Time-of-day tariffs: when running an AC gets cheaper in India
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For most of the history of Indian domestic electricity there was one number on the bill that mattered: units consumed. The meter counted, the slab decided the rate, and the hour at which the compressor ran was nobody’s business. That is changing. The Ministry of Power amended the Electricity (Rights of Consumers) Rules in June 2023 to introduce Time of Day tariffs, and the same kilowatt-hour now costs different amounts depending on when it crosses the meter. For an appliance that runs almost entirely in one window of the day, that deserves both explaining and deflating — the effect on a bedroom air conditioner is smaller than the headlines suggested.
What the rules actually require
The framework sets floors rather than fixed prices, and leaves the real numbers to each State Electricity Regulatory Commission. The shape of it:
- Solar hours are a block of eight hours in the day, specified by the State Commission. During them the tariff is set below the normal rate — at least 20 % below for commercial and industrial consumers, and at least 10 % below for everyone else.
- Peak hours are notified by the State Commission or the State Load Despatch Centre and may not exceed the duration of the solar-hours block. During them the tariff rises: not less than 1.20 times the normal rate for commercial and industrial consumers, and not less than 1.10 times for other consumers, households included.
- Timing. Commercial and industrial consumers with a maximum demand of 10 kW and above came first, from 1 April 2024. Other consumers other than agricultural were to follow no later than 1 April 2025 — and for anyone who already has a smart meter, ToD applies as soon as that meter is installed.
Two consequences follow immediately. The windows are not national: your state decides when solar hours start and when the evening peak bites, and the only authoritative document is your discom’s current tariff order. And the percentages are minimums, so a state may go further in either direction.
The smart meter is the gate
A discom cannot bill by time of day with a meter that only records a cumulative total. ToD requires an interval-recording smart meter, and the rollout across India is uneven — some circles are largely converted, others barely begun. If your bill shows a single consumption figure and a slab table with no time blocks, ToD is not being applied to you yet, whatever the news says about the deadline. When it does arrive, the bill grows a section listing units by slot; that section, not an app estimate, is the thing to read.
What it does to an air conditioner, in numbers
Take a correctly sized 1.5-ton inverter split averaging about 1.0 kWh per running hour, at an illustrative normal rate of ₹7 per unit — an ordinary upper-slab figure across Indian discoms, though rates vary widely by state and slab.
| Window | Illustrative rate | Cost per running hour |
|---|---|---|
| Solar hours (a daytime block, roughly 09:00–17:00 in many orders) | ₹6.30 (10 % below normal) | about ₹6.30 |
| Normal hours | ₹7.00 | about ₹7.00 |
| Peak hours (commonly an evening block) | ₹7.70 (1.10 × normal) | about ₹7.70 |
The spread between the cheapest and dearest hour is about ₹1.40. Over a heavy summer month — say 120 running hours — moving every single one of those hours from peak to solar hours would save on the order of ₹170. That is a real number and a small one, and it is the honest headline of this subject: for a household, ToD changes the cost of cooling by a few percent, not by a third. What it changes materially is the economics of anything that can genuinely be moved, and of rooftop solar.
Why the bedroom AC barely moves
Household cooling in India happens when people are home and trying to sleep, which in most states is precisely the notified evening peak. You cannot shift sleep, and the pre-cooling trick that works in insulated buildings elsewhere works poorly here: an uninsulated RCC slab that has absorbed sun all day re-radiates heat into the room for hours after sunset, so cooling the room at 15:00 buys almost nothing at 23:00. Top-floor flats are the extreme case and also the place where the envelope, not the tariff, is the lever worth pulling — see our guide to cooling a top-floor flat in India.
What genuinely shifts, and is worth shifting once you are on a ToD tariff:
- The geyser, which is the second-largest resistive load in most homes and is entirely a matter of timer settings.
- Washing machine, dishwasher and iron — an hour’s delay start moves the whole cycle out of peak.
- Water pump filling an overhead tank, which can run at any hour the building allows.
- EV charging, where the shift is worth more than everything else on this list combined.
- Daytime cooling for anyone working from home: that load already sits in solar hours and now costs less than it did.
Where ToD genuinely pays: rooftop solar
A rooftop array produces exactly during the solar-hours block, which is not a coincidence — the block is defined around it. The pairing that pays best is self-consumption: running the daytime cooling load off your own generation, in the room you actually occupy in daylight, is worth more than exporting the same units under most state net-metering formulas.
There is a nuance worth knowing before anyone sizes a system on the back of a ToD announcement. If the solar-hour tariff sits 10 to 20 % below normal, every unit you self-consume in that block displaces a cheaper unit than it used to — so the value of daytime self-consumption falls slightly, even as the value of avoiding peak imports rises. Battery storage converts that difference into money, and it remains expensive enough that it rarely pays for itself on tariff arbitrage alone in an Indian home. The fuller picture is in our guide to running an AC on solar panels in India.
The slab still costs you more than the clock
Keep the two mechanisms in the right order. Indian domestic tariffs are banded, and an air conditioner is the appliance that pushes a household from a cheap slab into an expensive one — a jump that can be worth rupees per unit on the marginal consumption. ToD moves the rate by tens of paise. Reducing units therefore outranks rescheduling them, every time: correct tonnage, a sane setpoint, a clean filter, shading on the west wall. Only once those are done does the clock become worth optimising. The unit-by-unit arithmetic is in our guide to what an AC really adds to an Indian electricity bill.
A short checklist
- Look for a ToD or time-slot block on your latest bill; if there is none, you are not on it yet.
- Find your discom’s tariff order and note the two windows — they are the only numbers that apply to you.
- Move the geyser, the pump and the laundry out of the peak block first. They cost nothing to move.
- Leave the AC where your life puts it, and spend the effort on units rather than hours.
Frequently asked questions
How do I know whether ToD applies to me?
Two conditions must both hold: your state commission has notified ToD windows for domestic consumers, and you have a smart meter capable of recording consumption by interval. The bill settles it — a ToD consumer sees units broken out by time block, not one cumulative figure against a slab table.
Should I run the AC in the afternoon because it is cheaper then?
Only if you are in the room. A discount of a few tens of paise per unit never justifies running a compressor for comfort nobody is receiving; the cheapest kilowatt-hour is still the one that is not consumed. The rule is that ToD should change when you run loads you were going to run anyway, never whether you run them.
Does pre-cooling before the peak window work?
Rarely, in Indian construction. Concrete slabs and uninsulated walls that have been heated all day keep releasing that heat into the evening, so a room chilled in the afternoon is back to where it started long before the peak block ends. In a well-insulated house with heavy internal mass the trick has some merit; in a typical Indian flat it mostly buys extra running hours.
Does a ToD tariff change whether an inverter AC is worth the premium?
Not meaningfully. An inverter earns its premium on units consumed, and that logic is identical under any tariff structure. What ToD does add is a small extra reward for the long, low-power steady running that an inverter is good at, if any of it happens during solar hours.
Can peak rates be higher than 1.10 times the normal tariff?
Yes. The rules set a floor, not a ceiling, and a state commission is free to notify a wider spread — as several have for commercial consumers. This is why quoting a national figure for peak-hour cost is meaningless, and why the tariff order for your own discom is the document to read.