Uttarakhand Proposes Solar-Based Time Of Day Tariff To Promote Renewable Energy And Manage Peak Demand

The Uttarakhand Electricity Regulatory Commission (UERC) has released a concept paper aimed at overhauling the state’s Time of Day (ToD) electricity tariff system. The move is designed to bring the tariff structure in line with the Ministry of Power’s Electricity (Rights of Consumers) Amendment Rules, 2023. A key goal of the proposal is to encourage the use of solar power while managing electricity demand more effectively across the state. The Commission plans to introduce a new system that distinguishes between “Solar Hours” and “Non-Solar Hours,” making the tariff structure more responsive to the availability of solar energy.

Under the proposed rules, eight hours each day would be designated as solar hours. During these hours, consumers would be eligible for a minimum tariff rebate of 20%. This measure is intended to incentivize electricity consumption when solar generation is at its peak. On the other hand, commercial and industrial consumers will face higher charges during peak periods. The concept paper proposes that surcharges for these consumers should be at least 1.20 times the normal rate, while other categories of consumers would be charged at least 1.10 times the standard rate. These changes are expected to take effect for large commercial and industrial consumers with connected loads above 10 kW by April 2024. For most other consumer categories, the new tariff system is likely to be implemented by April 2025.

The successful implementation of this new regime depends heavily on the installation of smart meters across the state. Uttarakhand Power Corporation Limited (UPCL) began installing smart meters in August 2024. The plan is to complete the installations for high-tension industrial users by June 2025 and for low-tension industrial users by August 2025. Until sufficient consumption data from these meters is available, the Commission has decided to maintain the existing peak and off-peak structure. Currently, off-peak hours provide a 25% rebate, while peak hours carry a 30% surcharge. This interim arrangement will remain in place to ensure that the transition to the new ToD system is based on accurate and comprehensive data.

Analysis of the state’s load curves indicates clear seasonal patterns in electricity demand. In winter, morning and evening peaks are more prominent, with the morning peak often being higher than the evening one. During the summer months, the evening peak can extend late into the night, sometimes until 2:00 AM. Given these patterns, the Commission has rejected suggestions from stakeholders to remove the morning peak, stating that such a change would compromise effective demand-side management.

To make the new policy more effective and practical, UERC is seeking feedback from stakeholders on several key issues. The Commission is inviting suggestions on whether solar hours should remain the same throughout the year or vary with the seasons, whether the proposed 20% rebate is adequate, and whether peak and off-peak rates should be symmetrical. Stakeholders have been asked to submit their feedback by January 31, 2026. This consultation process is an important step as Uttarakhand moves toward a more solar-integrated and data-driven electricity grid, aiming to balance energy efficiency with the promotion of renewable energy.

The initiative marks a significant step in modernizing the state’s electricity tariff system and reflects a broader effort to encourage renewable energy adoption while maintaining efficient grid management. With smart meters playing a key role in monitoring consumption and guiding tariff adjustments, the new ToD system is expected to bring more flexibility and transparency to electricity pricing in Uttarakhand.