What your bill tells you
- Energy charges follow the units you buy in kWh or kVAh. Demand charges depend on the grid capacity reserved for your connection.
- Solar used on site reduces daytime grid units and the energy charges tied to those units.
- A normal on-grid plant does not remove contracted demand charges. Battery controls may help with peaks, but the tariff still needs checking.
- On a kVAh bill, inspect your APFC equipment as well as the solar design. Poor power factor can reduce the value of the energy saved.
The amount payable is useful for accounts, but it is a poor starting point for sizing solar. A hospital, hotel, college or other commercial site pays for several things at once: units consumed, grid capacity, power quality and statutory levies. You need the separate lines to understand which cost a solar unit can avoid.
A rooftop plant mainly replaces grid electricity while it is generating. Your business still pays for services and capacity that remain connected. Separating those costs keeps the savings estimate realistic and helps you avoid a plant that is too small for your daytime load. Ask for the meter data as well as the bill if your demand changes sharply during a shift. Compare weekdays with weekends, note planned equipment additions, and mark any holiday shutdowns. These details show how much generation your site can use directly and how much may be exported at a different value.
Read the lines below alongside 12 months of your own bills. If you are also assessing a home, see our home solar options. Similar bill checks apply to retail premises and office buildings.
Find the key figures on a commercial bill
The layout differs across APSPDCL, BESCOM and TANGEDCO bills, but the same kinds of figures usually appear. Locate these fields before asking for a solar quotation:
- Consumer category and tariff code: This identifies LT or HT supply and the tariff applied. The APERC retail supply tariff order for FY 2026 to 2027, dated 25 March 2026, uses Category II(A) Commercial and Category III(A) Industry (General), with LT or HT billing according to supply voltage. Check the category printed on your own bill.
- Sanctioned load, in kW or HP: For an LT service, this is the maximum load the utility has approved.
- Contracted maximum demand, or CMD in kVA: For an HT service, this is the grid capacity reserved for your facility.
- Recorded maximum demand, or RMD: The meter's highest average demand over a 15 or 30-minute window in the billing period. Your bill may use this to set billed demand.
- Active energy, in kWh: The energy your equipment used to do work during the month.
- Apparent energy, in kVAh: The grid energy measure that includes the effects of active and reactive power, shown on tariffs that bill in kVAh.
- Average power factor, or PF: The ratio of active to apparent energy, kWh divided by kVAh. It shows how much reactive demand accompanies your useful power.
Rooftop capacity is often limited to about 80% to 100% of sanctioned load or CMD under the applicable rules. Treat that as a preliminary check. Ask the DISCOM to confirm the permitted size and transformer capacity for your connection.
Which bill charges can solar reduce?
Most C&I bills have a variable energy charge and a fixed or demand charge. Keep them separate in your savings model.
1. Energy charges for units used
The energy line charges for each kWh or kVAh bought from the grid. The illustrative commercial and industrial range here is ₹7.00 to ₹10.50 or more per unit; use the current tariff order and your own bill for the actual rate. Solar can reduce the billed units. A unit generated and used on site replaces a grid unit during that interval. Its value depends on the tariff and any applicable adjustment or duty, so calculate it from your actual bill.
2. Fixed charges for grid capacity
Demand charges may use CMD, recorded demand or a minimum of 80% to 90% of CMD, depending on the tariff. The illustrative range here is ₹350 to ₹650 per kVA a month. This pays for the grid capacity kept available to your premises. Confirm the exact billing formula in the current order.
Your factory or office may still need full grid power at night or during heavy cloud. A standard grid-tied array therefore does not automatically lower the contracted demand line. Put that continuing charge in the cash-flow estimate.
| Line on the bill | How it is billed | Likely effect of rooftop solar | Illustrative reduction |
|---|---|---|---|
| Energy charge | For each kWh or kVAh | On-site use replaces grid units, one unit at a time | 70% to 95% of daytime load |
| Normal daytime ToD energy | For each unit from 06:00 to 18:00 | Daylight generation reduces units bought in this slot | 80% to 100% of daytime units |
| Evening ToD peak surcharge | For each unit from 18:00 to 22:00 | No direct evening generation; storage or banked credits may change settlement | 0% without storage |
| Fixed or demand charge | Per kVA of CMD or RMD | Usually remains payable for reserved grid capacity | 0% |
| Electricity duty and cess | Percentage or charge per unit | May fall as grid imports fall, subject to the tariff | 70% to 90% |
| Fuel price adjustment, FPPCA | Variable charge per billed unit | Generally falls when billed grid units fall | 70% to 90% |
| Power factor incentive or penalty | Applied according to PF | Depends on APFC settings and the resulting grid PF | May be preserved or improved |
Match solar output to time-of-day tariffs
A time-of-day tariff assigns different rates to different hours to reflect demand on the grid. Check the actual slots on your bill; this example uses three:
- Normal, 06:00 to 18:00: The base energy rate applies.
- Evening peak, 18:00 to 22:00: An illustrative surcharge of 20% to 30% above the base rate applies.
- Night, 22:00 to 06:00: An illustrative rebate of 10% to 15% below the base rate applies.
Solar commonly produces from about 06:30 to 17:30, so its output lines up with daytime use, not the evening peak. Chillers, mall lighting, cold storage compressors and production lines can use much of that energy while the plant runs. Match hourly generation with your load profile before claiming that every generated unit replaces a full retail grid unit.
Understand kWh, kVAh and power factor
Some HT and larger LT tariffs bill apparent energy in kVAh rather than only active energy in kWh. Motors, pumps and transformers also draw reactive power. Without suitable capacitor correction, that reactive demand raises apparent energy and can increase billed units.
A grid-tied solar inverter commonly supplies active power at or near unity PF under standard settings. That helps run equipment, but the meter sees the remaining grid draw after solar has supplied part of the active load.
Suppose solar covers 70% of a factory's active kW load. Grid kW then falls, while uncompensated reactive demand from motors may stay high. The ratio seen at the grid meter can worsen. A low apparent PF may bring a penalty or reduce the savings expected from a kVAh tariff.
Have the automatic power factor correction, or APFC, bank inspected and retuned when solar is commissioned on a kVAh-billed service. Aim for the 0.98 to 1.00 PF range used in this example, and verify the meter reading after the plant starts operating.
Size a plant from 12 months of bills
A single summer or shutdown month can misstate normal demand. Collect 12 consecutive bills, note any unusual production period, and work through the following estimate before checking the site:
- Add annual billed units: Sum kWh across all 12 cycles. If your bill is in kVAh, use the active-energy reading or account for PF first. This example uses 1,80,000 kWh a year.
- Find daily average: Divide by 365. Here, 1,80,000 divided by 365 is about 493 units a day.
- Apply the local output estimate: In southern Andhra Pradesh, allow about 4.0 to 4.5 units per kWp a day on an annual average, or 1,400 to 1,600 units per kWp a year. At the illustrative 4.2 units per kWp a day:
493 daily units ÷ 4.2 units per kWp gives about 117 kWp. - Check the connection limit: Ask the DISCOM whether 117 kWp fits your sanctioned load or CMD and the local transformer limit.
- Check usable roof: At roughly 80 to 100 sq ft of clear roof per kWp, 117 kWp needs about 9,300 to 11,700 sq ft. Confirm shade and structural capacity on site.
For roof layout details, read our sizing guide. Then compare the investment with the solar payback calculation.
Twelve bills reveal how your business changes through the year. Use that profile to compare the proposed output with daytime use and exports. It can prevent paying for capacity that rarely offsets your own higher tariff units.
Account for duties, adjustments and export credits
Your bill can include levies beyond the base energy rate. Their treatment depends on your tariff and the way solar energy is used or exported.
1. Electricity duty and customer charges
Electricity duty may be set per grid unit or as a percentage. The illustrative range here is 6 paise to more than 50 paise per unit. Self-consumed solar does not pass through the utility meter as imported energy, but customer charges and the duty rules on your bill still need checking.
2. Fuel and power purchase adjustments
A DISCOM may add FPPCA or FACS to recover changing fuel and power purchase costs. Lower imported units can lower a per-unit adjustment. Do not assume the adjustment or its rate stays fixed throughout a plant's 30-year operating life.
3. Net-meter export and settlement
On a holiday or weekend, unused solar can flow through the bidirectional meter to the grid. The DISCOM records credits and applies them within the settlement cycle allowed for your connection. Ask how those credits can offset later imports and what happens at the end of the cycle.
A business may also discuss accelerated depreciation for solar with its chartered accountant. Section 33 of the Income-tax Act, 2025 provides 40% on written down value, subject to the current rules and your eligibility. The rate is halved when an asset is used for fewer than 180 days in the year of purchase.
Request a line-by-line power audit
A credible return estimate needs your actual tariff, 12 months of bills, a load profile and a site inspection. Ray2Volt offers free power audits for C&I premises around Tirupati, Srikalahasti, Puttur and nearby districts.
Our engineers review billing history, transformer and switchgear suitability, roof shade and usable area. The proposal should show plant size, expected units, the bill lines affected and an indicative payback based on your site. For a manufacturing example, see our factory solar guide.
Tariffs, duties, schemes and savings figures here are indicative and can change. Your eligibility, net-metering terms, load and local transformer capacity need confirmation through a site audit and the DISCOM. Check any depreciation claim with your chartered accountant. Ray2Volt does not provide tax or investment advice.
Common bill and solar questions
Will solar remove the fixed demand charge on my business bill?
Usually no. The DISCOM keeps grid capacity available under your CMD arrangement, including for nights, cloudy periods and demand peaks. A normal grid-tied plant can reduce imported energy while the fixed or billed demand line remains.
Why does my bill show both kWh and kVAh?
kWh measures active energy used by equipment. kVAh includes the effect of reactive power as well. If your tariff bills kVAh, have your APFC bank checked so the PF stays near the 0.98 to 1.00 range in this example.
How do time-of-day rates affect solar savings?
Solar mainly supplies your daytime load. It can replace imports in daytime tariff slots, while an evening peak surcharge usually remains unless storage or the applicable credit rules change the outcome.
What limits the size of a business rooftop plant?
Start with sanctioned load for LT or CMD for HT. The indicative cap is often 80% to 100% of that figure, subject to current DISCOM rules and transformer capacity. Obtain the utility's feasibility approval before treating any size as final.
What daily generation should I allow per kWp in Andhra Pradesh?
For an initial estimate, use an annual average of about 4.0 to 4.5 units per kWp a day, or 1,400 to 1,600 units a year. A site audit should adjust that range for shade, roof layout and losses.
Ray2Volt Solar Private Limited
We design, install, and service rooftop solar for homes and businesses across Tirupati district and Andhra Pradesh, from PM Surya Ghar residential systems to commercial and industrial plants. Every enquiry starts with a free power audit.
Get your business bill reviewed
Send Ray2Volt 12 months of bills. We will identify the tariff lines solar may reduce, inspect the site and prepare an indicative generation and payback proposal.
