By: Staff Writer
June 29, Colombo (LNW): The government’s proposal to introduce smart electricity meters and time-of-use (ToU) tariffs represents a major shift in the way Sri Lankans will pay for electricity. According to Deputy Minister of Power Arkam Ilyas, the objective is to encourage consumers to use more electricity during the daytime instead of the evening peak, when the country depends heavily on costly fossil fuel generation.
From an energy management perspective, the proposal makes economic sense. Electricity generated during the day increasingly comes from lower-cost renewable sources such as hydropower and solar energy, while demand at night often requires expensive thermal power plants operating on imported fuel. If more households can move part of their electricity consumption to daytime hours, the country could reduce fuel imports, lower generation costs and improve the stability of the national grid.
However what appears logical on paper raises difficult questions in practice.
The government has repeatedly committed to introducing a cost-reflective electricity pricing model under its agreement with the International Monetary Fund (IMF). Consumers have already endured several tariff increases in the name of restoring financial discipline to the energy sector. Understandably, the public now expects reforms that are transparent, equitable and capable of delivering long-term benefits rather than simply increasing household expenses.
This is where the government must provide far more information than it has so far.
The proposed rollout will initially target between 300,000 and 400,000 domestic consumers using more than 180 units of electricity each month through the installation of smart meters. These devices will record electricity consumption throughout the day, allowing utilities to charge different prices depending on when electricity is used.
However, many families have limited flexibility over when they consume electricity. Working parents, schoolchildren and elderly family members often rely on electricity during the evening for cooking, studying, washing and cooling their homes. These are essential activities, not luxury consumption. Without carefully designed pricing bands and adequate safeguards, many middle-income households could face even higher bills despite having little ability to alter their daily routines.
The government must therefore explain whether consumers will receive incentives to shift demand rather than simply penalties for using electricity during peak periods. It must also clarify who will pay for the installation of smart meters and whether consumers will be given sufficient notice and education before the new system takes effect.
Equally important is the question of protecting vulnerable communities. Families already struggling with inflation, rising food prices and stagnant incomes cannot absorb another significant increase in living costs. Any new tariff structure must include targeted subsidies or concessionary rates for low-income households, pensioners and other vulnerable groups.
The transition also provides an opportunity to promote domestic battery storage systems and rooftop solar installations, enabling households to store cheaper daytime electricity for evening use. Such complementary policies could make time-of-use pricing both practical and financially attractive.
Ultimately, successful electricity reform depends not only on technology but also on public confidence. Smart meters may help modernise Sri Lanka’s electricity sector, but they cannot succeed unless consumers believe the system is fair, transparent and designed to reduce costs rather than simply redistribute them.