MERC Approves 2,269 MW Solar Power Procurement For Farmers Under Mukhyamantri Saur Krushi Vahini Yojana 2.0

The Maharashtra Electricity Regulatory Commission (MERC) has approved a proposal from Maharashtra State Electricity Distribution Company Limited (MSEDCL) to start a new competitive bidding process for the procurement of 2,269 MW of solar power. The procurement will be carried out under the Mukhyamantri Saur Krushi Vahini Yojana 2.0 (MSKVY 2.0), a state initiative designed to supply reliable daytime electricity to farmers while also helping the utility meet its renewable purchase obligations.

The approval is expected to accelerate solar power development in the state and support the government’s broader plan to solarize agricultural electricity feeders. Through this program, solar projects will be connected directly to agricultural feeders so that farmers receive electricity during the day instead of night hours, improving productivity and reducing operational challenges.

In its order, the Commission also approved a significant change in the bidding structure. MSEDCL had requested permission to de-link the solar procurement from the Central Financial Assistance (CFA) available under the PM-KUSUM Scheme. According to the utility, previous tenders faced challenges due to the mandatory requirement to use Domestic Content Requirement (DCR) compliant solar modules. Developers had reported difficulty in sourcing these modules because of limited supply and higher prices, which slowed project participation and increased costs.

Considering these challenges, the Commission allowed MSEDCL to remove the DCR restriction for the new bidding round. Developers will be permitted to use imported solar cells, provided that bids were submitted by August 31, 2025. This decision is expected to attract a larger number of developers and improve competition in the tender process.

To ensure cost efficiency, the Commission approved a ceiling tariff of ₹2.90 per unit for the procurement. MSEDCL has estimated that the revised bidding approach could lead to an average tariff of around ₹2.81 per unit. If these estimates are achieved, the state could potentially save nearly ₹4,700 crore over the project period. Lower tariffs would also reduce the financial burden on the distribution company while ensuring an affordable power supply.

The Commission’s approval comes as MSEDCL continues to address several implementation challenges faced by earlier solar projects. The utility reported that administrative delays had slowed project approvals in many cases. The enforcement of the Model Code of Conduct during recent elections resulted in an estimated delay of eight to ten months for statutory clearances.

Environmental factors have also affected project timelines. Heavy monsoon rains disrupted construction activities in several locations, while forest clearance procedures took longer than expected in some areas. In addition, developers faced local issues such as Right of Way disputes and difficulties in accessing land required for project infrastructure.

Despite these challenges, MSEDCL has strengthened its monitoring mechanisms. By late 2025, the utility had successfully commissioned about 3,068 MW of solar capacity under various programs. It has also introduced a real-time digital portal to track project progress and monitor milestones more effectively.

To improve accountability, MSEDCL has issued notices to 84 developers for slow progress on their projects. The utility has warned that continued delays could lead to penal actions, including the forfeiture of bank guarantees.

The Commission also observed that the proposed procurement of 2,269 MW falls within the previously approved capacity limit of 18,835 MW for agricultural solarization in the state. By promoting the distributed renewable energy model, the state aims to complete the solarization of agricultural feeders by March 2026. This approach is expected to provide farmers with a reliable daytime power supply while helping the distribution utility reduce the overall cost of electricity procurement and increase the share of renewable energy in the state’s power mix.