As Fy25 Ends, A Mixed Message For Solar From Regulators, Courts

The final week of March, also the end of the financial year 2024-25, saw a troika of rulings in favour of solar, and solar customers by extension, across key states of Maharashtra, Karnataka and Tamil Nadu.

 

Maharashtra Regulator Backs Solar With Vote For Status Quo

 

In Maharashtra, the Maharashtra Electricity Regulatory Commission (MERC) rejected key state discom MSEDCL’s proposal to impose Time-of-Day (TOD) billing on domestic solar users. This vote for status quo brought relief for solar consumers in the state who fared it was going to lead to an adverse change in rules for them.

The MSEDCL had proposed that total electricity usage, which is being offset against the solar units generated  should give way to a system where new smart net meters, would function as Time-of-Day (TOD) meters. In the proposal, only solar electricity generated between 9 am and 5 pm could be adjusted against consumption during the same time period. Any excess electricity generated during these hours would be categorised as off-peak electricity and not be used to offset peak-hour consumption, which is from 6 pm to 9 am.

Thus, the higher units that were bound to accumulate would be compensated for by MSEDCL at a reduced rate of Rs. 3 to Rs. 3.50 per unit. Even as electricity consumed during peak hours from 6 pm to 9 am would be billed separately killing the whole promise of zero bills. MERC, by maintaining status quo has effectively ensured that momentum will continue for solar rooftops in the state for now.

 

In Karnataka, Tariff Reductions Opens Up New Hurdles For Open Access

In Karnataka, the issue is the revised MYT tariff order for FY26-28. While reducing tariffs to boost cost-effectiveness in manufacturing and services, with commercial tariffs dropping below industrial tariffs for the first time, at Rs 5.95/kWh(from Rs 8 /kWh)  versus Rs 6.6/kWh (from Rs 6.9/kWh in FY25) for industrial tariffs, it has created a piquant situation for  RE developers. A 26% drop in commercial tariffs erodes equity returns in Open Access RE transactions, making utility power the more economical choice. That could mean a setback to Open Access projects within the state especially. With the state likely to see some sort of efforts to match up from neighbouring Maharashtra and Tamil Nadu especially, Open Access Projects could face a tight market across the region. The saving grace could be RTC or FDRE power, especially if battery storage costs continue to fall. Thus, it is a broader push for reducing emissions across industries that will push the next wave of RE expansions, rather than just lower costs, as seen until now.

 

Madras HC Provides Relief For Rooftop Solar 

 

Meanwhile in Chennai, state utility Tangedco’s move to impose network charges for rooftop connections not linked to the grid were nixed by the Madras High Court. In a ruling that could be key for industrial consumers in the state, the court judged that the charges were contrary to the state’s stated policy of backing solar, besides regulations and statutory directives.

the court was ruling on a writ brought by the South India Spinners Association and others, which was contesting TANGEDCO’s imposition of network charges of Rs 0.83 on solar power generated by HT users, and Rs 1.27 per unit by LT users in an order in 2021. The charge fixed by the electrical inspectorate of 10 paise for unit was deemed the correct charge in this case, despite TANGEDCO’s contention that even off grid customers of solar could use it only because of rhe connectivity and conversion provided by TANGEDCO.

 

Conclusion: The three events at the end of the year indicate two things. One, the ever higher mainstreaking of solar power, where it is beginning to make a serious impact on revenues, and grid calculations with its contribution. Secondly, as solar reaches a point where it is meant to be as cost effective, or even better than thermal in cases, it will need to gear up for stronger challenges from discoms that remain focused on their finances first.