Time of Day Tariff

What ToD tariff is

Time of Day (ToD) tariff is an electricity pricing structure where the per-kWh tariff varies by time of day. The DISCOM divides the 24-hour cycle into multiple time blocks (typically 2 to 4) and applies different tariffs to each. Peak hours, when grid generation is most expensive and demand highest, carry the highest tariff. Off-peak hours, typically late night, carry the lowest. Normal hours sit in between.

ToD has been used for HT industrial consumers in India for decades. The mechanism is now being extended to LT commercial and (increasingly) residential consumers above defined thresholds, following the Electricity (Rights of Consumers) Rules 2020.

For solar, ToD has significant implications. Solar generation peaks during midday (typically normal-tariff hours in most ToD structures). Solar offsets daytime consumption at normal rates but does not directly capture peak-hour value. Battery storage paired with solar can store daytime generation and discharge during peak hours, capturing the tariff differential as additional savings.

Typical ToD time blocks

The exact time blocks vary by state. Common structures:

Some states have:

Multiple peak blocks (morning peak 8 to 10 AM, evening peak 6 to 10 PM).

Seasonal variations (different blocks for summer and winter).

Weekend-weekday differentials.

Always check the specific state’s ToD definition before planning.

ToD tariff examples

For a HT consumer with normal-tariff energy charge of Rs 8 per kWh:

Off-peak (10 PM to 6 AM): Rs 6.50 to Rs 7.20 per kWh.

Normal (6 AM to 6 PM): Rs 8.00 per kWh.

Peak (6 PM to 10 PM): Rs 10.40 to Rs 12.00 per kWh.

The 4-hour peak block at Rs 10.40 to Rs 12.00 per kWh is substantially more expensive than the 8-hour off-peak at Rs 6.50 to Rs 7.20.

For a consumer using 5,000 kWh per month split equally across blocks:

Without ToD (flat Rs 8): Rs 40,000.

With ToD as above: approximately Rs 41,000 to Rs 43,000.

The cost increase is modest unless the consumption pattern is heavily peak-weighted. Consumers who can shift loads to off-peak (industrial second-shift operations, night-time cooling, electric vehicle charging) often save money under ToD.

ToD and solar economics

Solar generation profile in India peaks between 10 AM and 2 PM, falls to zero between sunset and sunrise. Almost all solar generation falls within “normal” tariff hours.

The implications:

Solar offsets normal-hour grid consumption at Rs 8 per kWh.

Peak-hour grid consumption (Rs 10 to Rs 12 per kWh) is not directly offset by solar (since solar is not generating during those hours).

The solar savings calculation should use normal-tariff value, not peak.

The economic gap between normal-tariff value and peak-tariff value is exactly the opportunity for storage.

Solar plus battery for ToD arbitrage

Battery storage paired with solar can capture the ToD tariff differential.

Day: Solar charges the battery (effectively at zero marginal cost beyond solar’s cost basis).

Evening peak (6 PM to 10 PM): Battery discharges, displacing peak-tariff grid purchase.

Result: 4 hours of peak-tariff offset per day, at a tariff Rs 3 to Rs 4 per kWh higher than what solar alone would offset.

For a 100 kWh battery cycling once daily, the peak-hour savings could be Rs 1,200 to Rs 1,600 per day (100 kWh times Rs 3 to Rs 4 differential), or Rs 4 to Rs 6 lakh annually.

For a battery costing Rs 50 lakh installed, payback from ToD arbitrage alone could be 8 to 12 years. Combined with peak demand shaving benefits, the payback drops further.

ToD and net metering interactions

Some states apply ToD adjustments to net metering credits.

Time-block 1:1 net metering: Solar export during day credited 1:1 against grid import during day. Limited cross-block credit.

Conversion factor net metering: Solar exported off-peak yields fewer kWh credit during peak. For example, 100 kWh banked off-peak may yield only 70 to 80 kWh withdrawable at peak.

Aggregate 1:1 net metering: Total monthly export netted against total monthly import regardless of time block. This is the simplest structure and most favourable for solar consumers.

The specific mechanism is set by each state SERC.

State-by-state ToD landscape

Tamil Nadu, Maharashtra, Karnataka, and Andhra Pradesh have had ToD for industrial consumers for years. New rollout to commercial and residential is ongoing.

Gujarat, Rajasthan, and Madhya Pradesh have implemented ToD with varying time blocks and tariff differentials.

Delhi and Punjab have implemented or are implementing ToD per central guidelines.

For each state, the latest tariff order from the SERC has the current time blocks and tariffs.

ToD impact on industrial operations

For HT industrial consumers, ToD typically:

Encourages shifting energy-intensive operations to off-peak hours (second and third shifts at night).

Penalises peak-hour operations.

Provides opportunity for cost reduction through load management.

Many factories operate continuous (3-shift) operations partly to spread load across time blocks and reduce ToD exposure. Single-shift day operations carry the highest ToD cost.

For commercial buildings (offices, malls), peak hours typically coincide with occupancy peaks, making ToD a real cost driver.

Common mistakes with ToD

Treating ToD as just another tariff. The dynamic nature creates opportunities for active load management.

Ignoring ToD signals when planning solar. Solar alone does not optimise for ToD.

Underestimating storage value under ToD. Battery payback improves significantly with peak-to-off-peak arbitrage.

Mismatching net metering structure with ToD. Some states reduce the value of solar export during off-peak hours.

Not modelling consumption patterns by time block. Average consumption alone does not reveal ToD exposure.

Best practices

For HT and large LT consumers, model existing consumption by time block and identify ToD exposure.

Evaluate load shifting opportunities to move energy-intensive operations to off-peak hours.

For solar planning, consider adding battery storage where ToD differentials are significant.

For new commercial construction, design for ToD-aware operations: efficient daytime cooling, off-peak water heating, smart EV charging.

Track ToD tariff revisions in SERC orders annually. The time blocks and tariffs evolve.

For multi-shift industrial operations, optimise shift patterns to balance ToD exposure.

Standards and references

ToD tariffs are governed by state SERC tariff orders, the Electricity (Rights of Consumers) Rules 2020, and the Electricity Act 2003 framework. Time-of-day capable meters comply with IS 16444 (smart meter standard). Implementation timelines and specific time blocks vary by state.

Related glossary terms

• Sanctioned Load
• Contract Demand
• HT vs LT Connection
• DISCOM
• Net Metering
• Battery Energy Storage System
• LFP Battery
• Hybrid Inverter

Key takeaways

Time of Day (ToD) tariff varies the per-kWh electricity rate by time block, with peak evening hours typically 1.2x to 1.5x of normal day tariff and off-peak night hours 0.8x to 0.9x. ToD is increasingly mandated for HT and large LT consumers in India under the Electricity (Rights of Consumers) Rules 2020. Solar alone offsets daytime consumption at normal rates without directly capturing peak-hour value. Battery storage paired with solar enables ToD arbitrage, charging from solar during day and discharging during peak evening hours to capture the tariff differential.