Bombay High Court Stays Key MERC’s Solar Tariff Order

The Bombay High Court on Tuesday put on hold a crucial regulatory order that could reshape the economics of solar energy for commercial and industrial (C&I) users in Maharashtra, India’s largest state by industrial output.

A bench comprising Justices B.P. Colabawalla and Firdosh P. Pooniwalla heard urgent writ petitions from a coalition of renewable energy stakeholders, including O2 Renewable Energy VII Pvt. Ltd., the National Solar Energy Federation of India, the Distributed Solar Power Association, and JSW Neo Energy Ltd. The groups are challenging a June 25 order by the Maharashtra Electricity Regulatory Commission (MERC), specifically targeting Paragraphs 35.9 to 35.16 and Regulation 115 of the MERC (Multi-Year Tariff) Regulations, 2024.

During the hearing, lawyers for MERC and the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) sought a week’s time to respond, which the court granted. The matter is scheduled to resume on July 14. As an interim measure, the court recorded an undertaking from MERC and MSEDCL that Paragraph 35.15 of the disputed order would not be enforced until the next hearing, providing temporary relief to the petitioners.

The court noted that this assurance “adequately protects” the interests of the renewable energy companies at this stage and indicated that the writ petitions may be disposed of at the admission stage, hinting at a potentially swift resolution.

Tariff Changes Threaten Solar Savings

The legal tussle comes amid mounting concerns from the solar industry over Maharashtra’s new multi-year tariff (MYT) order, which analysts say could erode the financial viability of solar power for C&I consumers. The new regulations introduce revised Time-of-Day (ToD) slots, stricter banking norms, and propose grid support charges for rooftop solar users once statewide capacity crosses 5,000 MW.

Under the new rules, energy banked during solar hours (9 AM–5 PM) may only be drawn in the same time slot, limiting flexibility for businesses seeking to offset peak-hour consumption. The changes also apply to C&I consumers with rooftop solar, although residential users remain exempt.

MSEDCL’s proposal to introduce grid support charges is seen as a further blow to large commercial solar adopters, who already contribute significantly to the cross-subsidy pool. While the cost of banking has been set to zero for the purpose of these charges, industry groups argue the overall impact could make standalone solar projects less attractive, potentially accelerating a shift towards hybrid solar-wind systems.

The outcome of the court proceedings is expected to have far-reaching implications for Maharashtra’s clean energy transition and the broader commercial solar market in India.