MERC Rejects Petition To Scrap Grid Support Charges For Rooftop Solar Systems Between 10 kW And 1 MW In Maharashtra

The Maharashtra Electricity Regulatory Commission (MERC) issued its order in Case No. 176 of 2023 on a petition filed by Mr. Sudhir Budhay, who sought the removal of Grid Support Charges (GSC) applied to rooftop solar systems with capacities above 10 kW and below 1 MW after the state’s cumulative rooftop solar capacity exceeds 2,000 MW. The petitioner argued that banking charges were already being levied to recover the distribution licensees’ costs, making GSC redundant and unnecessary. He claimed that GSC unfairly targets a specific band of consumers—those with sanctioned loads between 10 kW and 999 kW—while exempting both small (less than 10 kW) and large (more than 1 MW) consumers.

Mr. Budhay, a renewable energy consultant who previously advocated for net metering in Maharashtra, maintained that rooftop solar power injected into the grid remains within the distribution circle and does not travel through the intrastate transmission network. Thus, he argued that transmission charges should not apply. He also contended that wheeling losses were already being compensated through banking charges—7.5% for HT consumers and 12% for LT consumers—as determined in a previous MERC order. These deductions were designed to help the distribution company recover costs for energy banking services.

The Commission, in its 2020 order, had allowed banking charges as an interim measure until the 2000 MW threshold for rooftop solar capacity was reached, after which GSC would be reconsidered. Later, the MERC extended this threshold to 5000 MW in its Rooftop RE (First Amendment) Regulations, 2023. However, Mr. Budhay pointed out that MSEDCL had not yet implemented the provisions of the amended regulations.

MSEDCL responded by stating that consumers with loads above 1 MW fall under the Open Access regime and are already subject to other charges, such as cross-subsidy surcharges and wheeling charges. They maintained that the introduction of GSC followed a proper legal and consultative process as outlined in the 2019 regulations. MSEDCL also argued that banking charges only cover a part of the services provided and do not include all components of the GSC.

The Commission reviewed the regulatory background, including the rationale from the 2019 Statement of Reasons. It reiterated that the GSC was introduced to partly recover fixed costs, wheeling losses, and other grid-related services from net metering users. These costs are not entirely recovered through energy tariffs due to reduced billing when rooftop systems generate their own power.

Despite acknowledging the petitioner’s concerns, the Commission found no merit in the claims of discrimination or redundancy between GSC and banking charges. It emphasized that the GSC could not be withdrawn through this petition since it was established by a properly notified regulation following public consultation. Moreover, the Commission noted that MSEDCL had failed to comply with its earlier directives to implement the amended regulations and had filed a writ petition in the Bombay High Court without securing a stay. Still, enforcement of this aspect was being handled in a separate case.

Ultimately, the MERC rejected the petition.