MERC Approves Tariff Adoption for 2.27 GW Distributed Solar Power Procurement in Maharashtra

The Maharashtra Electricity Regulatory Commission (MERC) has adopted the discovered tariffs for 2,269 MW of distributed solar capacity procured by the Maharashtra State Electricity Distribution Company (MSEDCL). The procurement, conducted under the Mukhyamantri Saur Krushi Vahini Yojana (MSKVY) 2.0, yielded a discovered tariff range of ₹2.24/kWh to ₹2.90/kWh. MSEDCL’s submission indicates a weighted average tariff of ₹2.825/kWh for the capacity, which is intended for agricultural feeder solarization.

Key Order Metrics Fact-Sheet

Regulatory Order and Petition Context

MSEDCL filed the petition for tariff adoption under Section 63 of the Electricity Act, 2003, with MSEB Solar Agro Power Limited (MSAPL) serving as the nodal agency. The Commission noted that the current approval addresses a cumulative shortfall of 2,832 MW within the state’s agricultural feeder solarization framework. This deficit includes 1,921 MW in uncontracted capacity and a 911 MW gap resulting from incomplete projects from the earlier MSKVY 1.0 phase.

Procedural records indicate that 1,352 MW of capacity from the earlier MSKVY 1.0 phase was officially cancelled in November 2025. This followed a developer’s voluntary withdrawal from the program after the bidding process was finalized. The current procurement of 2,269 MW falls strictly within the previously approved 18,835 MW framework capacity.

MSKVY 2.0: Scheme Objectives and Technical Deviations

The MSKVY 2.0 framework aims to provide reliable daytime power to agricultural consumers while reducing the technical and financial burden of electricity subsidies. MERC approved two critical technical deviations: delinking the tender from Central Financial Assistance (CFA) under PM-KUSUM and transitioning from DCR (Domestic Content Requirement) to non-DCR modules. The shift to non-DCR modules leverages a significant price gap in the global supply chain, which MSEDCL estimates will generate savings of approximately ₹47 billion.

The regulatory order also acknowledges an exemption from ALMM List II requirements for solar cells for projects with bid submission deadlines on or before August 31, 2025. This exemption was accorded to mitigate supply chain delays and reduce overall project costs for distributed solar developers. The Commission noted that these technical adjustments helped in discovering more competitive tariffs during the e-reverse auctions conducted across 257 substations.

Successful Bidders and PPA Directives

Successful developers are eligible for a performance incentive of ₹0.25/kWh for three years, provided they commission at least 75% of contracted capacity before the scheduled date. As of November 2025, approximately 2,229 MW of the state’s total distributed solar framework had already been commissioned. MERC has directed all successful bidders to execute Power Purchase Agreements (PPAs) within 30 days of the regulatory order issuance.

MSEDCL is required to submit the finalized PPAs to the Commission to verify alignment with Renewable Purchase Obligations (RPO) and Distributed Renewable Energy targets. These distributed projects will inject electricity directly into 11 kV or 22 kV busbars to facilitate local load management for agricultural feeders. The Commission stated that these measures ensure prompt project implementation and long-term grid stability for the state’s agricultural sector.

Official Sources and Regulatory Reports

1. Maharashtra Electricity Regulatory Commission (MERC) – 2.27 GW Solar Procurement Order
   • Source: Mercom India
   • Hyperlink: https://www.mercomindia.com/maharashtra-regulator-approves-tariffs-to-procure-2-27-gw-of-solar-power
2. MERC Order on FY 2026–27 Rooftop Solar Surplus Tariff (₹2.82/kWh)
   • Source: Energetica India Magazine
   • Hyperlink: https://www.energetica-india.net/news/merc-sets-rooftop-solar-surplus-tariff-at-inr-282kwh-retains-competitive-bidding-for-new-re-projects
3. Maharashtra Regulator Approval for 2,269 MW Solar Power Procurement
   • Source: Megaproject
   • Hyperlink: https://megaproject.com/news/powerplant/maharashtra-regulator-approves-2269-mw-of-solar-power-procurement
4. MERC Grid Support Charges and Time-of-Day (ToD) Tariff Order
   • Source: ETEnergyworld (The Economic Times)
   • Hyperlink: https://energy.economictimes.indiatimes.com/news/renewable/maharashtras-new-solar-grid-charges-threaten-clean-energy-transition/130034685
5. Official Impact Analysis: Peak Power and ToD Tariff Changes on Open Access
   • Source: CARE Ratings
   • Title: Peak Power Costlier, Solar Cheaper: MERC’s ToD Changes Hit Open Access
6. Regulatory Approval for Surplus Rooftop Solar Tariff (FY27)
   • Source: BioEnergy Times
   • Hyperlink: https://bioenergytimes.com/merc-sets-rs-2-82-kwh-tariff-for-surplus-rooftop-solar-in-fy27/