Gujarat Regulator Rejects 8% In-Kind Banking Levy, Locks ₹1.50 (about $0.02 USD)/Unit Charge Until 2026, Missing the Value Stack

The Hindu BusinessLine reports that the Gujarat Electricity Regulatory Commission (GERC) has rejected a petition by renewable energy developers to replace the existing ₹1.50 (about $0.02 USD) per unit banking charge with an 8% in-kind levy on banked energy, extending the flat fee until at least August 31, 2026. ^[1] Developers argued that the flat charge does not reflect actual distribution company costs and that the Forum of Regulators' (FoR) recommended 8% energy adjustment is more equitable and transparent. ^[2] GERC dismissed the plea, calling FoR guidelines advisory and asserting its statutory discretion to set charges based on state-specific conditions. ^[3]

This is the same playbook utilities use everywhere when they want to suppress self-generation without saying so. A flat ₹1.50 (about $0.02 USD) per unit banking charge, about 1.8 cents USD at current exchange rates, is a fixed toll that does not vary with the time of day or the value of the energy. ^[4] A fair banking charge would be based on the actual cost of the service, which for solar exports is often near zero or negative during peak solar hours, when the grid is flooded with cheap energy. By refusing to move to an in-kind levy (8% of banked energy), GERC is implicitly telling developers that their exports are worth less than the utility's avoided cost, a claim that state value-of-solar studies routinely refute. ^{[research library]}

Who wins? The distribution company, which collects a fixed payment regardless of system conditions. Who pays? Every open-access solar generator in Gujarat, whose project economics now depend on a charge that independent analysis would likely show is excessive. The mechanism is the banking charge itself, a rate-design lever that can be used to tilt the playing field against distributed generation. The irony is that GERC claims it needs more time to develop a comprehensive framework, yet it has been operating under the same flat charge for years. ^[7][8] The draft Sixth Amendment, which would set a new methodology, is still pending. ^[4]

The concrete alternative is straightforward: adopt the FoR's recommended 8% in-kind levy, which automatically adjusts with electricity tariffs and better reflects the actual cost of banking. Better still, move to a time-differentiated banking charge that credits solar exports at their true value, high during evening peaks, low during solar midday glut, and charges for withdrawals accordingly. Such a framework would align incentives, reward storage, and give developers the price signal they need to invest. Until GERC does that, the ₹1.50 (about $0.02 USD) charge remains a tax on clean energy, not a cost-recovery mechanism.