Tiered Electricity Pricing for Residential Households to Encourage More Efficient Energy Usage
Ministry of Trade and IndustrySpeakers
Summary
This question concerns MP Mr Don Wee’s proposal to introduce tiered electricity pricing for residential households to encourage more efficient energy usage. Minister for Trade and Industry Gan Kim Yong responded that electricity is currently priced to reflect its full cost of production and delivery, ensuring households pay for what they consume. He noted that tiered pricing could unfairly penalize multi-generational families and highlighted alternative tools like advanced meters and mobile apps for tracking consumption. Additional initiatives include NEA’s online resources for energy-saving habits and the Climate Friendly Households Programme, which provides e-vouchers for efficient appliances to eligible HDB households. The Ministry encourages conservation through technological tracking, financial incentives for efficient products, and the adoption of energy-saving habits among all Singaporeans.
Transcript
11 Mr Don Wee asked the Minister for Trade and Industry whether the Ministry will consider tiered electricity pricing for residential households, with progressively higher prices for subsequent tiers, to encourage households to use electricity more efficiently.
Mr Gan Kim Yong: To encourage households to use electricity efficiently, electricity should be priced to reflect its full cost of production and delivery. This is our current approach, under which households pay for what they consume.
Tiered electricity pricing may have inadvertent implications. For example, a multi-generational family will have to pay a higher rate if they live under the same roof versus living in separate homes.
We encourage households to use electricity more prudently in other ways:
(a) SP Services has been progressively replacing households' analogue (cumulative) electricity meters with advanced electricity meters, which allow households to track their electricity consumption through the SP Utilities Mobile App. This will help households better understand their electricity usage patterns and encourage them to be more energy-efficient.
(b) NEA provides online resources to help households to adopt energy-saving habits. Households can also use the online Life Cycle Cost Calculator to select the most energy-efficient home appliances based on their life-cycle costs.
(c) NEA and PUB launched the Climate Friendly Households Programme in November 2020 to encourage 1-room to 3-room HDB households to switch to energy- and water-efficient appliances. Each eligible household can redeem e-vouchers to offset their cost of purchasing LED lights, energy-efficient refrigerators and water-efficient shower fittings.
We encourage all Singaporeans to adopt energy conservation as a way of life – from designing an energy-efficient home, to choosing energy-efficient appliances and adopting energy-saving habits.