Pre-payment vs Post Payment

Quite a few residential societies face a problem in getting payments in time and find it difficult to take actions against the members with significant dues. Some societies distribute electricity and need to collect money every month. Many of such societies do implement a pre-paid option in the electricity billing to recover electricity and maintenance charges. What are the pros and cons of Pre-paid vs Post-paid options?

 

 In the post-paid scenario, the society can cut the electricity connection as well. The most fundamental difference between pre-paid and post-paid connection is that in case of pre-paid electricity connection, the disconnection switch is inside the meters and ostensively the disconnection is automatic and not discretionary. The disconnection switch however can be included in a meter in a post-paid option as well. Let us look at pros and cons of the possible post-paid and prepaid systems:

Option

Pros

Cons

Post-paid options

Manual Disconnection

  1. There is no special infrastructure needed for disconnection.
  2. Consumer friendly
  3. Credit rating implementable
  4. The system is difficult to implement
  5. The system is discretionary

 i. The system is difficult to implement

ii. The system can be discretionary

Automatic disconnection without data collection (communication only for disconnection)

  1. The solution provides good visibility and audit possibilities
  2. Consumer friendly
  3. Credit rating implementable
  4. Expensive infrastructure
  5. Some discretion is possible
 i. Expensive infrastructure

ii. Some discretion is possible

Automatic disconnection with integration of centralized software

  1. Excellent reporting and process auditing
  2. Consumer friendly
  3. Can provide individual level energy consumption visibility
  4. Better energy audit
  5. Expensive Infrastructure
 i. Expensive infrastructure

ii. Some discretion is possible

Pre-paid options

Pre-paid with no central data collection

  1. Easy to implement
  2. No discretion possible

 

  1. Not very consumer friendly
  2. Expensive Infrastructure
  3. There are possible legal challenges
  4. Audit become difficult
  5. Little process visibility
  6. Credit limit not possible
  7. vii Slab based tariff not possible

Pre-paid with centralized data collection software

  1. Reporting and auditing
  2. Not so consumer unfriendly as pure pre-paid system
  3. Can provide individual level energy consumption visibility
  4. Better energy audit
  5. Credit rating implementable
  6. Expensive infrastructure
  7. Requires good software back-up by good integration
 i. Expensive infrastructure

ii. Requires good software back-up by good integration

Please share thoughts and experiences for the same. Please reach out to us at contact@smartcommunity for study or implementation.

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