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MERC Fixes Rooftop Solar Export Rate at INR 2.82/kWh, Continues Auction-Based Tariffs for New RE Projects

The Maharashtra Electricity Regulatory Commission (MERC) has determined that surplus electricity generated from rooftop solar systems and exported to the grid will be compensated at INR 2.82/kWh for FY 2026–27. At the same time, the regulator has reaffirmed that tariffs for most new renewable energy projects in the state will continue to be discovered through competitive bidding rather than predefined rates.

In its latest order, MERC clarified that no standard (generic) tariff will be issued for upcoming utility-scale projects across solar, wind, biomass, hybrid, and co-generation segments. Developers will instead be required to participate in competitive auctions conducted under central guidelines, with the Commission adopting the final discovered tariffs. This move reflects the growing maturity of the renewable energy sector, where market-driven pricing has consistently resulted in more competitive rates.

The INR 2.82/kWh tariff will apply to surplus rooftop solar power exported under net metering and net billing arrangements across all distribution companies in Maharashtra, including MSEDCL, BEST, Tata Power, and Adani Electricity. The rate, effective from April 1, 2026, has been derived from the lowest tariff previously approved under the Mukhyamantri Saur Krishi Vahini Yojana 2.0.

MERC emphasized that rooftop solar installations are primarily intended for self-consumption and reducing electricity expenses. It noted that offering higher compensation for surplus power could shift the focus toward profit generation, thereby increasing procurement costs for distribution companies and ultimately impacting non-solar consumers through higher tariffs.

The Commission also declined a proposal from MSEDCL to reduce the surplus tariff to INR 2.24/kWh, stating that the suggested benchmark had not yet been formally adopted. As a result, the existing rate of INR 2.82/kWh has been retained for the upcoming financial year.

For projects operating under gross metering—where all generated electricity is supplied to the grid—MERC has specified the Average Power Purchase Cost (APPC) for various utilities. These include INR 5.40/kWh for MSEDCL, INR 6.65/kWh for BEST, INR 6.01/kWh for Tata Power Distribution, and INR 5.11/kWh for Adani Electricity Mumbai Distribution, while Adani Electricity SEEPZ has an APPC of INR 2.85/kWh.

Additionally, while new biomass and co-generation projects will shift to competitive bidding, MERC continues to regulate variable charges for existing projects under older agreements. For FY 2026–27, the variable charge has been set at INR 6.85/kWh for biomass projects and INR 5.29/kWh for bagasse-based co-generation units. The Commission has also maintained a 5 percent annual fuel cost escalation factor, in line with its existing regulations, rejecting requests for revision.

With these decisions, MERC has reinforced a market-oriented approach to renewable energy pricing while ensuring stable compensation mechanisms for rooftop solar consumers and legacy renewable energy projects.