MERC (Maharashtra Electricity Regulatory Commission) recently released the draft Net-metering regulations.

In our opinion, these regulations are unlikely to enable large scale development of roof-top solar projects in the state. This is because several best-practices observed in the regulations of other states are missing for the draft regulations of Maharashtra.

 – The draft regulations are silent on the applicability of cross-subsidy and other open access charges. Other states (eg. Rajasthan) exempt rooftop project from such charges. A significant growth in roof-top projects will come from projects developed by investors where power is consumed by the host consumer. Without a clear exemption, this model is unlikely to take off in Maharashtra.

– The draft regulations provide no clarity on the ability of obligated entities to meet their solar RPO from rooftop projects. Without a clear provision addressing the same, obligated entities are unlikely to jump in.

– The draft regulations require the Discom to purchase only upto 10% of the total generation remaining unadjusted at the end of the year, and pay on the APPC price on this. This may result in some power going free to the Discom. However, during the year, extra power generated will be allowed to be carried forward without limits to the next month – this is a favorable provision.

– Rooftop projects will not be allowed to go under the REC mechanism

 The draft regulations, and a related report can be accessed here. Comments are due to March 31, 2015.