from April 1, 2025, for households, small businesses, and institutions (excluding agricultural consumers). Its adoption is still under consideration by various state regulatory bodies and has not been uniformly implemented across states.
Under this system, during peak hours, rates would be 20% higher for commercial consumers and 10% higher for others. In contrast, during solar hours—the part of the day when solar energy is abundant—electricity would cost at least 20% less. ToD pricing would affect the energy part of the electricity bill—not the fixed or other charges. Each state’s electricity regulatory body (State Commission) would decide the exact timings and rates for peak and solar hours.
In continuation to the above, India has set an ambitious goal of installing 250 million smart meters by 2026, enabling a seamless transition to ToD tariffs.
How hybrid solar systems support ToD tariffs for homeowners
Battery-backed or hybrid solar systems are transforming how homeowners manage their electricity usage and costs, especially under ToD tariffs. By storing excess solar energy during the day and releasing it when grid prices peak, these systems help regulate energy usage and reduce dependence on expensive power.
The Enphase Energy System is designed to optimise energy use based on dynamic electricity pricing. Here is how it helps enhance savings under ToD tariffs:
- Customisable tariff settings: Enphase system allows users to configure their electricity plans—whether flat, tiered, or time-of-day—ensuring accurate billing and system responsiveness.
- AI-powered battery optimisation: Using advanced algorithms, the Enphase system predicts solar generation and household consumption to strategically charge and discharge the battery, maximising cost savings.
- Peak-hour prioritisation: Enphase system prioritises solar energy usage during high-tariff periods, reducing reliance on grid electricity when it is most expensive.
- Real-time energy insights: Through the Enphase App, users can monitor consumption patterns and adjust usage to align with lower tariff times.
These features make Enphase a smart ally for consumers navigating ToD pricing.
Conclusion
ToD tariffs are changing how consumers think about electricity. As India advances toward a smarter power sector, embracing time-sensitive energy use is no longer just a policy push—it is an opportunity. For consumers, this means greater control and potential savings, especially when shifting usage to off-peak or solar hours. With smart meters and intelligent solar systems like Enphase, it is easier than ever to make informed, cost-effective choices. As ToD tariff adoption expands, this shift will help build a cleaner, more efficient energy future for everyone.
