India's New Electricity Rules 2026: What Solar EPCs Must Know

Quick Answer

1. What is this? A draft amendment to the Electricity (Rights of Consumers) Rules, 2020, issued by the Union Ministry of Power.
2. Is it law yet? No. Still draft as of this writing. Comment period closed April 11, 2026. Targeted effective date October 1, 2026.
3. Who does it affect? Any EPC proposing rooftop or C&I solar above 5 kW in India, especially above 500 kW.
4. What's the single biggest change? Net metering above 5 kW stops being free, and installations above 500 kW may be required to add battery storage.
5. What should EPCs do now? Build the net-metering charge and possible storage requirement into proposals above 5 kW now, rather than waiting for final gazette notification.

Why This Matters for EPCs

Three provisions in this draft directly change how you size, price, and pitch a solar system in India, not years from now, but for any project quoted today that will commission after these rules take effect. A proposal that assumes today's free net metering and no storage mandate on a 600 kW commercial rooftop could be pricing a system that doesn't match the economics, or the compliance requirements, the client will actually face by the time it's operating. Getting ahead of this now, rather than reacting to it after your state's SERC notifies its own version of these rules, is the difference between being the EPC who explained the shift and the EPC whose numbers turned out to be wrong.

What the Draft Actually Changes

Time-of-Day Tariffs Aren't New. The Deadline Reset Is.

India's consumer rules already mandated Time-of-Day tariffs for large consumers back in 2023. Commercial and industrial consumers above 10 kW demand were supposed to be on ToD billing from April 2024, and everyone else except agricultural consumers from April 2025. That didn't happen in most states, because ToD billing requires smart meters that can record consumption in time blocks, and India's smart meter rollout has run well behind schedule.

The draft doesn't change the mechanism, it resets the timeline. C&I consumers above 10 kW now have until April 2027, and other non-agricultural consumers until April 2028, both explicitly tied to how far smart meter deployment has actually progressed in each state.

The mechanism itself is worth knowing precisely, since it's what makes the financial case for a battery real. Under the existing structure, a state's peak-hour rate must be at least 20% above the normal tariff, and its solar-hour rate at least 20% below. On a ₹10 base tariff, that's a minimum spread of ₹4, a state can set it wider, but not narrower. There's a built-in safeguard too: peak hours can't be declared longer than solar hours, which are defined as an eight-hour daytime window, so a DISCOM can't simply label most of the day as "peak" and erase the discount.

For any client running heavy equipment, cold storage, or continuous processes, that spread is the number that turns "solar plus battery" from a nice-to-have into a real payback calculation, once ToD actually applies to their connection.

The End of Free Net Metering Above 5 kW

This is the provision worth explaining carefully to a client, because most won't intuitively understand why it exists.

Under standard net metering today, a commercial building that exports 100 units at midday and draws 100 units back in the evening shows zero net consumption on its bill. From the building owner's side, that looks like a wash. It isn't. The DISCOM absorbed that midday surplus when the grid was already flush with solar, handled the transmission and distribution losses on both sides of the transaction, and then had to procure expensive peak-hour power in the evening to serve that same building. The building owner paid nothing for any of it. The DISCOM functioned as an unpaid, zero-cost battery.

There's a second distortion layered on top. Indian electricity tariffs are typically slab-based, so higher consumption draws a higher per-unit rate, a structure that's supposed to make large consumers subsidize smaller ones. Net metering breaks that: a factory actually consuming 5,000 units a month might show a net consumption of only 1,000 after solar offsets, landing it in a lower tariff slab than its real usage would put it in. The cost of maintaining the grid shifts onto consumers who never got a solar subsidy in the first place.

The draft addresses both problems by giving State Electricity Regulatory Commissions authority to levy a progressive net-metering charge on prosumers with installations above 5 kW. Standard household systems up to 5 kW stay fully exempt. Above that, the charge scales with size, and it's explicitly pegged to what a battery would cost to perform the same balancing service the grid currently provides free. A 10 kW commercial setup faces a modest charge; a 400 kW industrial installation faces a meaningful one.

Worth knowing for context: this is the gentler version of a bigger fight. The draft National Electricity Policy 2026 reportedly signaled an intent to effectively end net metering above 5 kW entirely. These consumer rules take the softer route, not banning net metering, just ending its free ride.

The New Storage Mandate Above 500 kW

This is the provision with no precedent in the existing framework. Regulators previously had tools to incentivize storage alongside a large solar installation. They had no power to require it. The draft creates that power for the first time, through explicit new legal authority given to state commissions for any renewable installation above 500 kW.

Two things worth being precise about with a client. First, this isn't an automatic, nationwide mandate, it's new permission for state commissions to use if and when they choose to. Second, "appropriate capacity" is left to each state to define; the draft doesn't specify a number of hours. A plausible range based on how similar mandates have worked elsewhere in India (Maharashtra's existing BESS mandate uses 50% of solar capacity for a minimum of 2 hours) is a reasonable placeholder for early client conversations, but confirm your specific state's eventual notification before quoting a firm number.

The 500 kW threshold is deliberate. It captures large industrial complexes, IT parks, malls, and hospital campuses, the segment large enough that thousands of such installations dumping surplus solar at midday genuinely stresses the distribution network. It doesn't reach households or mid-sized commercial rooftops.

States with the most acute midday curtailment problems today, Rajasthan, Gujarat, and Tamil Nadu, are the most likely early movers on actually using this authority once it's final.

Why This Is Happening Now: The Curtailment Problem Underneath All Three Provisions

These three changes aren't arbitrary. They're a response to a specific, measurable grid problem. India added roughly 15 GW of solar in FY2023-24, 24 GW in FY2024-25, and a record addition in calendar 2025, pushing cumulative capacity past 130 GW. In that same year, India curtailed an estimated 2.3 TWh of solar generation, electricity the panels produced but the grid couldn't absorb. In Rajasthan, Gujarat, and Tamil Nadu specifically, curtailment rates ran between 10% and 30% during the worst periods.

Read together, the three provisions reinforce each other on exactly this problem. The ToD spread makes storing midday solar for evening use financially worthwhile on its own terms. The net-metering charge removes the free alternative of treating the grid as a zero-cost battery. The storage mandate gives regulators a lever for the large prosumers who don't respond to price signals alone. None of the three would move the needle much in isolation. Together, they're a coordinated push toward storing solar, not just installing it.

What EPCs Should Do With This Right Now

• Model the net-metering charge into every proposal above 5 kW, even while the exact per-kW rate is still unset by any state. Present it as a known, coming cost rather than something the client discovers later.
• Flag the 500 kW storage question explicitly on any large C&I proposal. A client sizing a 600 kW system today should know a storage requirement may attach to it before commissioning, not find out after signing.
• Rebuild your ToD financial modeling with the actual mechanism, minimum 20% below on solar hours, minimum 20% above on peak, not a generic "rates will change" assumption. This is the number that makes or breaks a battery attach-rate conversation.
• Track your specific state's SERC, not just the central draft. The rules explicitly delegate net-metering charge design and storage mandate authority to state commissions; the practical numbers your clients face will come from state notifications, not this central rulebook directly.
• Don't wait for the gazette notification to start these conversations. The core mechanisms are unlikely to change substantially between draft and final; clients benefit from hearing this now, not after the rules are locked in and their project is already designed around outdated assumptions.

Common Mistakes to Avoid

• Don't present this as settled law. It is a draft with a closed comment period and a targeted date, not a notified rule. Say so plainly to clients.
• Don't quote a specific net-metering charge or storage-hour requirement as if it's fixed. Neither has been defined by any state commission yet.
• Don't confuse this with the Electricity (Amendment) Rules, 2026 that was actually finalized in March 2026, that instrument covers captive generating plant rules, a completely different topic despite the near-identical name.
• Don't treat the 500 kW storage authority as a nationwide mandate. It's new permission for states to use, not an automatic requirement everywhere.
• Don't assume net metering is being eliminated. It's being priced, not banned, a meaningfully different message for a client than "net metering is going away."

How This Fits Into a Reslink Workflow

Every one of these three provisions eventually becomes a line item in a proposal: a net-metering charge assumption, a storage sizing decision, a ToD-adjusted savings calculation. That's exactly where this stops being a policy story and starts being a design and pricing problem. Reslink's proposal workflow is where these assumptions need to live alongside the system design and BOM, not in a separate policy memo nobody checks before a quote goes out to the client.

See how a Reslink proposal keeps regulatory assumptions attached to the design itself → Book a demo

Frequently Asked Questions

Q1. Is the Electricity (Rights of Consumers) Amendment Rules, 2026 already in force?

No. It's a draft notification from the Ministry of Power, released March 12, 2026, with a stakeholder comment window that closed April 11, 2026. The targeted effective date is October 1, 2026, with phased implementation for the ToD and storage-related provisions. As of this writing, no notification confirming these rules have been finalized has been found.

Q2. Does this eliminate net metering in India?

No. It's often described that way, incorrectly. Net metering itself continues. What changes is that State Electricity Regulatory Commissions get authority to charge prosumers with installations above 5 kW a progressive fee for the balancing service the grid currently provides free. Systems up to 5 kW remain fully exempt from this charge.

Q3. Is the 500 kW battery storage requirement mandatory everywhere?

No. The draft gives state commissions new legal authority to mandate storage above 500 kW; it doesn't impose that requirement directly or uniformly. Whether and how a specific state uses that authority, and what storage capacity it requires, is left to each state's own notification. States with acute midday curtailment, like Rajasthan, Gujarat, and Tamil Nadu, are the most likely to act on it first.

Q4. How is the net-metering charge actually calculated?

The draft doesn't fix a specific rate. It directs the charge to be progressive, scaling with system size, and pegged conceptually to the cost of the storage capacity that would be needed to replace the balancing service the grid currently provides for free. The exact formula and rate will come from each state commission's own tariff order once the central rules are finalized.

Q5. Why is the Time-of-Day tariff deadline being pushed again?

Because the original 2023 mandate, which required ToD billing from April 2024 for large C&I consumers, depended on smart meters that most states hadn't yet deployed at scale. ToD billing is unenforceable without meters that can record consumption in time blocks. The new draft ties the revised deadlines, April 2027 for C&I above 10 kW and April 2028 for other non-agricultural consumers, explicitly to smart meter rollout progress rather than setting a fixed date independent of infrastructure readiness.

Q6. What's the actual minimum ToD rate spread EPCs should model?

At minimum, the peak-hour rate must be at least 20% above the normal tariff and the solar-hour rate at least 20% below it, a combined minimum spread of 40% of the base tariff. States can set the spread wider but not narrower. Peak hours are also capped at no longer than the eight-hour solar-hour window, preventing a DISCOM from declaring most of the day as peak.

Q7. How does this draft relate to the Electricity (Amendment) Rules, 2026 that was already notified?

They're different instruments despite similar names. The Electricity (Amendment) Rules, 2026, notified March 13, 2026 via G.S.R. 186(E), rewrote captive generating plant rules under the Electricity Rules, 2005. The Electricity (Rights of Consumers) Amendment Rules, 2026 discussed here is a separate draft covering net metering, ToD tariffs, storage mandates, and consumer billing protections. Confirm which one a source is referencing before citing either to a client.

Q8. What's the actual grid problem these rules are trying to solve?

Curtailment. India added a record amount of new solar capacity in 2025 while curtailing an estimated 2.3 TWh of solar generation the same year, power the panels produced but the grid couldn't absorb, with curtailment rates in Rajasthan, Gujarat, and Tamil Nadu running as high as 10% to 30% during peak periods. The ToD spread, the net-metering charge, and the storage mandate are three different levers aimed at the same underlying issue: getting solar generation stored and consumed on a timeline the grid can actually handle, rather than just adding more capacity that gets switched off at noon.

Sources

• Ministry of Power, draft notification, March 12, 2026, "Seeking comments on Draft Electricity (Rights of Consumers) Amendment Rules, 2026," confirms the release date, the April 11, 2026 comment deadline, and the October 1, 2026 targeted effective date.
• Energetica India, "MoP Releases Draft Electricity Consumer Rights Rules 2026," confirms the ToD tariff timeline (April 2027 / April 2028), the 500 kW storage provision, and the 5 kW net-metering charge threshold.
• Mercom India, "Government Proposes Amendments to Electricity Consumer Rights Rules," confirms the progressive net-metering charge design and the state-regulated net metering/net billing/gross metering framework.
• Indian Infrastructure, coverage of the March 2026 draft, confirms the demand response framework and the new-connection timeline provisions (3/7/15/30 days by area type).
• The Daily Brief by Zerodha, "The new rules of paying for electricity," March 18, 2026, confirms the ToD rate-spread mechanics, the DISCOM-as-free-battery rationale for the net-metering charge, the "new legal authority" framing for the 500 kW storage provision, and the 2025 curtailment figures (2.3 TWh, 10-30% in Rajasthan/Gujarat/Tamil Nadu).
• Mondaq / Saur Energy, coverage of the Electricity (Amendment) Rules, 2026 (G.S.R. 186(E)), confirms this is a separate, already-finalized instrument covering captive generating plants, not the consumer rights rules discussed here.