Energy banking enables renewable energy developers to inject surplus power into the grid for withdrawal during periods when needed, thereby optimizing energy utilization. This mechanism ensures flexible energy management for developers and generates additional revenue for DISCOMs through associated banking charges.

According to Mercom’s Q4 and Annual India Solar Open Access Market Report, India’s cumulative open-access solar installations reached 20.2 GW at the end of Q4 2024. The top ten states contributed to 96% of the country’s cumulative installed solar open-access capacity.

In 2024, India added 6.9 GW of open-access solar power, marking the highest annual installation to date and a 77% YoY increase. Maharashtra, Rajasthan, Karnataka, Gujarat, and Uttar Pradesh led the country’s solar open-access installations in 2024.

The energy banking policies in the top states:

Maharashtra

Maharashtra Electricity Regulatory Commission (MERC) levies an 8% charge on banking surplus power from captive and third-party open-access projects with monthly settlement of the banked power.

Renewable energy generators can bank 100% of the surplus generation, though the withdrawal of banked power is subject to specific time-of-day (ToD) constraints. The energy banked during peak ToD hours can be utilized during off-peak hours, while energy stored during off-peak intervals cannot be accessed during peak ToD slots.

MERC stipulates that unused banked energy automatically expires at the end of each monthly billing period. However, the developer can claim an equivalent Renewable Energy Certificates (RECs) capacity against the lapsed power.

Rajasthan

In Rajasthan, energy banking is permitted for captive and third-party sales between April and March, i.e., during the financial year, with an annual settlement of banked energy.

The state’s energy banking charges are at 10%, but under the draft Green Energy Open Access Regulations, an 8% charge is proposed. Rajasthan restricts the drawal of banked energy during peak hours.

Karnataka

Karnataka’s energy regulator allows annual energy settlement for renewable energy projects catering to captive and third-party consumers. A banking charge of 8% will be levied on the drawal of off-peak energy during peak hours.

Additionally, 2% of banked energy will be deducted in addition to the 8% charge for withdrawing off-peak power during peak hours. Karnataka allowed the banking of 100% of the surplus generation.

In January 2025, the Karnataka High Court struck down the state’s previous open-access regulations. In the same month, the state electricity regulator issued draft open-access rules in compliance with the High Court’s order to frame new regulations. The draft regulations propose monthly energy banking.

Gujarat

The state allows daily energy banking between 7 am and 6 pm for solar open-access projects and monthly energy banking for wind-solar hybrid energy projects. The state levies ₹1.5 (~$0.019)/kWh and ₹1.1 (~$0.014)/kWh as energy banking charges on high-tension and low-tension consumers, respectively, for surplus solar power. No banking charges apply to the surplus power from wind-solar hybrid projects.

The state allows 100% energy banking for captive and third-party sales. Gujarat doesn’t allow energy banking for projects under the REC mechanism. The state enables green energy open-access consumers to bank at least 30% of their total electricity consumption from the distribution licensee during the billing period.

Uttar Pradesh

The state permits captive projects to bank 100% of the surplus generation in lieu of 6% of banked energy. The settlement of banked power is as per the notifications issued by the Uttar Pradesh Electricity Regulatory Commission (UPERC) from time to time.

Withdrawal of banked energy during peak and off-peak periods is limited to the energy banked during the respective periods.

The Q4 & Annual 2024 Mercom India Solar Open Access Market Report is 64 pages long and covers vital information and data on the market.

For the complete report, visit: https://www.mercomindia.com/product/q4-2024-mercom-india-solar-open-access-market-report