Energy and electricity experts agree on the feasibility of time-based tariffs as an option to enable residential subscribers to achieve savings on their electricity bills by reorganizing their consumption and taking advantage of price differences between peak and off-peak hours.
Time-based tariffs mean enabling the consumer to control the pattern and times of their electricity consumption, allowing them to benefit from reduced prices during off-peak periods, i.e., when energy demand is lower compared to peak hours, and the tariff is lower than peak times.
A government source had previously revealed the possibility of implementing time-based tariffs in the residential sector after the completion of replacing traditional meters with smart ones throughout the Kingdom, noting that 95% of the meters have been replaced.
Technical and economic feasibility of the system
In this regard, Dr. Ahmed Al-Salaymeh, a faculty member at the University of Jordan, confirmed that applying the time-related electricity tariff to the residential sector has clear technical and economic benefits, whether at the level of electricity companies and the National Electricity Transmission Company, or at the level of the consumers themselves.
Al-Salaymeh explained that the economic feasibility of this system is directly reflected in the efficiency of operating the electrical grid, especially in light of the expansion in the installation of smart meters in most homes, as these meters represent the basic infrastructure for the application of time-related tariffs, as they allow for accurate measurement of consumption according to different time periods, which enables the concerned authorities to manage loads more effectively.
He pointed out that one of the most important benefits of time-related tariffs is reducing the long-term cost of the electricity system, as it contributes to reducing the need to operate power generation plants for short periods during peak times.
He pointed out that operating the stations during these limited periods increases the cost of electricity production, and may also impose additional investments in the construction or operation of new stations that only operate for a few hours a year.
He explained that transferring part of the electrical loads to off-peak periods reduces these problems and decreases the need to operate additional stations or invest in new generation capacities dedicated solely to peak periods, which ultimately reflects on the overall production cost of the electrical system.
He stressed that the successful implementation of this system requires, in addition to technical readiness, a response from citizens through awareness and education campaigns that explain the new tariff mechanism and the best ways to benefit from it. He also pointed out the importance of the data provided by smart meters, not only in calculating bills, but also in supporting future predictions of the loads and consumption of the electrical system, which enhances the efficiency of planning and energy management in the Kingdom.
The residential sector is currently subject to a subsidized tariff divided into three tiers, with a different price for each tier. These are: from 1-300 kWh at a price of 50 fils per kWh, from 301-600 kWh at a price of 100 fils per kWh, and more than 600 kWh at a price of 200 fils per kWh. These are the tiers that can benefit from the subsidy.
This tariff includes providing additional direct support that the subscriber receives automatically if he is entitled to support, and it is deducted directly from his monthly bill at a rate of 2.5 dinars for subscribers whose total consumption ranges between 51–200 kilowatt-hours per month, or 2 dinars for those whose total consumption ranges between 201–600 kilowatt-hours per month, to ensure that the impact of the tariff on monthly bills is neutralized. Subscriptions for service meters for the residential sector (residential buildings) are excluded from this support.
Smart meters are a prerequisite for implementation
For his part, the former Director General of the National Electricity Company, Eng. Abdul Fattah Al-Daradkeh, confirmed that the application of the time-related electricity tariff system to residential and regular subscribers cannot be done before the installation of smart meters for all subscribers is completed, as they are the basic pillar for implementing this system accurately and fairly.
Al-Daradkeh explained that electricity distribution companies were scheduled to complete the installation of smart meters by the end of 2025, in preparation for the issuance of new instructions by the Energy and Minerals Regulatory Commission specifying the time tariff values for the residential sector, which are expected to be similar to or identical to the time periods currently approved for non-residential sectors.
He pointed out that adopting a time-related tariff transfers an important part of the decision to the consumer himself, as he can choose the most suitable period for his electricity consumption, whether to operate devices with high loads or to regulate daily usage patterns, thus achieving cost savings and giving him greater ability to manage his bill.
Al-Daradkeh added that the time-linked tariff represents a shift in the philosophy of electricity pricing, as it moves from a fixed tariff model to a more flexible model that reflects the actual cost of production during the hours of the day.
He stressed that this approach enhances operational efficiency, supports the integration of renewable energy into the energy mix, and gives the consumer an active role in managing their consumption, thus serving both economic and environmental sustainability.
The electrical grid between peak and load management
For his part, energy expert Dr. Firas Blasma pointed out that the time-based tariff is primarily aimed at redistributing electrical loads throughout the day, noting that the evening peak hours in Jordan, which extend approximately between six and ten o'clock in the evening, witness a sharp increase in loads as a result of the simultaneous use of household appliances.
He explained that if it were possible to convince between 15% and 20% of subscribers to move their unnecessary consumption – such as running water heaters, washing machines, or charging electric vehicles – to after midnight, this could reduce peak load by hundreds of megawatts, allowing for the postponement of investments of hundreds of millions in building new power plants or expanding networks.
He pointed out that the success of this system from an engineering perspective is conditional on the availability of three main elements, which are the spread of smart meters within an advanced measurement infrastructure, the ability to calculate consumption on the basis of half an hour or an hour at most, in addition to the existence of an advanced billing system capable of accurately calculating time segments, stressing that the absence of smart meters on a wide scale makes the application formal or unfair among subscribers.
He pointed out that the time tariff may encourage increased consumption during midday hours, which is positive from the perspective of absorbing renewable energy, but its impact will remain limited in the absence of storage solutions, whether through grid-level batteries or at the home level.
Blasma stressed the need for its social design to be thoughtfully considered so that it does not turn into a “popular shock”, emphasizing that the tool itself is not a means to raise prices, but rather to manage the loads.
Al-Ghad – Reham Zeidan