Simple Electricity Tariffs

04/14/19

“What is the simplest type of energy tariff?”

In order for energy companies to survive, they need to find a way to charge money for the energy they produced. This is usually done through an Electricity Tariff. The most simple type of electricity tariffs is known as Simple Electricity Tariffs. These tariffs simple charge money in direct proportion to energy consumed. The advantages of this is that it simple, easy to understand and implement, and directly responds to how much electricity is used per-capita. However, the drawbacks is that these tariffs cannot be tailored to specific group’s needs, which can lead to higher cost, provides no incentive to consume more electricity, and if no electricity is purchased during the month then the utility can die.