Maharashtra’s solar bungle

State is punishing clean energy to save inefficient and corrupt utilities

Alok Tiwari

By all accounts, Maharashtra’s solar train was chugging along nicely. With 18 GW of installed solar and wind energy capacity, it ranks third, behind only Rajasthan and Gujarat. It overtook Tamil Nadu last year. Its total renewable power capacity has increased nearly 160% in the last decade. The state now produces about 40 million units of electricity daily through renewable sources. The renewables constitute a third of total energy mix with plans to take it to over half by 2030 and two thirds in another 10 years.

Then, suddenly Maharashtra started to apply brakes on solar generation. At least on some parts of it. While it remains supportive of pure play solar generation projects, it has stopped looking kindly at rooftop solar power. It has come up with several measures that seek to significantly increase cost for rooftop generators. The worst of these leave out small household installations for the moment, targeting larger ones of 10KW or more. These will mainly affect businesses and industry for whom rooftop generation was emerging as a major relief from state’s stiff power tariffs.

To begin with, Maharashtra imposed grid support charges of Rs 1.42 to Rs 1.96 per unit on such producers. These charges are not confined to surplus units fed into the grid but on entire generation, a bulk of which is consumed inhouse by the generator. Yes, rooftop plants do need the grid, and it is fair that they contribute towards its maintenance as well. But they already do so through paying basic fixed charges. Mahadiscom also takes their surplus power at dirt cheap rate and sells them at profit.

They pay the commercial or industrial rates for power they purchase from the grid. It would have made some sense if the charges were limited to units exported to the grid. Levying it on internally consumed units is akin to NHAI levying toll on an industry’s vehicles plying within its own premises because the plant relies on a nearby highway to get raw materials and send finished goods.

It does not stop there. A new policy is proposing an electricity duty, again on entire generation, not just on exported units. It is like levying GST on something you make and consume at home. Then there are other measures like meagre price that distribution utility, Mahadiscom, pays for surplus units generated by rooftop plants. At Rs 2.85/unit, it is way below what the utility charges the same consumers for the power it supplies to them. Government is also insisting that large rooftop plants deploy their own battery storage that will push up the cost significantly.

It has also started capping the sanctioned rooftop capacity to a consumer’s average consumption of last 12 months. This has restricted setting up of larger plants by households who may be planning to upgrade their lifestyle by having ACs and dishwashers or those wanting to buy EVs in future. Together these measures threaten to undo a decade of progress achieved by the state in moving towards clean power. They also threaten to jeopardize national greenhouse emission targets.

So why is the state doing it? The reasons are obvious. The state wants to protect the revenue of Mahadiscom and its generation sibling the Mahagenco. These are notoriously corrupt, inefficient and always bankrupt companies. They are bleeding money. To be fair, the growth in rooftop solar generation has hurt Mahadiscom. Many of its best consumers — the urban affluent and middle class, the big commercial complexes, and the industries — have all started paying it substantially less thanks to cheap solar power they generate and consume. For years they made up for Mahadiscom’s losses on account of power theft and subsidized farm sector. Now that gravy train is slowing down if not coming to a halt.

With the state in dire financial straits because of Ladki Bahin like schemes, it can no longer support power utilities. Maharashtra’s problem is real, but the remedy it has come up with is worse than the disease. Rooftop solar is a necessary and important component of future energy mix. By generating power at the point of consumption, it reduces expenditure on transmission infrastructure. It also reduces need for land for central solar plants as every building can potentially produce some power. Most importantly, it is a cheap and effective way of cutting greenhouse gases that imperil the very existence of humanity.

For Maharashtra to go this route is specially confusing. Chief Minister Devendra Fadnavis has taken personal interest in getting many large-scale new energy industries to Maharashtra, especially near his hometown Nagpur. It is strange for his government to promote manufacture of solar panels and batteries on the one hand and discourage their use on the other. If anything, his government should be encouraging as much rooftop solar generation as possible. As the ongoing geopolitical situation proves, reliance on imported fossil fuel keeps us vulnerable. Continued use of dirty coal is not an option because it is main reason behind India having the world’s worst air quality.

It is simply foolish to restrict new and clean industry to protect an old and polluting one. Instead, the state should be doubling down on more solar and wind generation. It should be encouraging every house and building owner to install as much solar capacity as possible and buy all their surplus power at attractive rates. With every sector of economy electrifying, power demand will explode. It will be a win-win for all.

The question of loss making discom and genco is real but that should be addressed by doing the hard work of improving distribution infrastructure and curbing theft. State requires Mahadiscom to supply virtually free power to farms. It must compensate the company separately for it. Mahagenco should also move from its old thermal plants towards new solar and wind plants with battery and pumped storage. Maharashtra deserves a forward-looking energy policy, not one that goes backward.

This column appeared in Lokmat Times on Apr 30, 2026