South Korea Lowers Daytime Industrial Rates to Encourage Solar Use

The government will push forward a restructuring of the electricity rate system within the first quarter of this year, raising industrial electricity rates during evening and nighttime while lowering them during daytime. This aims to encourage industries to utilize surplus solar power generated during the day. Solar power facilities will be aggressively expanded in traditional markets, parking lots, schools, and other locations.

The Ministry of Climate, Energy and Environment announced on the 1st an energy transition work plan detailing these measures. The ministry stated it will focus all capabilities on achieving 100GW (gigawatts) of renewable energy by 2030 and securing a power grid to accommodate it.

To this end, the ministry plans to install solar power facilities in more than 50 traditional markets, over 1,500 parking lots, and 500 schools this year, expanding to more than 6,400 schools by 2030. It will also create 500 “Sunlight Income Villages” this year, a model where villages generate electricity through solar power and create shared income by selling it.

Aggressive renewable energy policies will inevitably lead to a surge in daytime solar power generation, which the government plans to have industries absorb. The ministry revealed it will raise industrial electricity rates during evening and nighttime while lowering daytime rates—when solar power generation is active—within the first quarter.

Currently, peak-time rates during daytime, when industrial electricity demand is high, are set higher, while nighttime rates, when electricity is supplied by cheaper nuclear and coal power plants, are maintained at 35–50% lower than daytime rates. Going forward, the government will lower daytime rates to induce industrial demand in line with the expansion of renewable energy. Industrial electricity rates have surged by about 70% over the past three and a half years.

However, root industries such as foundries, which must operate 24/7 regardless of day or night, and energy-intensive sectors like steel and petrochemicals have reacted by calling the policy “robbing Peter to pay Paul.”

The ministry also plans to introduce a regional rate system by the end of the year, allowing areas near power plants to use electricity at lower rates. Efforts to strengthen the independence of the Electricity Committee and establish a power supervision agency to enhance grid safety and fairness in the power market will also proceed.