MERC Rejects Scrapping of Grid Support Charges for Rooftop Solar

MERC Rejects Scrapping of Grid Support Charges for Rooftop Solar

The Maharashtra Electricity Regulatory Commission (MERC) has dismissed a petition seeking to eliminate Grid Support Charges (GSC) applicable to rooftop solar systems in the state. The state power regulator ruled that the charges were legally established and necessary to maintain grid stability and service infrastructure.

The order was passed after a petition was filed in the Maharashtra power regulator, seeking to to scrap GSC for rooftop solar systems sized between 10 kW and 1 MW. The individual petitioner argued that the existing banking charges already compensate discoms, rendering the grid security charges redundant, and claimed the levy was discriminatory.

Rooftop Regulations Challenged 

The petition targeted provisions introduced under the MERC (Grid Interactive Rooftop Renewable Energy Generating Systems) Regulations, 2019, and their subsequent amendments. Budhay also accused the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) of non-compliance, stating it had not implemented the amended regulations through the required commercial circulars.

In response, MSEDCL maintained the petition was premature, arguing the grid support charges would apply only once the state’s total rooftop solar capacity crosses 5,000 MW — a threshold not yet reached. The utility defended the charge as a product of due legal process and public consultation, distinct from charges under open access systems.

Banking Charges Not A Substitute For GSC

MSEDCL also asserted that banking charges are not a substitute for grid security charge (GSC), which incorporates costs related to grid balancing, standby services, and the use of distribution infrastructure. The utility said high-end consumers using net metering undermine the cross-subsidy framework, increasing financial pressure on other categories of consumers.

Addressing jurisdictional concerns, MERC clarified that the case did not qualify as a public interest litigation and therefore was within its purview.

The Commission ruled that GSC, as defined in the 2019 regulations, was necessary to partially recover the cost of services provided by distribution licensees after accounting for benefits such as Renewable Purchase Obligation (RPO) compliance and avoided distribution losses.

MERC’s Views On The Case 

MERC rejected allegations of discriminatory treatment, stating exemptions for consumers with loads under 10 kW were aimed at promoting adoption among low-load users, especially in the residential sector, which benefits from central subsidies. The Commission emphasized that net metering and open access consumers operate under separate regulatory frameworks.

While dismissing the petition, MERC expressed displeasure over MSEDCL’s delay in implementing the Rooftop RE (First Amendment) Regulations, 2023, despite the absence of a court stay. The Commission reiterated that MSEDCL was obligated to comply and had been previously ordered to issue implementation circulars.