Time-of-day tariff
Also called: ToD tariff · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
A time-of-day (ToD) tariff means the price of electricity changes with the hour. Power costs more at peak hours, when demand is highest. It costs less during solar hours, when cheap solar power is plentiful. The aim is to nudge consumers to shift their use, such as running pumps or machines, away from the peak. This eases pressure on the grid and makes better use of renewable power.
Example
In India, ToD tariffs apply from April 2024 to commercial and industrial consumers with a connected load of 10 kW or more, and from April 2025 to most other consumers except agriculture. A factory that moves heavy work to daytime solar hours pays a lower rate.
Don't confuse with
- Cross-subsidy: here tariffs differ by type of consumer, with industry paying more so farmers can pay less. ToD tariffs differ by time of use.
Related concepts
- Energy infrastructure
- Energy security
- Plant load factor
- Aggregate technical and commercial losses
- Power purchase agreement
- Cross-subsidy
- Open access (electricity)
- Feed-in tariff
- Levelised cost of electricity
- Grid parity