Tariff Structures for Residential Electricity Consumption in India: an Analysis of Disparities and Effect on Consumption

Residential electricity consumption in India constitutes about 25% of the total electricity consumption and is poised to grow significantly in the coming decades. Electricity tariff is one of the many factors affecting residential electricity consumption. This paper examines the process of setting of the residential tariff structures in different states of India by respective agencies. Data from regulatory bodies are used to compare the tariff structures of different states and bring out significant differences. Further, the affordability of electricity in different states is compared using different levels of average household electricity consumption. The results indicate that states like Rajasthan have very high electricity tariff, which hampers the affordability of electricity, especially for the lower social strata. The Indian states have been divided into various ranges of tariff and consumption which shows the relationship between tariff structure and residential electricity consumption.