India’s solar open access market recorded 55% quarter-over-quarter growth in Q1 2026, adding 2.7 GW, supported by favorable regulatory developments, proactive state-level policies, growing consumer awareness, and improved project execution across key markets.

According to Mercom’s recently released Q1 2026 India Solar Open Access Market Report, installations could have been significantly higher if not for regulatory changes in states such as Maharashtra, grid constraints, and supply-side bottlenecks.

Maharashtra and Tamil Nadu, in particular, recorded weaker installation activity during the quarter, despite continued interest from commercial and industrial (C&I) consumers seeking renewable energy solutions to reduce electricity costs and meet sustainability targets.

Banking and ToD Reforms Weigh on Maharashtra

In Q1 2026, solar open access installations in Maharashtra fell by 81% quarter-over-quarter and 61% year-over-year. While the state led installations in the previous quarter, it ranked eighth in Q1. Maharashtra continues to be one of India’s largest solar open access markets, but the revised energy banking rules and the time-of-day (ToD) tariff framework have slowed consumer decision-making and encouraged a shift toward smaller, load-matched power purchase agreements (PPAs).

The revised banking framework has materially altered project economics by limiting consumers’ ability to maximize the value of surplus solar generation. This has reduced the earlier flexibility available to consumers with evening or night-time demand and weakened the value of surplus daytime solar generation.

The impact is expected to be more pronounced among mid- and large-scale C&I consumers, as the new rules extend project payback periods and reduce the attractiveness of open access solar projects.

The new ToD tariff structure is further reshaping procurement strategies and project sizing decisions. There are significant savings for consumers who use power during the 09:00 to 17:00 solar generation window, with high-tension (HT) industrial consumers being the biggest beneficiaries. Consumers who can shift the load to daytime hours stand to gain, but those with evening, night, or seasonal demand profiles may see weaker savings from standalone solar.

Project and PPA structuring are therefore expected to become more conservative. Developers are likely to prioritize offtakers with stable daytime demand, stronger credit profiles, and better load predictability.

Together, the banking and ToD reforms have shifted the market away from aggressive capacity procurement toward more conservative, demand-aligned projects, contributing to slower installation activity during the quarter.

Despite near-term challenges, Maharashtra’s long-term policy framework continues to support the adoption of renewable energy and storage-backed power procurement.  The state’s Renewable Energy and Energy Storage Policy also targets 5 GW of green open access capacity by FY 2030 and 10 GW by FY 2036, indicating continued policy support for corporate renewable energy procurement and long-term open access market growth.

The market is gradually shifting from standalone solar projects toward storage-backed and hybrid procurement models. From April 2026, new renewable energy projects above 100 kW are expected to integrate energy storage capacity equivalent to 50% of project capacity for a minimum of two hours. This requirement is expected to help consumers better manage ToD-related costs, improve self-consumption, and utilize solar generation during higher-value demand periods, although adoption will depend on battery costs and commercial viability.

Demand from industrial consumers and the growing number of data centers are also expected to support future market expansion.

Tamil Nadu Open Access Slowdown

Tamil Nadu’s solar open access installations declined sharply in Q1 2026, falling by around 74% quarter-over-quarter and 58% year-over-year. The state accounted for only a modest share of quarterly capacity additions, ranking seventh among all states. Notably, open access projects accounted for 100% of the large-scale solar capacity commissioned in the state during the quarter.

The sharp decline in installations reflects the combined impact of tighter banking provisions and higher landed costs for open access power.

Tamil Nadu notified the Green Energy Open Access (GEOA) Regulations, 2025, which tightened energy banking provisions by restricting banking to the same time-of-day slot and billing cycle, imposing an 8% banking charge, and requiring surplus energy to be sold at 75% of the applicable tariff.

These measures reduced the value of surplus generation, lowered the benefits of energy banking, and weakened the economics of projects for both captive and third-party consumers.

Combined with relatively high transmission charges and additional surcharges, these changes narrowed the savings available under open access models and prompted many consumers to reassess project sizing, procurement strategies, and investment timelines, contributing to weaker installation activity during the quarter.

However, the GEOA Regulations also brought solar, wind, hybrid, and other renewable energy sources under a unified framework for HT and EHT consumers. The regulations introduced a single-window approval mechanism for connectivity and open access applications, which is expected to support broader adoption of renewable energy through streamlined third-party and captive procurement models.

While Maharashtra and Tamil Nadu experienced slower installation activity due to evolving regulatory frameworks, both states remain among India’s most important solar open access markets because of their large industrial bases and strong C&I demand. Their experience highlights a broader trend emerging across the country – policymakers are increasingly prioritizing grid management, demand matching, and system stability alongside renewable energy growth. As a result, the market is gradually shifting toward optimized project sizing, higher self-consumption, and greater adoption of storage-backed and hybrid renewable energy solutions.

Mercom’s solar open access tracker provides comprehensive details on commissioned and pipeline projects across the country, including captive, group captive, third-party sale, and solar park projects.