The Punjab State Electricity Regulatory Commission (PSERC) has issued the draft Punjab State Electricity Regulatory Commission (Grid Interactive Rooftop Solar Photo Voltaic Systems) (Third Amendment) Regulations, 2026, seeking to significantly liberalize the state’s rooftop solar framework.

The draft proposes amendments to the 2021 Rooftop Solar Regulations and their first and second amendments, with changes covering metering arrangements, eligibility norms, capacity limits, and settlement mechanisms.

Background

The Commission noted that while the Grid Interactive Rooftop Solar PV Systems Regulations were first notified in 2021 and subsequently amended in2024 and 2025 to align with the Electricity (Rights of Consumers) Rules, 2020, and the Supply Code, 2024, several provisions continued to restrict rooftop solar deployment.

Stakeholder feedback indicated that several provisions in the existing framework were acting as barriers to rooftop solar deployment.

The Ministry of New and Renewable Energy (MNRE) and other stakeholders highlighted restrictions such as the cap that limited rooftop solar generation to 90% of a consumer’s consumption during a settlement period and capacity limits that allowed installations of only up to 70% of sanctioned load or contract demand for certain categories of consumers.

The absence of a regulatory framework for group net metering and virtual net metering was also identified as a key gap, as it excluded consumers without suitable rooftop space, including tenants, apartment residents, and consumers with multiple service connections.

The Commission also took note of projected Renewable Purchase Obligation (RPO) shortfalls for Punjab State Power Corporation (PSPCL), estimated at 5,249 million units in the financial year (FY) 2026–27, 1,861 million units in FY 2027–28, and 4,755 million units in FY 2028–29, reinforcing the need to expand distributed solar capacity within the state.

Commission’s Analysis

After examining stakeholder inputs and the state’s renewable energy requirements, PSERC proposed a series of structural changes to remove bottlenecks and broaden participation in rooftop solar.

The draft introduces three new consumption and settlement models: Group Net Metering (GNM), Virtual Net Metering (VNM), and Behind-the-Meter (BTM) solar systems, each with defined eligibility conditions and energy settlement mechanisms.

Under the proposed framework, rooftop solar capacity can be installed up to 100% of the sanctioned load or contract demand, replacing the earlier restrictive thresholds.

The Commission has also proposed removing the 90% annual consumption cap on solar generation. Unadjusted surplus energy at the end of a settlement period would be settled at 75% of the feed-in tariff approved by the Commission, with payments due within 30 days.

Delays would attract interest linked to the State Bank of India’s one-year Marginal Cost of funds-based lending rate. The draft provides exemptions from banking charges, cross-subsidy surcharge, and additional surcharge for certain rooftop solar arrangements, while clarifying that wheeling charges and losses would apply where relevant.

Consumers would be permitted to choose only one metering arrangement, and existing prosumers would be allowed to migrate to GNM or VNM through new agreements.

The Commission clarified that no tripartite agreement among the distribution licensee, the consumer, and the renewable energy service company would be permitted, and that disputes between consumers and RESCOs would not affect grid connectivity.

Recently, PSERC proposed amendments to the Punjab State Electricity Regulatory Commission (Harnessing of Captive Power Generation) Regulations, 2022, with a specific focus on energy banking by renewable energy–based captive generating projects.

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