Maharashtra Electricity Regulatory Commission Sets Rooftop Solar Tariff At ₹2.82/kWh For FY 2025-26

The Maharashtra Electricity Regulatory Commission (MERC) has issued a Suo-Motu order to determine the generic renewable energy tariffs for the financial year 2025-26 under its existing Renewable Energy Tariff Regulations, 2019. These regulations were initially applicable from April 1, 2020, to March 31, 2025. However, the Commission extended their applicability for another five years from 2025-26 to 2029-30.

As per the existing regulations, the Commission will not determine generic tariffs for wind, solar PV, non-fossil fuel-based co-generation, biomass, and hybrid projects, as these are now to be processed only through transparent competitive bidding. However, MERC continues to determine the generic tariff for rooftop solar PV and the variable charges for biomass and non-fossil fuel-based co-generation projects that are not covered under bidding.

The Commission invited public suggestions on the draft tariff order via a public notice issued on February 20, 2025, and also conducted an e-hearing on March 19, 2025. In total, six stakeholders provided inputs. Among them, MSEDCL recommended that the generic tariff for rooftop solar be set at ₹2.69/kWh, which was the lowest discovered tariff in a recent auction. However, the Commission decided to consider more recent auction results from March 2025 where tariffs ranged from ₹2.82/kWh to ₹3.10/kWh under the Mukhyamantri Saur Krishi Vahini Yojana 2.0. Consequently, MERC finalized ₹2.82/kWh as the generic tariff for surplus power from rooftop solar PV systems under net metering and net billing for FY 2025-26.

For biomass and non-fossil fuel-based co-generation projects, MSEDCL suggested a pro-rata method to calculate variable charges. However, the Commission rejected this, citing that such an approach is not supported under the current regulations. Instead, it followed the prescribed formula based on an indexation mechanism. This mechanism involves calculating current charges based on previous base-year prices escalated annually. The base year prices used were ₹3965/MT for biomass and ₹2258/MT for bagasse (non-fossil fuel). These were determined through an independent study by TERI and adopted by the Commission in its 2022 order.

There were objections to the fuel price assumptions, particularly regarding bagasse, with some stakeholders arguing that the Commission should have adopted CERC’s fuel prices or carried out a fresh independent study due to rising market rates. However, MERC justified continuing with its current approach, referencing the APTEL judgment, which upheld the need for consistency and allowed the use of third-party study results combined with a fixed escalation rate. As a result, the Commission used a 5% annual escalation to update the fuel prices.

Based on these parameters and formulae, the Commission determined the variable charge for biomass-based projects as ₹6.87/kWh and for non-fossil fuel-based co-generation projects as ₹5.29/kWh for FY 2025-26.

Additionally, while not mandated under the RE Tariff Regulations, the Commission also published the Average Power Purchase Cost (APPC) for various distribution licensees to simplify tariff agreements under the gross metering mechanism. For instance, the APPC was ₹5.15/kWh for MSEDCL and ₹6.72/kWh for BEST Undertaking.

These tariffs and rates will come into effect from April 1, 2025. The order brings clarity and continuity to renewable energy tariffs in Maharashtra while balancing stakeholder concerns and regulatory consistency.