Time-of-day tariffToD

The day is split into periods, commonly peak, normal and off-peak, each with its own energy rate. Some tariffs express this as a multiplier on the normal rate, for example 1.2 times in the evening peak and 0.8 times in solar hours. The energy part of the bill becomes Σ e_p × E_p, where p runs over the periods, e_p is the rate in period p and E_p the energy used in that period. The periods can change with the season and between weekdays and weekends. Billing it needs a meter that records each block.

Older designs made night-time the cheapest period. As solar has grown, many have moved the cheap window to the middle of the day and the peak to the evening. For a battery, the margin on each MWh discharged is m = e_peak − e_off / η. Here e_peak is the rate avoided when discharging, e_off the rate paid when charging, and η the round-trip efficiency. Dividing by η accounts for the extra energy that goes in compared with what comes out. The battery is worth cycling only when m exceeds its degradation and operating cost per MWh.

For an industrial buyer, ToD rates decide when flexible processes should run and whether a battery behind the meter pays. They also change the value of renewable supply. Solar that arrives in cheap midday hours saves less per MWh than the average tariff suggests. Developers selling storage or round-the-clock supply to industry build their offer around the gap between peak and off-peak rates. A regulator moving the peak window can change a battery's case in a single tariff order.

In India, central rules issued in 2023 require ToD tariffs for commercial and industrial consumers, with cheaper solar hours and dearer peak hours, and state regulators set the windows and rates. In the US, many utilities offer time-of-use rates, and California has moved most homes onto them by default, with an evening peak. In Europe, EU rules require larger suppliers to offer dynamic contracts that follow hourly wholesale prices, a finer form of the same idea.