Are your high electricity bills coming across as a shock to you? Did you ever wish someone could help you understand the bill better? Well, understanding the various components of your electricity bill and how are you billed for the electricity you consume is extremely important – irrespective of whether you are a homeowner or a business owner.

Let us take you through some components of your monthly electricity bill:

1. How are the units consumed calculated?

Your electricity bill bears the cost you pay for the electricity you consume every month. The electricity meter at your premise records your consumption in units or kWh (kilowatt-hour) and you are billed as per tariff rate at a per-kWh rate.

Still, confused? Let us give you an example. If you keep a 100 Watts bulb switched on for 10 hours, you end up consuming 1 kWh of electricity. Similarly, you can do a rough estimation of the electricity consumed by other appliances in your premises based on their wattage rating.

The total of these units is recorded continuously by your energy meter and your respective Distribution Company (like BSES, KSEB ) collects these readings every month. The readings are then applied to a slab-based tariff structure to come up with your monthly electricity charges.

How to read your electricity bill?

2. What tariff/ category do you belong to?

Our tariff code usually is recorded in our bills starting with either LT (Low Tension) or HT (High Tension). The category in the bill decides if the connection is residential, commercial, or industrial. LT codes are usually used for residential connections and personal offices, while HT codes are used for larger industries and complexes.

3. What is Contract Load?

This is the maximum amount of electricity demand that you as a customer expect to use at your premises. It can also be explained as the total energy supply that is offered to a meter. This is calculated in Kilowatts. You could be charged a penalty in case you cross the limit of your contracted load.

4. What is a Phase?

A phase is the current or the voltage between a wire and the neutral. Your connection can be either single-phase or 3-phase. To help you understand this better, you could look at it in terms of the distribution of load. The basic difference between the two is that a three-phase connection can handle a heavy load while a single-phase cannot.

Having a basic understanding of such parameters can help you to better understand and further look for options to reduce your electricity bills. Did you know that you could save up to 90% of your electricity bill by going solar? Surprised!! Well, don’t be – Freyr energy can help you get these savings. Download SunPro+ now, to get an estimate!