How To Reduce Electricity Bill In India? A Step-By-Step Guide

Why Is My Electricity Bill So High? 

You check your electricity bill online and find that you need to pay a higher amount this time.

Or, once you check the electricity bill after logging into your discom portal, you find that the electricity bill has been rising consistently for the last couple of months.

Before you figure out why the electricity bill is so high, you need to understand how it is calculated. 

How Is The Electricity Bill Calculated? 

Electricity Bill = (Units Consumed x Slab Rates) + Fixed Charges, Duty, and Adjustments. 

You can control the unit consumption and partly the fixed charge part. 

So, once you receive the electricity bill, find out the biggest reason behind your electricity bill shooting up. 

If your house has an air conditioner, it is the biggest lever. 

Also, if your house does not have an air conditioner, check how geysers, old fans, or lights are adding up to the bill. 

What Is A Slab Rate?

A slab rate is a tiered or telescopic pricing system used by electricity boards. 

Instead of multiplying your entire power usage by a single flat rate, your total consumption is split into brackets (slabs).

Each bracket is billed at a progressively higher per-unit rate. 

This keeps basic electricity affordable for low-use households while charging higher rates to heavy energy users. 

For example, the West Bengal State Electricity Distribution Company Limited has divided the slabs into two categories. 

The first category is for low and medium voltage consumers, and the second category is for high and extra high voltage consumers. 

These two categories are further divided into multiple sub-categories. 

Which Appliances Usually Use The Most Power?

Cooling and heating appliances usually use the most power. These include:

• Air Conditioners
• Room Heaters
• Water Geysers.

Also, the refrigerators in our house usually run for the entire day. 

However, there can be instances when the number of units consumed has gone down, but the bill has increased. 

Then, the fixed charge or an adjustment line is the reason, and you should read the bill line by line.

How Much Can You Save On Air Conditioning? 

The Bureau of Energy Efficiency (BEE) says that you can save around 6% of power if you raise the AC setting by one degree. 

Also, suppose you are moving your AC setting from 20°C to 24°C. You can save around 24% of power consumption.

A Ministry of Power notification also requires star-labelled room ACs sold in India to default to 24°C from 1 January 2020.

The notification says,

What Is A Sensible Cooling Routine? 

• Set the air conditioner in your room at 24°C or above and use a ceiling fan to spread the cool air. 

• Get the filters of your air conditioner cleaned regularly, as clogged filters put extra pressure on the compressor. 

• Keep the windows and doors shut when the AC is on. 

• Use a timer or put the AC on sleep mode instead of leaving it on for the entire night. 

Do Star-Rated Appliances Really Lower The Bill?

Yes, star-rated appliances really reduce the electricity bill. 

The BEE star label rates appliances on efficiency.

So, an appliance with a higher star rating is more efficient, and it offers the same output using less energy. 

So, compare the label’s energy figure, not just the price, while buying an appliance. 

A cheaper low-star unit can cost more over its lifetime.

Which Replacements Pay Back First?

LED lighting is the fastest and easiest replacement if you want to know how to reduce your electricity bill. 

Furthermore, you can replace the old ceiling fans with energy-efficient ones. 

Moreover, replace an old refrigerator or AC when it fails or when your usage is heavy, and buy the highest star rating you can afford.

Can A Time Of Day Tariff Lower Your Bill?

Yes, a Time of Day Tariff can lower your electricity bill. 

Under the Electricity (Rights of Consumers) Amendment Rules, 2023, Time of Day (ToD) tariffs apply to smart-metered consumers and it was effective from 1st April 2024.

Also, for other non-agricultural consumers, it was to be applicable no later than 1 April 2025. 

Solar-hour tariffs must be at least 20% below the normal tariff.

At the same time, peak tariffs must be at least 1.10 times normal for most consumers and 1.20 times for commercial and industrial users. 

ToD applies to the energy charge.

So, you can reduce your electricity consumption and bill by shifting to solar energy use during peak hours. 

How Do You Use The Time Of Day Tariffs? 

You can use the Time of Day (ToD) tariffs by running the washing machine, water pump, and geyser during your state’s notified solar hours.

However, implementation differs by state, and you can get clarity on it.

So, confirm timings on your discom’s website.

A comparison of the Time of Day Tariff hours in West Bengal and Mumbai will give you a clear picture.

Time of Day Hours	West Bengal	Maharashtra
Normal Hours	6 AM to 5 PM	12 AM to 9 AM
Peak Hours	5 PM to 11 PM	5 PM to 12 AM
Off Peak/Night Hours	11 PM to 6 AM	9 AM to 5 PM

Should You Review Your Sanctioned Load And Meter? 

Yes, you should review your sanctioned load and meter if you want to reduce your electricity bill. 

Remember that the fixed or demand charges depend on the sanctioned load. 

So, if your connection sanctions a larger number than you actually need, you will end up paying more unnecessarily. 

You must then ask your distribution company to reduce the sanctioned load. 

At the same time, after the 2023 amendments, you will be notified by an app or SMS if your actual demand is more than the sanctioned load. 

And the billing will be done based on the actual load. 

However, there will be no penalty for the period before installation. 

The 2020 Rules provide for meter testing and replacement of defective meters.

What Small Habits Still Add Up?

Small habits such as switching off lights and fans in empty rooms really help in reducing the electricity bill. 

Furthermore, you can unplug chargers, run washing machines on full loads, and dry clothes in the Sun.

These changes or habits do not cost you anything, but you can see the effect in the next bill. 

Is Rooftop Solar The Biggest Long-Term Saver?

Yes, rooftop solar is one of the most effective long-term savings plans for property owners. 

PM Surya Ghar: Muft Bijli Yojana aims to provide up to 300 units of free electricity a month to one crore households. 

Central assistance is ₹30,000 for a 1 kW system, ₹60,000 for 2 kW, and ₹78,000 for 3 kW or more, with collateral-free loans at around 7%. 

A 3 kW system can generate over 300 units a month on average. 

You can register at pmsuryaghar.gov.in.

Who Should Wait For The Solar Installation?

If you are a tenant or your house has a heavily shaded roof, you must check feasibility before choosing a solar installation. 

Solar suits owners with a sunny, unshaded roof and steady daytime consumption.

What Are The Exact Steps At A Glance?

Step	Action	Expected benefit
1	Read your last three bills. Note units and the biggest appliance.	Shows where savings are possible.
2	Set AC to 24°C or above. Clean filters monthly.	About 6% power saving per degree (BEE).
3	Replace old bulbs with LEDs. Buy star-labelled appliances.	Lower units for the same use.
4	Ask your discom about Time of Day tariff. Shift loads to solar hours.	Cheaper energy charge in solar hours.
5	Review sanctioned load against actual need.	Lower fixed or demand charge.
6	Check solar eligibility at pmsuryaghar.gov.in.	Subsidy up to ₹78,000 and lower bills.

How To Reduce Electricity Bill? Frequently Asked Questions (FAQs)

Here are the frequently asked questions and answers about how to reduce electricity bills. 

1. Does Switching Off The Wi-Fi Router Save Money? 

Yes, you can save a little amount of power consumption by switching off the Wi-Fi router. 

While this is a good practice, the power consumption you save is small because usually the monthly energy consumption of a router in a home is between 5 and 20 watts. 

So, if you want to save money, you must regulate the use of geysers, refrigerators, and ACs first. 

2. Is 24°C Really The Best AC Setting? 

The Bureau of Energy Efficiency (BEE) says that 24°C is the best air conditioner setting. 

Also, if you raise the temperature of your AC by 1 degree, you save around 4% power. 

By that logic alone, you can save 24% power when you raise the AC temperature from 20°C to 24°C.

3. Do Star Ratings Matter For Fans And Lights? 

Yes, star ratings matter for fans and lights. 

BEE labels models and awards stars based on efficiency. 

Higher efficiency means the consumption of less electricity for the same performance. 

4. What Is A Time Of Day Tariff?

A time-of-day tariff (ToD) is a tariff with different energy rates for peak, normal, and solar hours. 

You can plan the energy usage of your domestic or commercial space around the time-of-day tariff hours to reduce electricity bills. 

5. Can I Reduce My Sanctioned Load?

Yes, you can reduce the sanctioned load of electricity use by getting in touch with your distribution company. 

Remember that the fixed charges and demand charges depend on the sanctioned load. 

So, if your energy consumption is consistently below the sanctioned load, you will be paying higher prices unnecessarily. 

6. Who Can Apply For PM Surya Ghar?

You can apply for the PM Surya Ghar Scheme if you have a valid electricity connection and a suitable rooftop. 

However, it may not be suitable for tenants and people with shaded roofs. 

7. Will A Smart Meter Raise My Bill?

A smart meter does not raise the electricity bill. 

However, a smart meter records the actual usage in comparison to the previous reading system, which used to under-record your power consumption. 

You will not have to pay the penalty for the lower tariff you paid before the installation of the smart meter. 

Still, you can ask for a meter test if you doubt the readings.