The Bombay High Court has stayed the Maharashtra State Electricity Distribution Company’s (MSEDCL) restriction on the use of banked renewable energy to solar hours.

It ruled that the older multi-year tariff (MYT) framework, allowing renewable energy use anytime except during peak hours, would hold.

The court had earlier issued an interim judgment, staying the Maharashtra Electricity Regulatory Commission’s (MERC) review order restricting banked renewable energy usage to the same time-of-day slot and solar hours.

The High Court rejected MSEDCL’s argument that the old rules could not automatically revive after its stay on the MERC review order.

The MERC order had come under severe criticism from solar project developers, who contended that the energy banking rules could effectively reduce the savings generated from a solar project and disincentivize solar adoption for MSEDCL consumers.

Background

The petitioner, the National Solar Energy Federation of India, filed writ petitions in the Bombay High Court, challenging MERC’s banked renewable energy usage review order.

It argued that the revised limitations on the use of banked solar power at the same time-of-day slot defeated the purpose of power banking. It also submitted that these changes in power banking would extend to existing open access agreements and long-term transmission contracts, despite settled law that such changes must apply prospectively.

It contended that the new banking restrictions only applied to MSEDCL consumers, while those of Tata Power and Adani Electricity’s distribution companies remained unaffected.

The court issued interim orders on July 1, 2025, and August 8, directing that the mandate from MERC not be given effect.

Later, the petitioner approached the High Court for relief, claiming that as of July 25, MSEDCL continued to credit renewable energy only during solar hours. It argued that MSEDCL’s actions violated the High Court’s orders and also the original order on the framework, which allowed banked renewable energy usage at any time except during peak hours.

MSEDCL argued that while billing was done for solar hours, the surplus units were not lapsed. This complied with the court’s directions. It also contended that the High Court’s staying of the MERC order did not revive the original MYT order.

Court’s Analysis

The High Court held that its previous judgments considered the reading of the original MYT’s order. It stated that its orders meant reverting to the previous position, allowing the use of banked renewable energy at any time except during peak hours.

It directed that the billing would be done under the provisions of the original MYT framework order. The petitioners would be at liberty to pay the July 25 bill to MSEDCL under protest.

However, the High Court stated that the order on the writ petitions, which is yet to be issued, would apply to the petitioners.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.