India's Time-of-Day tariff explained: what the 2026 draft rules change

In 50 words: Time-of-Day tariffs price electricity by the hour: costlier at the evening peak, cheaper during solar hours. India's 2023 rules set peak rates about 20% above normal and solar-hour rates about 20% below. A March 2026 draft amendment revises the peak multipliers to 1.2x for large users, pushes deadlines to 2027-28, and links ToD to demand response and storage.

For a century, most Indian consumers paid a single flat rate for electricity no matter when they used it — the same price for a fan at 2 PM, when solar floods the grid, as for an air-conditioner at 10 PM, when the grid is scrambling to keep up. That model is ending. Time-of-Day (ToD) tariffs make the price of a unit depend on the hour it is consumed, nudging demand away from the stressed evening peak and toward the cheap, sunny middle of the day. The Ministry of Power set the framework in 2023, and a fresh draft amendment in March 2026 rewrites the details. This explainer covers what ToD is, exactly what the 2023 rules and the 2026 draft say, who is affected and when, and — most usefully for readers — how ToD changes the maths on rooftop solar and home batteries.

What a Time-of-Day tariff actually is
The 2023 rules: the baseline every state inherits
The March 2026 draft amendment: what changes
Rollout timeline and the smart-meter dependency
What ToD does to rooftop-solar and battery economics
State by state: why your bill differs
Frequently asked questions
What to watch next

1. What a Time-of-Day tariff actually is

Under a flat tariff, a unit of electricity costs the same at every hour. Under a ToD tariff, the day is divided into blocks — typically a peak block (the high-demand evening and sometimes morning hours), a normal block, and a solar block (the daytime hours when solar generation is abundant). Each block carries a different per-unit price: highest at peak, lowest during solar hours.

The purpose is not to raise revenue but to reshape demand. If evening power is expensive and midday power is cheap, consumers with any flexibility — running a water pump, charging an EV, pre-cooling a building, heating water — have a reason to shift that load into the cheap hours. At national scale, flattening the evening peak reduces the need to fire up costly peaking plants and, increasingly, reduces the amount of battery storage the grid must build to survive the post-sunset ramp. ToD is, in effect, a price signal that asks consumers to help balance a grid that is becoming solar-heavy by day and supply-tight by night.

2. The 2023 rules: the baseline every state inherits

India's ToD framework was set by the Electricity (Rights of Consumers) Amendment Rules notified on 14 June 2023. Their core numbers became the template every State Electricity Regulatory Commission (SERC) works from:

Peak hours: tariff at least 20% higher than the normal rate for commercial and industrial (C&I) consumers, and at least 10% higher for other consumers.
Solar hours: tariff at least 20% lower than normal, applied during a solar window of eight hours in the day, with the exact hours fixed by each state's regulator.
Coverage: mandatory for C&I consumers with maximum demand of 10 kW and above from 1 April 2024, and for most other consumers (agriculture excluded) from 1 April 2025.

In practice, implementation has been uneven. Many states folded ToD into commercial and industrial tariffs on schedule, but the extension to households and small businesses stalled, because it depends on smart meters that can record consumption by time block — infrastructure many discoms are still rolling out. That gap between rule and reality is exactly what the 2026 draft tries to fix.

3. The March 2026 draft amendment: what changes

On 12 March 2026 the Ministry of Power released a draft amendment to the Electricity (Rights of Consumers) Rules, inviting stakeholder comments by 11 April 2026 and proposing an effective date of 1 October 2026. It is a proposal, not final law, but it signals the direction clearly. The key changes:

| Provision | 2023 rules | 2026 draft | |---|---|---| | Peak multiplier, C&I | At least 20% higher | At least 1.2x the normal tariff | | Peak multiplier, others | At least 10% higher | At least 1.1x the normal tariff | | Solar-hour discount | At least 20% lower | At least 20% lower (retained) | | C&I deadline (>10 kW) | 1 April 2024 | 1 April 2027 | | Other consumers deadline | 1 April 2025 | 1 April 2028 | | Demand response | Not specified | New demand response framework | | Storage for large solar | Not specified | BESS may be mandated for RE systems above 500 kW |

Three shifts stand out. First, the amendment resets the deadlines to 2027 and 2028, an implicit admission that the 2024-25 dates were missed and that ToD for ordinary consumers moves at the speed of the smart-meter rollout. Second, it introduces a formal demand response framework — allowing discoms to pay or reward consumers for cutting load during peak stress, a step beyond passive time-based pricing. Third, on the solar side, it proposes net-metering up to 500 kW, signals that systems above 5 kW could attract net-metering charges reflecting storage and network costs, and floats a requirement that renewable installations above 500 kW install their own battery storage — tightening the link between solar, storage and the grid's timing needs.

4. Rollout timeline and the smart-meter dependency

ToD is only enforceable if the meter can tell what was consumed in each time block. A conventional meter records a single cumulative number; it cannot distinguish a peak-hour unit from a solar-hour unit. That is why the entire ToD schedule is chained to India's smart-meter programme.

The revised deadlines — 1 April 2027 for C&I consumers above 10 kW and 1 April 2028 for other non-agricultural consumers — are best read as targets contingent on smart-meter coverage reaching those consumer segments. States that have advanced their smart-meter deployment can implement ToD sooner and more widely; states that are behind will apply it first to large, already-metered industrial users and extend it to households only as smart meters arrive. For most residential consumers, the practical trigger is simple: ToD billing becomes real when a smart meter is installed at the premises.

5. What ToD does to rooftop-solar and battery economics

For anyone weighing rooftop solar or a home battery, ToD changes the arithmetic in three ways.

It lowers the value of raw daytime solar export. Under a flat tariff plus net metering, every exported unit was worth the retail rate. Under ToD, solar is generated precisely during the solar block, when the price is at its lowest — so the credit for exported daytime power is worth less than it used to be. The 2026 draft's signal that large systems may face net-metering charges reinforces this: exporting midday surplus becomes a weaker proposition.

It raises the value of shifting solar into the evening — which means batteries. The flip side is that the expensive block is the evening peak. A household or business that can store its midday solar and discharge it during the peak captures the full peak-minus-solar spread on every stored unit. ToD is, in effect, the price signal that makes home and commercial battery storage economically rational rather than merely resilient. A hybrid solar-plus-battery system charged by day and discharged at the evening peak is the configuration ToD rewards.

It rewards load-shifting even without a battery. The cheapest response to ToD is behavioural and costs nothing: run the washing machine, dishwasher, water pump, water heater and EV charger during the low-priced solar hours rather than the peak. For a C&I consumer facing a 1.2x peak multiplier, shifting flexible process load out of the peak block can cut the energy bill materially with no capital outlay at all.

The practical takeaway: under ToD, the economic centre of gravity for solar moves from "export as much as possible" toward "self-consume and time-shift" — and that shift is what pulls storage into residential and commercial projects.

6. State by state: why your bill differs

Although the Ministry of Power sets the national framework, the actual tariff blocks, hours and rates are fixed by each state's regulator. That is why ToD looks different across India. Some states have defined their solar window and peak hours and folded ToD into C&I tariffs; others are still consulting. Maharashtra, for instance, has been among the states actively revising its ToD structure, solar-hour definitions and the associated net-metering and energy-banking rules in its tariff orders. The upshot is that two identical rooftop systems in two states can earn very different returns depending on how wide the peak-to-solar price spread is and how the state treats banked and exported solar. Anyone sizing a system should check their own SERC's current ToD slabs rather than assume the national minimums.

7. Frequently asked questions

What is a Time-of-Day tariff?

It is an electricity tariff where the per-unit price depends on the time of consumption — higher during peak hours, lower during solar hours — to encourage consumers to shift usage away from the stressed evening peak.

What did India's 2023 ToD rules require?

The June 2023 rules set peak-hour tariffs at least 20% above normal for commercial and industrial consumers (10% for others) and solar-hour tariffs at least 20% below normal across an eight-hour solar window, with rollout from April 2024 for large C&I users and April 2025 for others.

What does the March 2026 draft change?

It expresses peak rates as multipliers (1.2x for C&I, 1.1x for others), pushes the mandatory deadlines to April 2027 and April 2028, adds a demand response framework, and links ToD to net-metering limits and possible storage mandates for solar systems above 500 kW. It is a draft, effective from 1 October 2026 if finalised.

When will ToD apply to my home?

For most households, ToD becomes billable once a smart meter is installed, since only a smart meter can record consumption by time block. The draft targets April 2028 for non-agricultural consumers, contingent on smart-meter coverage.

Does ToD make rooftop solar less worthwhile?

It reduces the value of exporting raw midday solar, because that power is generated during the cheapest hours. But it increases the value of storing solar for evening use — so ToD strengthens the case for solar-plus-battery systems and self-consumption over pure export.

Is agriculture covered by ToD?

No. Agricultural consumers are excluded from the mandatory ToD provisions in both the 2023 rules and the 2026 draft.

8. What to watch next

The first thing to watch is whether the March 2026 draft is notified as-is or softened after industry comments — particularly the proposed storage mandate and net-metering charges for larger solar systems, which the rooftop industry is likely to contest. The second is the pace of smart metering, because that, not the legal deadline, is the real gate on when ordinary consumers see ToD on their bills. The third is how state regulators set their spreads: a narrow peak-to-solar gap makes ToD a mild nudge, while a wide one makes battery storage and load-shifting genuinely lucrative. Taken together, ToD marks a structural shift in how India prices power — from a flat rate that ignored the grid's timing to a signal that pays consumers to help balance it. For solar and storage, that signal points in one direction: store the sun, and spend it at night.

This explainer was researched and drafted with AI assistance and edited by a named member of the Earth Energy Log editorial team. The 2023 rule figures and the March 2026 draft provisions are attributed to the Ministry of Power notifications and the trade and primary sources listed above; the 2026 amendment is a draft and its final form, multipliers and dates may change on notification. See our editorial standards and AI disclosure. Explore more on policy, solar and battery storage, and see our coverage of India in the regions hub.

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