Factory Solar Under MERC’s Draft 2026 Rules: What Industrial Units Should Plan For
On 22 September 2026, MERC released draft rooftop solar rules. For factories and process plants, the key message is that generation, shift demand, and storage now need to be planned together. These are proposed rules, not a final notification, but they are worth understanding before you commit to a project.
Existing solar and new applications
If your system is already installed, the earlier rules generally continue to apply to your existing agreement. Expanding or switching routes can bring it under the new rules, and pending applications will be subject to the new rules once notified. Before you expand or change anything, have your agreement and application dates checked.
Banked units may expire every month
For systems above 3 kW, unused banked units would expire at month-end. If 80 units are left after all eligible bill adjustments, none carry into the next month. Size your solar around monthly consumption. Renewable Energy Certificates may be available for lapsed units, but cash recovery is not guaranteed.
System size, time slots and charges
For billing, the draft adds up all the renewable power you generate and contract to buy, including rooftop solar and open access or off-site captive power. Battery capacity is not counted.
The larger your total capacity, the more time-of-day blocks are used to adjust your credits: none up to 10 kW, 4 blocks a day up to 100 kW, 8 up to 1 MW, 12 up to 5 MW and 24 above that. Above 10 kW, the draft also proposes a monthly capacity-based charge and a charge on eligible credits used across slots. The rupee rates have not been specified yet.
Solar peaks at noon, but your shift may not
Solar output peaks in the middle of the day, while factory demand follows shifts, shutdowns and seasonal production. That mismatch decides how much solar you use directly, how much you bank and how much expires. Use interval load data to test daytime use, night demand and storage dispatch before finalising a design.
Storage is part of the plan
Up to 2030, minimum battery energy is solar capacity (AC) × 50% × 2 hours. For a new 200 kW system, that means 200 kWh, which can be met as 100 kW for 2 hours or 50 kW for 4 hours. After 2030, the minimum rises to 2 kWh per kW.
Larger plants and grid limits
The 2023 net-metering cap was 5 MW. The 2026 draft links system size to sanctioned load or contract demand instead, opening the door to larger projects, subject to your approved load and grid capacity. The normal shared transformer or feeder limit remains 70%.
Meters, fees and agreements
You pay for the net-meter replacement and solar generation meter, and systems above 20 kW need a check meter. Zero-export systems of 1 kW and above must still notify the utility before installation. Application fees are Rs 500 for LT up to 20 kW (plus Rs 100 per further 20 kW or part) and Rs 5,000 for HT.
Each agreement runs 20 years, with a 1-year lock-in and 2 permitted route switches. Switching triggers the new rules, and old banked credits are settled under the old route. Above 5 MW, banking is capped at 10% of consumption in each slot.
Before you approve your factory’s capex
Ask your solar provider for a forecast that follows the proposed billing rules, covering self-use, expiry, slot-wise savings, battery ageing, lifetime cost and grid limits.
Chirayu Power can help you review your bill and plan the right solar and storage size for your plant.
Visit chirayupower.com to get started.
Disclaimer: Based on MERC’s draft rooftop rules (Public Notice, 22 September 2026). Provisions are proposed and may change before notification.
FAQs
1. Do the MERC draft rooftop solar rules apply to my existing solar system?
Earlier rules generally continue for your existing agreement. Expanding or switching routes can bring your system under the new rules.
2. Will unused solar units expire?
Under the draft, for systems above 3 kW, unused banked units would expire at month-end. Systems up to 3 kW keep annual banking.
3. Is battery storage mandatory for factory solar?
For new systems above 100 kW, the draft requires storage. Up to 2030, minimum battery energy is solar capacity (AC) × 50% × 2 hours.
4. Can factories install more than 5 MW of rooftop solar?
The 2026 draft links system size to sanctioned load or contract demand, with no separate 5 MW cap. It is still subject to your approved load and grid capacity.
5. What are the application fees?
LT: Rs 500 for up to 20 kW, plus Rs 100 for each further 20 kW or part. HT: Rs 5,000.
6. Are these rules final?
No. These are proposed rules and may change before notification. Comments close on 12 October 2026.


