Energy storage rules for Indian C&I solar

Time-of-Day pricing had existed in Indian tariff schedules for years, but patchily, and often only for the largest consumers. From April 2024 it applies across commercial and industrial consumers generally: a rebate in the solar hours, an adder in the evening peak, and a base rate in between.

Why this mattered more than it sounded

Under a flat tariff, a unit is a unit. Solar sized to annual consumption produces a saving roughly proportional to what it generates, and a battery has almost no bill-reduction case at all — there is no spread to arbitrage.

Under a Time-of-Day tariff, both of those stop being true at once:

• Solar generates almost entirely in the rebated hours, so it displaces the cheapest units on the bill. Its saving per unit is below the site’s blended rate, sometimes well below.
• The expensive hours are the evening peak, when a solar plant produces nothing. Solar alone cannot reach them at any capacity.
• The gap between those two zones is published, structural and known in advance — which is precisely the condition under which storage has a defensible business case.

That is the change that made hour-by-hour modelling necessary. On a flat tariff, annual totals are a reasonable approximation. On a ToD tariff they are not an approximation of anything — the whole answer lives in the distribution across hours. See the tariff guide for how the zones are built.

Each state has an electricity regulatory commission — MERC in Maharashtra, KERC in Karnataka, and so on — which issues tariff orders for the distribution licensees in its state, typically once a financial year.

An order can revise any of:

• The base energy charge, per consumer category and voltage level.
• The Time-of-Day adders and rebates, and their seasonal variants.
• Where the zone boundaries fall — the change that most quietly breaks existing work.
• The demand charge per kVA.
• Electricity duty, fuel adjustment mechanisms and other riders.

The change now driving most storage conversations in the country. As summarised by the requirement taking effect on 1 April 2026: solar installations above 100 kW in Maharashtra must be paired with energy storage sized at 50% of the solar capacity, for two hours.

What that means in kWh

The rule is stated in power and duration, while batteries are procured in energy. The conversion is the obvious one — half the solar capacity, held for two hours:

What it changes about a proposal

For an EPC working in Maharashtra, the consequence is not simply “add a battery to the quote”. It changes the shape of the question:

• Storage becomes a floor, not an option. The relevant question stops being “does a battery pay?” and becomes “given that this battery is being installed anyway, what is the best solar size to pair with it, and how much can the battery earn back?” Those are different optimisations with different answers.
• The 100 kW threshold becomes a design boundary. A project sitting just above it faces a materially different capital structure from one just below, and that is a conversation to have before the array is drawn rather than after.
• The economics get more interesting, not less. A mandated battery still earns Time-of-Day arbitrage, still shifts surplus solar into the evening peak and still shaves demand charges. Sizing it to do those things well — rather than to the compliance minimum and no further — is what separates a compliant proposal from a good one.
• Compliance sizing and economic sizing may not agree. If the economic optimum is a larger battery than the rule requires, the rule is not the constraint. If it is smaller, the rule is — and the customer should be shown both numbers rather than only the one that flatters the proposal.

The direction is not in much doubt, even if the timetable is. Every driver points the same way: grid peaks are moving later into the evening as rooftop solar spreads, Time-of-Day tariffs are already universal, and storage costs continue to fall.

Maharashtra is the first state to make the pairing mandatory for medium-sized C&I solar. Others are expected to follow. No other state is named here with a date, because doing so would be a forecast dressed as a fact — and this page’s value depends on the distinction.

The practical stance for an EPC: treat solar-plus-storage as the default design conversation nationally, not the exception, and keep the ability to size both together rather than bolting a battery onto a finished solar proposal.

• Size the pair together. Solar sized alone and a battery added afterwards produces a worse system than sizing both against the same hourly year, because each changes the optimum for the other — the method explains why.
• Quote the order. Name the tariff order and the compliance basis in the proposal. It costs a line and it is the difference between a number a customer can check and one they have to trust.
• Show compliance and economics separately. The minimum battery the rule requires and the battery that pays best are two different numbers. A customer who is shown only one will eventually find the other.
• Re-check before every quote. Both the tariff and the mandate are moving. A study is a snapshot with a date on it.