Block Rate Tariffs
“How can we make an electricity tariff that becomes progressively cheaper as you use more energy?”
Charging less for increased energy consumption makes sense in many cases such as incentivizing renewable energy production. One way to accomplish this is to use a tariff structure in which energy consumption amounts are divided into discrete blocks and each succeeding block of energy used is cheaper. These Block Rate Tariffs can be implemented by utilities to accomplish their infrastructure and market goals.