What Is ToD Tariff? How Time-of-Day Tariffs Work with Solar & Battery Storage

Time-of-Day (ToD) Tariff:

Time-of-Day (ToD) tariff is an electricity pricing system in which the cost of power changes depending on when it is used.

Electricity is generally:

Cheapest during off-peak hours, usually late at night.
Priced normally during daytime hours.

Most expensive during peak hours, typically in the evening when demand is highest.

How ToD Tariff Works

Electricity consumption is recorded separately for each time block through a smart or ToD meter. The bill is then calculated using the applicable rate for each period.

A typical schedule may be:

Time period	Typical timing	Tariff
Off-peak	10 PM–6 AM	Lowest
Normal	6 AM–6 PM	Standard
Peak	6 PM–10 PM	Highest

Actual timings and rates vary by state and electricity distribution company.

Why ToD Matters for Solar

Solar panels generate the most power during the daytime, when tariffs are usually normal. However, businesses often consume more power during evening peak hours, when rates are higher.

A battery energy storage system solves this gap:

Solar power charges the battery during the day.
The battery stores the energy.
Stored energy is used during expensive evening peak hours.
The consumer reduces high-cost grid consumption.

This makes solar-plus-battery systems more valuable than solar alone for businesses with substantial evening usage.

Key Benefits

Reduces electricity bills by shifting usage to cheaper hours.
Lowers peak demand and demand charges.
Improves the financial return from battery storage.
Supports better use of rooftop solar energy.
Helps stabilise the electricity grid.
Encourages energy-efficient and flexible operations.
Makes EV charging and industrial load scheduling more economical.

Example

If daytime electricity costs ₹8 per kWh and evening peak electricity costs ₹12 per kWh, solar used directly during the day saves ₹8 per kWh.

If the same solar energy is stored in a battery and used during peak hours, it can avoid the ₹12 per kWh rate—creating significantly greater savings, after accounting for battery losses.

Who Can Benefit Most?

ToD tariffs are especially useful for:

Manufacturing units with evening or night shifts.
Commercial buildings, malls and hotels.
Data centres and large offices.
EV charging stations and fleet operators.
Homes with rooftop solar and battery storage.
Facilities that can move energy-intensive operations to off-peak hours.

Important Considerations

ToD tariffs differ across states and DISCOMs. Businesses should check:

Applicable peak and off-peak timings.
Energy and demand charges.
Smart-meter requirements.
Net-metering rules.
Battery efficiency and operating costs.
The latest state electricity tariff order.

Frequently Asked Questions

What is ToD tariff?

ToD, or Time of Day tariff, is an electricity pricing system where the tariff changes according to the time electricity is consumed.

What are peak and off-peak hours?

Peak hours are periods of higher electricity demand and generally higher tariffs. Off-peak hours have lower demand and typically lower tariffs. Exact timings vary by DISCOM.

Can solar reduce ToD electricity costs?

Yes. Solar can reduce daytime grid consumption. However, because solar generation is primarily during the day, battery storage may be needed to shift solar energy into evening peak periods.

How does a battery help with ToD tariffs?

A battery can store energy during lower-cost or solar-generation periods and discharge it during higher-cost peak periods.

Does ToD tariff apply across India?

ToD implementation and tariff structures vary by state, DISCOM, and consumer category. Always check the latest applicable tariff order.

Conclusion

ToD tariffs reward consumers who use electricity at the right time. By combining flexible energy usage, rooftop solar and battery storage, commercial and industrial consumers can reduce peak-hour costs, improve energy efficiency and achieve better long-term savings.

Feston SEV