Solar boost for Maharashtra as MERC waives grid support charges

The Maharashtra Electricity Regulatory Commission (MERC) has decided not to impose any grid support charges on rooftop solar installations until the state achieves solar rooftop capacity of 2,000 megawatts (MW).

Currently, the state’s solar capacity stands at 426MW, which was achieved between 2015 and March 2020. Following the Covid-19 lockdown across different countries and in India, the industry has witnessed significant losses owing to a drop in import of solar products and no new installations. Experts welcomed the move but said that it would take a minimum of three years to achieve the 2,000MW target as average installations do not exceed 10 to 20 kilowatt-power in the state.

The details were published in the final multi-year tariff orders issued by the commission on Monday evening. “The idea is to boost clean energy and overall solar installations. Over the last six months, we have taken multiple actions for this, and this one of the overarching steps strengthening that cause,” said Abhijeet Deshpande, secretary, MERC. “Once we achieve this target, the commission will take a call on what charges can be levied.”

Grid support charges would otherwise have to be paid to Maharashtra State Electricity Distribution Company Ltd (MESDCL) as infrastructure cost of the grid (built through public money) and to avoid additional tariff burden on non-solar consumers. “When units from a rooftop solar plant are exported, infrastructure of MSEDCL is utilised. On using this grid infrastructure, a certain wheeling charge is applicable. Also, MSEDCL needs to balance the grid, and bank the units not utilised by the consumer. This has now been waived off for all consumers,” said another senior MERC official.

While grid support charges have been removed, MERC approved banking charges in the form of energy adjustment. It would be 7.5% for high-tension (HT) lines and 12% for low-tension (LT) of the energy being banked in the grid.

“When a user is unable to consume the amount of power generated through solar, they export extra units back to the grid, which leads to an inherent loss being safeguarded by the electricity distributor through the grid. We are asking the consumer to bear that loss in kind,” said Deshpande. “For example, if a person banks 100 units, MSEDCL will return 92.5 units for HT and 88 units for LT.”

In January, MERC had amended the state’s solar policy and published the MERC (Grid Interactive Rooftop Renewable Energy Generating Systems) Regulations, 2019 to include grid charges for all consumers. “The earlier policy was discouraging rooftop solar installation and drew a lot of flak. The new order is a good step and will see a drastic improvement in new installations as viability increases,” said SP Gon Chaudhuri, chairman, International Solar Innovation Council.

Maharashtra has an overall solar capacity target of 4,000 MW, which means the state has reached up to 10% of its target in five years, and in the next two years will have to complete almost 90% of the balance target. “The only way the state can achieve this is through effective policy decisions and attracting private players for 100MW plus installations like Karnataka and Telangana,” added Chaudhuri.