Maharashtra’s Solar Association Alleges Mismanagement of Solar Subsidies by DISCOM

In a strongly-worded note, the association cited several problem areas in MSEDCL’s approach

September 25, 2020


The Maharashtra Solar Manufacturers Association (MASMA) has expressed its displeasure with the way Maharashtra State Electricity Distribution Company Limited (MSEDCL) has been handling the state’s solar sector.

The association has accused the DISCOM of depriving Maharashtra of the centre’s solar subsidy while dissuading the use of solar energy entirely.

According to MASMA, the state DISCOM requested for only 25 MW capacity, amounting to ₹310 million (~$4.1 million) in subsidies from the Ministry of New and Renewable Energy (MNRE) for the whole state. The association further alleged that the DISCOM hasn’t yet distributed the subsidy amount.

Meanwhile, DISCOMs from Gujarat – a state half the size of Maharashtra, received a subsidy for 600 MW, amounting to ₹7.5 billion (~$101 million).

The association claims to have met the Maharashtra Energy Minister, Nitin Raut, with their grievances. When asked for an explanation by the energy minister, the DISCOM replied that they do not have a proper portal and training for the subsidy disbursement process.

The association has alleged that the DISCOM did not disclose the fact that the MNRE had allowed MSEDCL to involve Maharashtra Energy Development Agency (MEDA), for distributing the subsidy since it has the required portal and experience.

Although Raut had instructed MSEDCL to disburse the subsidy on a war footing, MASMA alleges that the DISCOM did not start the due process.

Again the association approached Raut, who arranged a webinar on May 27, 2020, at Vidyut Bhawan.

MSEDCL informed in the webinar that it would shortly start the empanelment process, while MASMA requested the minister to empanel MEDA as registered integrator to avoid further delay.

The minister instructed MSEDCL, MEDA, and MASMA to form a joint committee and work together for faster and efficient implementation of solar policies. He also instructed MSEDCL and MEDA to restart the subsidy process immediately.

Eventually, on August 28, 2020, MSEDCL issued an expression of interest (EoI) to initiate the empanelment process. However, the solar association alleges glaring errors in the EoI, which the DISCOM rectified on the last day of bid submission (September 17, 2020).

The association listed several issues in the EoI, such as mandatory electrical contractor license, which around 95% of the players in the solar industry do not have, according to the solar body. The association claims that instead of working on a first-come-first-serve basis, the DISCOM had divided the 25 MW subsidy for Maharashtra into zones.

Besides this, other pressing concerns of the solar association were regarding MSEDCL’s insurance terms, performance ratio, work allotment, and other technical details.

It demanded an immediate pre-bid meet to clarify all queries and implement suitable amendments following an eight-day extension for bid submission. The association has made a passionate appeal claiming that several of its members are on the verge of bankruptcy.

When Mercom contacted MSEDCL, the DISCOM stated that they would hold a pre-bid meeting on September 25, 2020, where all the association members would be invited, and the DISCOM would address their grievances.

In July, Mercom reported that MSEDCL had asked all superintending engineers in its operations and maintenance circles to adhere to the prescribed time limits for approving rooftop installation applications. All superintending engineers were directed to process the rooftop solar applications only through the online portal within the time limit prescribed by the Maharashtra Electricity Regulatory Commission.

Maharashtra is infamous for its obstructive rooftop solar regulations. In January, the DISCOM proposed considerable grid support charges for net metering rooftop solar systems with a capacity of over 10 kW. This was believed to be a significant development that could have huge implications on the state’s rooftop solar segment. However, later, the MERC decided not to levy any grid support charges on rooftop solar installations until the cumulative rooftop capacity of the state reaches 2 GW.

According to Mercom’s India Solar Market Update, Maharashtra currently has rooftop solar capacity of around 260 MW. The state features in the third position after Gujarat and Rajasthan and accounts for 9% of the total rooftop solar installations in the country.

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.