Burdensome Regulations and Delays Jeopardize Telangana’s Solar Open Access Projects

Developers say they face a host of challenges that are threatening project feasibility in the state


At a time when solar open-access installations are gaining traction across the country, developers with small-capacity projects in Telangana say the inordinate delay in adhering to regulatory frameworks by distribution companies (DISCOMs) is creating bottlenecks.

From tedious and time-consuming long-term open access (LTOA) renewal process to generator-end power quality challenges to partial payments for unutilized banked energy, the state’s solar open access developers cite a long list of problems that are threatening the feasibility of their projects.

They also complain that their solar open-access generators are being asked to furnish consumer-end power quality tests, even in the absence of any guidelines for testing and approved testing agencies. They said other states do not insist on such tests.

Solar open access has gained ground in many states in recent years. India achieved a record-breaking annual installation of solar open access, adding 3.2 GW, in the calendar year 2023, according to the 2023 Q4 & Annual Mercom India Solar Open Access Market Report.

As of December 2023, the cumulative installed solar capacity in the open access segment reached 12.2 GW.

But Telangana is considered a laggard, given the reluctance of the state’s DISCOMs for fear of losing high tariff-paying consumers and a policy regime unfavorable to the growth of open access installations.

Last October, the Telangana State Electricity Regulatory Commission increased the additional surcharge for open access consumers to ₹1.98 (~$0.0237)/kWh, a whopping 408% increase over the first half of the financial year 2023-24, for the second half of the year. However, this was brought down to ₹1.40 (~$0.0168)/kWh for the first half of FY 2025, providing some relief to open-access developers.

According to Mercom India’s report, the state has 328.5 MW of cumulative open-access solar capacity, with the government-owned Singareni Collieries owning about 200 MW of the projects and private players operating the rest. Most of the solar open-access projects in the state are under 10 MW, with the average capacity being 3-4 MW.

One of the biggest challenges solar open-access generators face in Telangana is the inordinate delay in processing LTOA renewal applications. “According to the regulations, these applications must be disposed of in 30 days. But it is taking up to 4-5 months, even after close follow-ups by generators,” said a solar open access developer.

“We can understand if the application is for fresh LTOA, but renewal applications need not take long since all the authorities already have the required information,” he said.

Developers also complain that DISCOMs were issuing de-energization letters for not adhering to Technical Standards for Connectivity to the Grid (Amendment) Regulations, 2013. In these regulations, the section applicable to wind generating stations and generating stations using inverters outlines certain harmonics, direct current injection, and flicker requirements.

“Under these regulations, the responsibility for adhering to voltage harmonics limits is not within the scope of solar and wind generators who, take voltage as a reference from the grid. Solar generators depend on utilities for the quality of power supply,” according to a solar open access developer.

The power electronic converters support the injection of current harmonics in the grid, which leads to potentially unacceptable load voltage distortion. To address this, the IEEE 519 guidelines specify the maximum allowable voltage distortion and current harmonics injected by the converter at the generating unit. The power variations in generating units result in voltage flicker at the load bus, which can be corrected by reactive power compensation.

“The IEEE standard clearly outlines that the utility and generator’s joint responsibility is to ensure the electrical system harmonics are within the limits. Utilities must install harmonic filters, which they have not done,” the developer said.

Moreover, for solar generators, the non-generation hours are from 18:00 hrs to 06:00 hrs, and the harmonics recorded during this period are attributable to the supply from the utilities and not the solar generators. Telangana solar open access developers say other states only consider the levels of the recorded harmonics during the generation hours.

Another pain point for Telangana’s solar open-access developers is the mandate to get power quality tests from the consumer. “These tests have no precedence, and no prescribed vendors are available in the market,” according to Sidharth Balda, Director, EnerSol Infra, a Hyderabad-based solar open access developer with a 2 MW project..

Contrary to the regulation, developers also claim that the DISCOMs only make partial payments for unutilized banked energy. According to TSERC Regulation 1 of 2017, unutilized banked energy is to be considered as deemed purchase by DISCOMs at the Average Pooled Power Purchase Cost determined by the Telangana State Electricity Regulatory Commission. This regulation implies that generators should receive payments for unutilized banked energy at 100% of the Average Pooled Power Purchase Cost.

The two Telangana DISCOMs, Southern Power Distribution Company, and Northern Power Distribution Company were rated C- in 2022 and 2023 but slightly improved to C in 2024, according to the Twelfth Annual Integrated Ratings brought out by the Ministry of Power.

It is learnt that the developers’ association wrote to the Telangana State Southern Power Distribution Company (TSSPDCL) seeking redressal of their complaints and wanting fair treatment and adherence to regulatory frameworks to enable the smooth functioning of the electricity sector.