Nagpur: Rooftop solar consumers in Maharashtra are set to face a major setback from the new financial year, with the Maharashtra Electricity Regulatory Commission (MERC) sharply reducing the tariff for surplus solar power fed into the grid. The move is being seen as a dampener for consumers who invested in rooftop solar systems to promote green energy.
As per the new order, MERC has slashed the surplus power tariff to Rs 2.82 per unit, down from the earlier range of Rs 3.30 to Rs 3.50 per unit. In a significant policy shift, the Commission has also decided to fix this tariff for a period of five years starting April 1, departing from its earlier practice of revising the rate annually.
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The order was passed suo motu at a time when consumer rights activists were preoccupied with hearings related to the Multi-Year Tariff (MYT) petition. Consequently, only six objections, mostly from the biogas sector, were submitted during the proceedings.
Renewable energy expert Sudhir Budhay, while talking to a local daily, said the decision would primarily impact small commercial and industrial consumers who have installed rooftop solar systems. He warned that the situation would worsen once the Grid Support Charge (GSC) is implemented. According to Budhay, after the GSC comes into force, the effective surplus power rate for low-tension (LT) consumers may drop to as low as Rs 0.72 per unit, effectively negating the financial viability of rooftop solar installations.
The GSC will be levied once MSEDCL achieves 5 MW of solar power capacity. While household rooftop solar consumers are currently exempt, Budhay cautioned that residential users too would feel the impact once the GSC is enforced. Maharashtra’s current solar capacity stands at around 3.5 MW, and reaching the 5 MW threshold is not considered difficult.
“In effect, it depends entirely on the government. If the threshold is declared tomorrow, there would be no scope to challenge it,” Budhay said. He also pointed out that fixing the tariff for five years deprives consumers of the indexation benefit, even as MSEDCL continues to hike power tariffs annually on similar grounds.
Budhay further criticised MERC’s methodology for determining the revised rate, stating that the Commission benchmarked the surplus tariff against the Mukhyamantri Saur Krushi Vahini Yojana (MSKVY) 2.0. He argued that MSKVY involves large, utility-scale solar projects that benefit from low-cost financing, government-provided land and institutional support, making such a comparison unfair.
“Rooftop solar systems are typically in the 2.5 kW to 10 kW range, with high upfront investment. Comparing them with megawatt-scale projects is neither practical nor just,” Budhay said. He suggested that MERC should have considered Indian Railways’ recent solar power tender at Rs 4.50 per unit, which, according to him, better reflects market realities. “Industry standards require an ‘apple-to-apple’ comparison, which was missing here,” he added.
The fixed low tariff, especially for a five-year period, could severely impact solar aggregators and discourage new investments, Budhay warned. “Why would commercial and industrial consumers lock in huge capital when the returns are clearly negative?” he asked.
Energy activist Mahendra Jichkar said stakeholders inadvertently missed the importance of the hearing due to their focus on the MYT process. “This decision may make many consumers regret opting for rooftop solar,” he said.
With policy uncertainty on the rise, experts fear that despite a designed lifespan of 25 years for rooftop solar systems, frequent and adverse policy shifts could turn such investments into a liability for small consumers, undermining the broader national push towards renewable energy.
