Maharashtra’s New Tariff Order Likely to Hit C&I Solar Profitability

Maharashtra's New Tariff Order Likely to Hit C&I Solar Profitability

The latest MYT tariffs approved by the Maharashtra Electricity Regulatory Commission (MERC) are likely to reduce the profitability of solar power for commercial and industrial (C&I) consumers. The new tariffs and regulatory changes may limit the savings potential for users of both rooftop solar and green energy through open access.

This concern arises from changes in certain charges, revised Time-of-Day (ToD) slots for solar power, and new banking norms. The proposed introduction of grid support charges for rooftop solar consumers adds further pressure on C&I prosumers.

Here are some key highlights of how the new tariff order could affect C&I consumers in Maharashtra:

1. Solar Hour Adjustments

The revised MYT tariff order changes the way solar banking is handled. MERC now states that energy banked during the normal ToD slots (midnight–6 AM and 6 AM–9 AM) can only be drawn in the same time slot or during solar hours (9 AM–5 PM). However, energy banked during solar hours or normal hours cannot be drawn during peak hours.

“Energy banked during Solar Hours ToD slot (0900 hrs – 1700 hrs) may be drawn in the same ToD slot,” the order said.

2. Applicable to C&I Rooftop Consumers Too

These new banking norms will also apply to C&I consumers using rooftop solar under the ToD billing system. However, residential consumers remain exempt from ToD-based banking for rooftop renewable energy connections, as clarified by MERC.

3. Introduction of Grid Support Charges

MSEDCL has proposed the introduction of Grid Support Charges once the total rooftop solar (RTS) capacity in the state crosses 5,000 MW. These charges are meant to address both commercial and technical issues arising from high RTS adoption, especially among large LT/HT consumers who contribute significantly to the cross-subsidy pool.

Although previously deferred in accordance with MERC’s 2023 amendment regulations, the Commission now anticipates that the 5,000 MW mark will be reached soon, triggering the need for these charges.

4. Cost of Banking

The “cost of banking” was earlier calculated based on the difference between the ToD tariff during solar generation (daytime) and usage (typically evening peak). However, with the removal of morning peak hours and restrictions on using banked solar energy during non-solar periods, the cost of banking has now been considered zero for computing Grid Support Charges.

Industry stakeholders argue that these changes make standalone solar projects less financially attractive. However, some believe this shift could lead to greater interest in hybrid solar-wind systems that offer better flexibility and savings.