Government Permits Industry-Friendly Power Tariffs Through The Day From April 2024
This will make solar hour tariffs cheaper by 20% and peak hour tariffs costlier by 10-20% for industrial consumers.
The government will allow industrial and commercial consumers different tariffs for power consumption according to the time of day instead of charging a uniform rate at all times of the day.
The Ministry of Power has allowed time-of-day tariffs for the abovementioned consumers who use more than 10 kilowatts of power. This will allow consumers to access variable tariffs for eight solar hours and separately for peak hours, an official communiqué from the ministry said.
The move, which will further promote the adoption of renewable power in the grid, will be effective on April 1, 2024.
For all other consumers, except agricultural consumers, the time-of-day tariffs will be effective April 1, 2025. For those consumers with smart metres, it will be effective immediately, the notice said.
The time-of-day tariff for industrial and commercial consumers will be 20% lower than the normal tariff for the eight solar hours. In peak hours, the tariffs will be higher by 1.20 times, or 20%, of the normal tariff.
For other consumers, the tariffs will be 10% higher than normal during peak hours, according to the notice.
The time-of-day tariffs will increase the adoption of renewable power in the grid, said Rupesh Sankhe, vice president and power sector analyst at Elara Securities India Pvt. A lot of industrial and commercial consumers will move away from coal-based captive power to rely on cheaper renewable power, he said.
"It is similar to open access, where more and more people will give up captive installations and tie up for grid-based renewable power. It is equally good for developers, who will make themselves efficient to meet the growing demand," Sankhe said.
The time-of-day tariff shall be applicable to the energy charge component of the normal tariff, it said.
The tariff for each category of consumers shall be displayed on the distribution licensee's website, and consumers shall be notified of any change in tariff, excluding fuel surcharges and other charges, at least one month ahead of time.
