MERC Rejects MSEDCL’s Proposal to Levy Surcharge on Rooftop Solar

MSEDCL had also proposed adoption of gross metering for rooftop solar

September 14, 2018


The Maharashtra Electricity Regulatory Commission (MERC) has rejected the proposal made by Maharashtra State Electricity Distribution Company Limited (MSEDCL) to approve the levy of additional surcharge (wheeling charges) for rooftop solar projects in the state.

The MERC was reviewing a petition filed by MSEDCL.

According to MSEDCL, it is required to keep the entire generation, transmission and distribution capacity available for rooftop consumers, even if they consume power from the rooftop system. MSEDCL had proposed to levy wheeling charges on rooftop energy consumption so that the burden of under-recovery does not get passed on to other consumers.

In its petition, MSEDCL had submitted that it has been allowing net metering in its area of supply to eligible consumers as per the MERC (Net Metering for Roof-top Systems) Regulations 2015. MSEDCL submitted that in general the rooftop systems are preferred by consumers if their consumption falls in the higher tariff bracket.

Per MSEDCL, rooftop net metering system brings these consumers from subsidizing to subsidized category which adversely impacts the cross-subsidy balance in tariff. As a result, the financial impact gets passed on to common consumers who cannot afford such rooftop systems. On the other hand, gross metering systems will not have impact on the low-end consumer tariffs. It has been observed that the installations of rooftop system are growing exponentially and therefore it will certainly have an impact of MSEDCL’s revenue and tariff of MSEDCL’s cross subsidized consumers will have to be drastically increased to meet the revenue requirement.

MSEDCL had also proposed adoption of gross metering for rooftop solar.

While reviewing the petition, MERC observed that the issue is specifically linked to the provisions stipulated under the MERC (Net-Metering for Solar-Rooftop Photo Voltaic System) Regulations, 2015 and that entails modification and review of net metering framework through due regulatory consultation process. With this, the MERC dismissed MSEDCL’s proposal to levy surcharge on rooftop solar PV.