Open Access Solar Growth Slows in Maharashtra and Tamil Nadu

Banking and Tariff Reforms Reshape Open Access Markets

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India’s solar open access market recorded 55% quarter-over-quarter growth in Q1 2026, adding 2.7 GW, supported by favorable regulatory developments, proactive state-level policies, growing consumer awareness, and improved project execution across key markets.

According to Mercom’s recently released Q1 2026 India Solar Open Access Market Report, installations could have been significantly higher if not for regulatory changes in states such as Maharashtra, grid constraints, and supply-side bottlenecks.

Maharashtra and Tamil Nadu, in particular, recorded weaker installation activity during the quarter, despite continued interest from commercial and industrial (C&I) consumers seeking renewable energy solutions to reduce electricity costs and meet sustainability targets.

Banking and ToD Reforms Weigh on Maharashtra

In Q1 2026, solar open access installations in Maharashtra fell by 81% quarter-over-quarter and 61% year-over-year. While the state led installations in the previous quarter, it ranked eighth in Q1. Maharashtra continues to be one of India’s largest solar open access markets, but the revised energy banking rules and the time-of-day (ToD) tariff framework have slowed consumer decision-making and encouraged a shift toward smaller, load-matched power purchase agreements (PPAs).

The revised banking framework has materially altered project economics by limiting consumers’ ability to maximize the value of surplus solar generation. This has reduced the earlier flexibility available to consumers with evening or night-time demand and weakened the value of surplus daytime solar generation.

The impact is expected to be more pronounced among mid- and large-scale C&I consumers, as the new rules extend project payback periods and reduce the attractiveness of open access solar projects.

The new ToD tariff structure is further reshaping procurement strategies and project sizing decisions. There are significant savings for consumers who use power during the 09:00 to 17:00 solar generation window, with high-tension (HT) industrial consumers being the biggest beneficiaries. Consumers who can shift the load to daytime hours stand to gain, but those with evening, night, or seasonal demand profiles may see weaker savings from standalone solar.

Project and PPA structuring are therefore expected to become more conservative. Developers are likely to prioritize offtakers with stable daytime demand, stronger credit profiles, and better load predictability.

Together, the banking and ToD reforms have shifted the market away from aggressive capacity procurement toward more conservative, demand-aligned projects, contributing to slower installation activity during the quarter.