What The New MERC 2026 Rooftop Solar Regulations Mean for Housing Societies in Maharashtra

The Maharashtra Electricity Regulatory Commission (MERC) has released its draft MERC (Grid Interactive Rooftop Renewable Energy Generating Systems) Regulations, 2026. This comprehensive draft will repeal the longstanding 2019 regulations and their subsequent amendments, resetting how rooftop solar plants operate, how energy is banked, and how electricity bills are calculated across Maharashtra.

Here is what you should know about these changes.

1. The End of Annual Net Off: 4 Daily Banking Slots and Lapsing Units

Under the older 2019 framework, societies could export heavy midday summer generation to MSEDCL, Tata Power, or Adani Electricity, let those credits accumulate on their ledger, and offset them across the year.

The 2026 regulations replace this with a restrictive framework for systems between 10 kW and 100 kW:

• Monthly Settlement Only: The banking settlement period is now strictly monthly. Surplus energy cannot be banked across calendar seasons.

• 4 Time-of-Day Slots per Day: Daily generation and consumption are divided into four 6-hour windows:

1. Slot 1: 00:00 to 06:00 Hrs

1. Slot 2: 06:00 to 12:00 Hrs

1. Slot 3: 12:00 to 18:00 Hrs

1. Slot 4: 18:00 to 24:00 Hrs

• Surplus Energy Now Lapses into RECs (No Cash Payout): For any system with a contracted capacity exceeding 3 kW, unutilized banked energy at the end of each billing period automatically lapses. Instead of receiving a monetary credit or tariff purchase from the utility, the society will only receive Renewable Energy Certificates (RECs).

2. Two New Costs Replace Grid Support Charges: Fixed and Variable Banking & Standby Charges

To recover grid stabilization costs and compensate for non-solar spinning reserves, MERC has introduced two distinct charges that apply to systems in the 10 kW to 100 kW category:

1. Fixed Banking & Standby Charges (FBSC): A monthly charge levied on a Rs/kW/month basis on your total contracted solar capacity. This fee compensates the DISCOM for providing standby power when panels are not producing.

1. Variable Banking & Standby Charges (VBSC): A consumption charge levied on a Rs/kWh basis whenever solar units generated in one time slot (e.g., afternoon Slot 3) are drawn and consumed in another (e.g., evening lighting in Slot 4). This charge reflects the imputed cost of storage incurred by the grid to shift daytime power to night hours.

These charges will be quantified in upcoming retail tariff orders. While solar will continue to deliver substantial unit bill offsets, committee financial models must account for these charges.

3. THE 100 KW BATTERY STORAGE (BESS) MANDATE

For large residential townships and sprawling residential complexes planning a centralized rooftop array above 100 kW, the draft introduces a compulsory storage mandate.

Under Regulation 4.2, any new grid-interactive or Behind-the-Meter (BTM) system with a capacity exceeding 100 kW must install an Energy Storage System (BESS) meeting one of two criteria:

• Option A: Storage capacity equal to at least 50% of installed RE capacity with a minimum 2-hour duration. (For instance, a 120 kW solar plant requires a 60 kW / 120 kWh battery system.)
• Option B: Storage capacity equal to at least 25% of installed RE capacity with a minimum 4-hour duration. (For instance, a 120 kW solar plant requires a 30 kW / 120 kWh battery system.)

Furthermore, the draft mandates an energy storage baseline of at least 1 kWh per kW of solar capacity up to 2030, increasing to 2 kWh per kW after 2030.

What this means for societies:

• Relief for Standard Societies (Under 100 kW): If your society rooftop system is below 100 kW (which applies to the vast majority of standalone societies in Mumbai and Thane), battery storage remains completely optional under Regulation 7.2. You can continue using standard grid-tied string inverters without battery capital expenditure.
• The Sub-100 kW Engineering Strategy: For larger complexes where preliminary calculations indicate a requirement of 105 kW to 110 kW, engineers should consider capping AC inverter capacity at 99 kW. This avoids triggering compulsory battery storage mandates and saves substantial capital costs

4. The Protection for Older Installations

If your housing society has been delaying its solar decision, the transitional provisions in Regulation 1.3, 4.6, and 19 require immediate attention:

• 20-Year Protection: Solar connection agreements executed under the 2019 regulations will continue to be governed by those legacy rules for their full 20-year agreement term. They are shielded from slot restrictions and new banking fees for the duration of the contract.

• Applications in the Pipeline: Applications submitted after the publication of this draft are initially processed under current rules, but the final operating terms will be subject to the 2026 regulations once officially gazetted.

• The Augmentation Trap: If a society with an existing plant decides to augment or add even a few kilowatts of capacity after these regulations take effect, the entire installation is mandatorily migrated to the restrictive 2026 rules.

5. Action Checklist for Managing Committees

To navigate this regulatory transition effectively, housing society committees should take the following steps:

1. Audit Your Common Area Load Profiles: Do not size your system based purely on annual units consumed. Request an hourly load-curve study from your EPC partner to model consumption across the four 6-hour banking slots.

1. Size for Self-Consumption, Not Export: Because surplus power above 3 kW now lapses into non-cash RECs at month-end, size the array to offset predictable daytime baseload (e.g., morning water pumping schedules, lift operations, clubhouse HVAC).

1. Review Future Addition Plans: Because future capacity additions trigger mandatory migration to the 2026 rules, design and sanction your maximum anticipated capacity now rather than planning phased add-ons later.