Maharashtra's power tariff proposal threatens solar companies

Maharashtra is considering a new power tariff proposal that could significantly impact solar energy companies. The plan involves changing the time-of-day (TOD) pricing system, which enables solar producers to store excess power and take it back later. This revision could make it harder for solar companies to operate profitably. Under the new proposal, power generated between 9 am and 5 pm would be priced the lowest. Solar companies are worried that this change would eliminate the ability to "bank" power, meaning they wouldn't be able to resell the excess power during peak demand hours. Currently, power banked during peak solar hours can be accessed nearly anytime, except for certain peak demand hours from 6 pm to 10 pm. The Maharashtra State Electricity Distribution Corp. Ltd (MSEDCL) submitted this proposed change in its tariff plan to the Maharashtra Electricity Regulatory Commission (MERC), which hasn't made a decision yet. The National Solar Energy Federation of India (NSEFI) expressed strong concerns, saying the changes would disrupt the current system and harm solar producers' rights. Many solar companies and data center operators oppose the proposal, worried it could drive up energy costs. A senior executive at a solar firm noted that without banking, it would be difficult to maintain contracts and could destabilize their business. They emphasized the importance of banking in solar generation, which is not consistent throughout the day. On the other hand, some power companies that do not only produce solar energy support the proposal. They argue that encouraging energy use during peak solar hours makes sense from a supply and demand perspective. MSEDCL's proposal is based on expectations of increased solar power generation in the state, aiming to manage its overall power procurement costs effectively. Currently, solar power represents just under 10 gigawatts of Maharashtra’s total capacity of about 49.5 gigawatts. MSEDCL anticipates adding 20 gigawatts of solar power in the coming years, underscoring the stakes involved in the proposed changes.