The Maharashtra Electricity Regulatory Commission has eliminated the ability to time-shift solar generation beyond its production window by restricting energy banking to the same time-of-day (ToD) slot, fundamentally altering the viability of projects for C&I consumers installing solar.

The move shifts the system away from grid-enabled flexibility toward asset-level balancing, where storage becomes central. With ToD tariffs reinforcing this transition, renewable integration is increasingly being driven by price signals and physical infrastructure rather than regulatory mechanisms.

Dismantling Project Design
Amit Rane, Founder and Managing Director at Wudmin Energy, explains how that flexibility has progressively eroded. Solar banking once enabled utilization for nearly 20 hours, which was reduced to 17 hours after the July 2025 court order. With the latest provision, energy banking is confined to the same time slot, effectively limiting usable generation to about eight hours between 9:00 am and 5:00 pm.
Earlier regulatory proposals to restrict banking had triggered industry pushback, with developers warning that narrowing adjustment windows would directly erode savings. The current framework validates those concerns by eliminating the ability to align solar generation with high-value evening consumption.

Projects commissioned before March 31, 2025, were explicitly designed to offset night-time demand through banking. With that mechanism removed, a significant portion of the generation is now stranded.
Rane estimates that nearly 45% of the electricity generated by such systems goes unused, effectively rendering a similar proportion of installed capacity redundant.

Shrikant Soni, DGM Business Development at Kalpa Power, adds that the impact is already visible in project economics. Banking restrictions have increased the cost of optimizing renewable energy usage, with project payback periods rising by 8 to 10 months and project capacity utilization dropping by up to 40%.

Financial Stress
Rane notes that the shift from 17 hours of utilization to eight hours is now being charged back to consumers, effectively rewriting project economics after capital has already been deployed. For debt-funded assets, this creates a mismatch between fixed repayment obligations and declining savings.

This concern echoes earlier disputes in Maharashtra, where banking restrictions were challenged in court for altering investment assumptions mid-cycle. The current order reintroduces that risk at scale, compressing returns while increasing uncertainty around regulatory predictability.

The result is reduced utilization on the one hand and unchanged financial commitments on the other, significantly weakening project viability.

Storage: The New Economic Backbone

With banking no longer providing flexibility, storage is moving from an optional add-on to a necessity requirement. The policy reinforces this by mandating storage integration at 50% of renewable capacity, with a minimum of 2 hours of storage, and by tying incentives to 4-hour configurations.

“Storage is here to stay,” Rane says, more as a response to regulatory change rather than a technological upgrade.

The cost implications are substantial. Storage systems cost between ₹15 million (~$160,847)/MWh and ₹20 million (~$214,462)/MWh, or about ₹15,000 (~$160)/kWh to ₹20,000 (~$213)/kWh. At the system level, this translates to an additional ₹30,000 (~$320)/kW to ₹40,000 (~$426)/kW of renewable capacity, effectively doubling project capital expenditure.

ToD tariffs further support the economics of storage. Evening tariffs of approximately ₹11.9 (~$0.127)/kWh, compared to ₹9.3 (~$0.099)/kWh during the day, create a clear arbitrage opportunity.

Rane estimates that battery-backed supply can generate about ₹4.3 (~$0.046)/kWh in additional value by shifting energy to peak periods.

System Design Shifts

With banking removed, projects must now align closely with consumption patterns within specific time windows rather than optimizing for total generation.

Rane says consumers must either invest in storage, accept wastage, or pay for unused energy.

This shift forces a redesign of systems around peak demand. Evening consumption, previously offset by banking, must now be addressed directly through storage.

For instance, a consumer with 1,000 kWh of demand between 5 pm and midnight would need storage capable of delivering sustained output over that period, such as 150 kW at 600 kWh for a four-hour backup, or 1.05 MWh for extended discharge.

Soni adds that operational inefficiencies are already emerging. With restrictions on ToD adjustments, suboptimal utilization of banked energy is becoming more frequent. Consumers who previously relied on banking to offset nighttime consumption are now seeing that benefit lapse.

In such cases, excess generation must be stored and deployed in higher-tariff zones, particularly the D zone, to preserve its value.

Capacity Discipline Replaces Banking Flexibility

Nilesh Mahajan, CEO and Director at Roofsol Energy, describes the shift as a move from banking-led optimization to capacity discipline.

According to him, consumers are now being pushed to size solar installations strictly based on their daytime consumption, eliminating the earlier practice of oversizing systems and relying on banking to balance usage. While banking remains available in limited cases, it is no longer a viable tool for most larger systems.

This shift imposes a constraint on system design, particularly for consumers with variable load profiles. Instead of using banking to correct mismatches between generation and consumption, they must either reduce installed capacity or invest in storage to maintain utilization.

Soni notes that demand for solar remains intact, but procurement strategies are evolving. The focus is moving away from pure cost arbitrage toward reliability and controllability, with hybrid solutions playing a more central role in how consumers structure their energy portfolios.

Hybrid Models Redefine the Market

As banking loses relevance, developers are rapidly transitioning toward solar-plus-storage solutions that internalize flexibility. This shift is already reshaping how energy is supplied to consumers.

Mahajan notes that developers are no longer just providing daytime solar power but are increasingly offering bundled solutions that include peak-hour supply. This effectively transforms solar from a generation asset into a dispatchable energy resource.

Soni reaffirmed this trend, pointing out that banking is becoming less effective as a tool for flexibility. Storage and hybrid systems, on the other hand, provide greater predictability and control over energy use, making them more suitable for the changing regulatory environment.

While this transition creates new opportunities, it also introduces short-term disruption. Installations have already been declining amid regulatory uncertainty, suggesting that the market may take time to stabilize under the new framework.

A high-stakes Transition

The combined impact of reduced utilization, higher capital costs, and retrospective adjustments places significant pressure on smaller enterprises.

Rane warns that these changes could push SMEs and MSMEs to the brink, as projects developed under earlier assumptions now face declining returns and require additional investment. The broader concern is that such shifts may erode investor confidence in a market where policy stability is critical for long-term capital deployment.

Soni suggests that some flexibility could help ease this transition. Allowing banking between 6 am and 6 pm, he says, would provide a 12-hour window that could improve solar utilization without overburdening the grid.

Maharashtra’s banking reforms represent a shift that moves the burden of flexibility from the grid to the asset and resets how solar projects are designed and financed. Developers will have to rework project economics around storage and stricter capacity discipline. For C&I consumers, this is not straightforward. Most are not set up to manage this level of complexity and are focused on lowering power costs. Adoption will depend on how well developers and solution providers package integrated, turnkey solutions that deliver savings without requiring consumers to manage the complexity.