The Maharashtra Electricity Regulatory Commission (MERC) recently issued its order on the tariff review petition filed by MSEDCL, the state’s distribution utility. The utility had approached the Commission seeking corrections to what it described as discrepancies in the earlier Multi-Year Tariff (MYT) order, citing implications for its financial sustainability and power procurement planning.

The review addressed key areas including approval of capital expenditure, estimation of agricultural demand, and the framework governing Time-of-Day (ToD) tariffs and renewable energy banking. The matter was reconsidered in line with remand directions from the High Court and the Supreme Court, with the process involving detailed public consultations and stakeholder participation.

However, the recent changes in Time-of-Day (ToD) tariff norms and other regulatory provisions are expected to have a significant impact on solar consumers across the state. The following are five key pros and cons of the order that are likely to shape the solar ecosystem in Maharashtra. While some experts have cautioned that the ruling could undermine rooftop solar economics, alter consumption behaviour, and affect investor confidence, others view certain measures as part of a broader reform push aimed at improving grid efficiency and long-term sustainability.

1. Higher incentives for daytime (solar hour) consumption

The Commission has introduced enhanced Time-of-Day (ToD) rebates to promote electricity usage during solar generation hours (09:00–17:00). Rebates are set at 15% (April–September) and 25% (October–March) for FY 2025-26, with a gradual increase to as high as 30% by FY 2029-30. This provides a clear financial incentive for consumers, especially industrial users and EV charging operators, to shift their load to daytime hours in line with renewable generation.

2. Gradual reduction in overall tariffs

With MSEDCL increasingly procuring power from lower-cost renewable sources such as solar, wind, and storage, the resulting savings are expected to benefit consumers. Projections indicate a reduction in average tariffs across most categories by FY 2029-30, including an estimated 14% decline for residential consumers and around 8% for HT industrial users, indicating a long-term move towards more affordable electricity.

3. Safeguards for small and residential solar users

The order includes provisions to protect smaller consumers from additional financial burden. Rooftop solar installations with a sanctioned load of up to 10 kW are fully exempt from Grid Support Charges (GSC). Additionally, residential consumers are provided greater flexibility in banking, as they are not subject to the stricter Time-of-Day slot restrictions applicable to other categories.

4. Removal of overlapping banking charges

For consumers above 10 kW who are liable to pay GSC, the Commission has removed earlier banking charges that were introduced in lieu of GSC. This ensures that consumers are not subjected to double-charging for grid usage and energy banking, providing a more streamlined cost structure.

5. Push for technology adoption 

The MYT order also promotes grid modernisation and better energy management. The rollout of smart meters will enable real-time monitoring of consumption and help consumers optimise usage during solar hours. The recognition of green energy procurement towards Renewable Purchase Obligations (RPO) supports the broader renewable ecosystem, while the push towards Battery Energy Storage Systems (BESS) is expected to help consumers improve self-consumption and manage peak demand more effectively.

1. Grid Support Charges Increase Cost Burden

The introduction of Grid Support Charges (GSC) marks a direct financial hit to solar consumers.
With Maharashtra’s rooftop solar capacity crossing 5,178 MW, the earlier exemption threshold has been breached, triggering these charges. Crucially, the levy applies to all generated units, not just exported power, effectively taxing even self-consumed solar energy—raising concerns over fairness and cost efficiency.

2. Banking Restrictions Reduce Solar Value

The revised banking framework significantly limits flexibility for solar users. Under the new rules, power generated during solar hours (09:00–17:00) can only be consumed within the same time slot. This eliminates the ability to offset costlier evening peak consumption, particularly affecting industrial and municipal users that rely on daytime generation for nighttime demand, thereby eroding the economic value of solar installations.

3. Withdrawal of Night-Time Tariff Incentives

MERC’s decision to remove the 10% Time-of-Day (ToD) rebate for night-time consumption (00:00–06:00) further increases costs. Consumers who had shifted operations to off-peak hours to optimise energy costs now face higher tariffs, reducing incentives for load management and effectively penalising earlier efficiency strategies.

4. Retrospective Tariff Application Raises Liability Risks

The order’s retrospective implementation from July 1, 2025, introduces significant financial uncertainty.
Solar consumers may now face revised billing and arrears, despite having operated under earlier tariff assumptions. Although installment-based recovery has been suggested, the move creates an unexpected financial burden and raises regulatory risk concerns.

5. Threat to Project Viability and Investor Confidence

Collectively, the changes could impact the long-term viability of rooftop solar investments. Stakeholders indicate that revised cost structures and policy unpredictability may lead to 20–30% higher electricity costs for SMEs and industrial users. This could deter future investments, strain existing project financing, and potentially push businesses to reconsider operations in Maharashtra.