India’s Rooftop Solar Growth Faces New Challenge as States Revise Grid Charges

• Maharashtra introduces Grid Support Charges for rooftop solar users.
• Karnataka cuts buyback tariff and limits new rooftop solar capacity.
• New policies may extend rooftop solar payback period to 7–9 years.

India: Rooftop solar users in India could soon face higher electricity costs as Maharashtra and Karnataka introduce new policies affecting the economics of solar power. While the Central Government continues to promote rooftop solar through the PM Surya Ghar Muft Bijli Yojana, the latest state-level reforms may increase electricity expenses by 20–30% for many commercial and industrial consumers.

The changes, announced for implementation in FY27, are expected to make rooftop solar investments less financially attractive in these states.

The revised rules are significant because rooftop solar has been one of the key drivers of India’s clean energy transition. Industry estimates suggest that projects which earlier recovered their investment in around four years may now take seven to nine years, particularly in Maharashtra. Experts believe these policy changes reflect the growing challenge of balancing renewable energy expansion with the financial sustainability of electricity distribution companies.

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Maharashtra has introduced a Grid Support Charge (GSC) of ₹1.96 per unit in FY27, which is scheduled to increase to ₹2.32 per unit by FY30. Unlike previous charges, this levy applies to the total electricity generated by rooftop solar systems, including electricity consumed directly by the user without exporting it to the grid.

The Maharashtra Electricity Regulatory Commission (MERC) has also tightened energy banking rules by limiting when stored electricity can be used and removing the earlier night-time rebate, reducing one of the major financial benefits enjoyed by rooftop solar consumers.

Instead of introducing a grid charge, Karnataka has chosen a different approach. The Karnataka Electricity Regulatory Commission (KERC) has reduced the buyback tariff for commercial and industrial rooftop solar consumers to ₹3.08 per unit, lowering the earnings from surplus electricity exported to the grid.

The state has also capped rooftop solar capacity connected to individual distribution transformers at 80% of their rated capacity, a move aimed at preventing technical overloads on the local electricity network and managing future installations.

Power sector experts say the policy changes highlight the increasing pressure on electricity distribution companies. While rooftop solar reduces dependence on conventional power during the day, utilities must still maintain poles, transformers, substations, and transmission infrastructure to ensure electricity supply at night, during cloudy weather, or whenever solar generation is insufficient.

Meanwhile, the new framework has already attracted legal attention. The Consumer Grievance Redressal Forum (CGRF), Nagpur, recently directed the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to withdraw a ₹4,394.67 levy imposed on a net-metered consumer and revise electricity bills from February 2026. The forum observed that the recovery lacked clear regulatory backing, raising questions about the implementation of the new charges.

The latest policy changes could significantly affect the financial viability of rooftop solar, especially for commercial and industrial users. Higher grid charges, lower export tariffs, and stricter capacity limits may reduce savings and delay returns on investment. Although the PM Surya Ghar Muft Bijli Yojana continues to encourage residential solar adoption, experts believe similar regulatory changes could gradually emerge in other states as electricity distributors look for ways to recover grid maintenance costs.

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Industry stakeholders will closely monitor how these policies are implemented and whether they face further legal challenges. Consumers planning rooftop solar installations are advised to carefully evaluate state-specific regulations, expected electricity savings, and revised payback periods before making investment decisions. The evolving policies also indicate that India’s rooftop solar sector is entering a new phase where financial returns will increasingly depend on both government incentives and state-level electricity regulations.