Time-of-Day Tariffs and Solar: How ToD Changes the Payback for HT Consumers

Time-of-day (ToD) tariffs lower the energy rate in the eight solar hours and raise it in the evening peak, so each unit your solar plant generates avoids a cheaper unit than before and payback lengthens. Under the Ministry of Power's 2023 rule, the solar-hour rate is 10 to 20 percent below normal. Your state commission sets the actual figures.

What does the central ToD rule actually require?

The Ministry of Power amended the Electricity (Rights of Consumers) Rules, 2020 in June 2023 to introduce ToD tariffs. Its press release states that the tariff during solar hours, a duration of eight hours in a day specified by the State Electricity Regulatory Commission, is to be below the normal tariff, while peak-hour tariff is 10 to 20 percent higher. ToD applies to commercial and industrial consumers with a maximum demand of 10 kW and above from 1 April 2024, and to other consumers except agricultural ones by 1 April 2025. Where a smart meter is installed, ToD takes effect immediately after installation.

The release is inconsistent about the solar-hour discount. Its headline says the tariff is 20 percent less during solar hours; its body says 10 to 20 percent less. Legal summaries of the rule text describe a floor of 20 percent. Do not plan on one figure from a press release. Read the gazette text and, more importantly, your state commission's current tariff order, because the commission fixes the hours, the percentages and which charge they apply to. A commission may not yet have applied the full solar-hour discount in its tariff order, so a bill in one state can look quite different from a bill in another.

What does a ToD schedule look like in practice?

The Maharashtra Electricity Regulatory Commission's order for Tata Power's Mumbai distribution business, effective 1 April 2025, is a clear published example. It is a Mumbai licensee, so use it to understand the structure and not as your own tariff.

The same order steps the rebates up in later years: the night rebate rises to 15 percent in FY 2026-27 and 20 percent from FY 2027-28, and the solar-hour rebate to 20 percent (April to September) and 30 percent (October to March) from FY 2027-28. The point for a buyer is that the structure is explicit, seasonal, and moving.

How do solar hours change the payback?

Solar saves money at the rate of the block in which it generates. If the normal energy rate is 100 and the solar-hour rate is 80, a plant whose output falls entirely in solar hours avoids 80 per unit, not 100. Capital cost does not change, so payback lengthens by the ratio. The table is arithmetic on an index, not a quotation or a promise.

Two corrections stop this from being a straight penalty. First, a commission that discounts solar hours has to recover its revenue somewhere, so other hours may be priced higher and the flat tariff you compare against may no longer exist. Judge a plant against the new ToD bill, not the old flat one. Second, the rebate cuts what you pay for daytime grid units that solar does not replace, so a factory that runs its heaviest load by day gains on both sides of the meter.

How does net metering treat time-of-day blocks?

In many state rules, generation is set off against consumption block by block. The Chhattisgarh commission's regulations show the usual logic: consumption in any block is first compensated with generation in the same block; excess generation in a block is accounted as if it occurred in the immediately lower-priced block; and the process continues until consumption in lower-priced blocks is set off. Surplus beyond that is carried forward to the next billing cycle. The consequence is that daytime export cannot offset the evening peak at full value, so a plant sized well above your solar-hour load earns less on the extra units. Fixed and demand charges are not offset by units at all.

That is why a ToD-tariff factory should size solar against its solar-hour consumption, not its total consumption. Our guide to contract demand and ToD tariffs explains how billed demand behaves, and the guide to sizing solar against a factory electricity bill sets out the bill-reading steps.

How should you model it for your own bill?

1. Take twelve months of bills and, if you have a smart meter, the consumption by ToD block. The block data is on the bill or the DISCOM's consumer portal.
2. Find the energy rate for each block in the current tariff order, and note which charge the ToD factor applies to and whether the bill is in kWh or kVAh.
3. Estimate monthly generation by season using the solar calculator, and place it against the solar-hour consumption month by month.
4. Value self-consumed units at the solar-hour rate and exported units as your net-metering or captive rule requires.
5. Compare the result with capital cost in the solar payback calculator, using the solar-hour rate as the avoided rate.
6. Test the scenario in which the commission raises the peak surcharge or deepens the rebate. Tariffs reset every year.

If peak-hour surcharges are large, the next question is whether storage pays. A battery would shift solar energy from the cheap block to the peak, but the spread has to cover battery cost, conversion losses and cycle life, so model it before you add it. See our page on battery energy storage and the battery storage calculator. Load shifting, such as running furnaces, chillers or compressed-air plant in solar hours, costs less than a battery and often changes the answer more.

How Secured Engineers helps

We design commercial and industrial solar in-house and file DISCOM net-metering applications in-house, so the sizing is done against your ToD block data rather than a flat tariff. Solar, electrical and fire work can sit under one contract. We work from offices in Noida (Delhi NCR) and Ludhiana, with 535+ projects across 18+ states and 89.77% repeat clients. Our published rooftop C&I band is ₹24,000–32,000 per kW excluding GST; the ToD effect changes the saving, not the capital cost.

Send twelve months of bills, with the ToD block split if you have it, and we will size the plant against your solar-hour load and show the payback both ways. See our solar EPC service, message us on WhatsApp, call +91 70099 85817, or ask for a free proposal.