Time-of-Use (TOU) Pricing and How KSA can transition

Time-of-use(TOU) pricing is applied to time slabs consisting of off-peak time and on peak time. It gives a holistic picture of the energy consumption of a country. On-peak hours are the six hours of the typical weekday afternoon, whereas, off-peak is the rest.

The pricing is kept preordained and persistent. Implementation of distributed energy resources(DERs) around Saudi Arabia is an encouraging factor that plays right into the energy conservation mix. DERs, such as smart water heaters and energy storage devices are becoming commonplace in high rise skyscrapers and are expected to be deployed diligently.

DERs need Advanced Metering Infrastructure (AMI) to behave as intended and this is one of the key areas Saudi Utility companies should target. Under Vision 2030, Saudi Arabia needs to show diversified and dynamic energy resources and TOU Pricing should be at the forefront of other best practices such as AMI and DERs.

TOU Pricing should be complementary with Demand and Energy supply. Residential, Commercial and Enterprise, all should be educated on the benefits of off-peak electricity usage. State-wide governmental focus on the enlightenment of individuals or entities is the only sure-shot way of proactively engaging consumers.

DERs can minimize average peak load usage by as much as 10-30%.Government’s focus on educating consumers yields another 5-12 % as indicated by this study. On a national level, savings of at least $3 billion yearly are expected if only a 5% energy consumption decrease is considered.

How to Implement TOU pricing effectively

TOU implementation can be a two-edged sword. On one hand, you have to balance consumer engagement with the system and on the other hand utility compliance and regulation.

Empathizing with the consumer should be at the forefront of every governmental procedure. The massive discrepancy in the electricity bills from Summer to winter will effect TOU pricing indefinitely. Keeping the middle class and fixed income consumers in mind, the pricing can be varied by proactively scrutinizing the electrical market to keep everyone happy.

Educating people on the benefits of renewable resource dependency is the linchpin of Market capitalization towards Carbon neutral Saudi Arabia. Social media campaigns should be run educating consumers about TOU pricing and its effective role in your savings.

Saudi Government should take bold steps towards ensuring DERs are implemented. Free smart thermostats should be procured and installed in homes, empowering consumers. Low average peak demand usage will definitely have a better ROI in the longer run.

Smart Thermostats have a sophisticated algorithm that can optimize user energy expenditure. By managing heating and cooling of the house or building, one can ensure a minimum bill without sacrificing user comfort.

These thermostats can also be coupled to solar panels and their battery storage devices. Ensuring a smooth transition and streamlined use portfolio. The government can incentivize and give discounts on installing these devices ensuring increased adoption.


TOU pricing can be hard to understand and even more arduous to execute. Saudi government can and should educate the masses about the policies and implement it statewide. The savings from the administration of DERs will only lead to an overall happy economy.

Having an effective multi-channel communication strategy will pay dividends in the near future. Ethraa can help implement and encourage these policies by spreading renewable rhetoric and awareness.

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