Magazine

Last edition
January-February 2025

Home › Policies & Regulations ›Madras High Court Strikes Down Network Charges on Rooftop Solar Projects for Captive Use

Madras High Court Strikes Down Network Charges on Rooftop Solar Projects for Captive Use

The Madras High Court has struck down Tamil Nadu Power Distribution Corporation's network charges ranging from INR 0.83 to INR 1.27 per unit on industrial captive rooftop solar users, ruling them in conflict with the state's renewable energy policies.

April 01, 2025. By Mrinmoy Dey

The Madras High Court has struck down network charges imposed on industrial consumers using rooftop solar power for captive use and not linked to the grid by the Tamil Nadu Power Distribution Corporation (TNPDCL). The court ruled that these charges had no legal basis and conflicted with state policies aimed at promoting renewable energy adoption. The decision brings relief to industries burdened by additional costs despite their investment in sustainable energy solutions.

Under the Tamil Nadu Electricity Regulatory Commission’s 2021 tariff order, the Discom imposed charges of INR 0.83 per unit for solar power generated by high-tension (HT) consumers and INR 1.27 per unit for low-tension (LT) consumers. The latest rates have increased to INR 1.04 and INR 1.59 per unit, respectively.

Commercial and industrial (C&I) consumers, particularly in the textile and manufacturing sectors, had opposed the levy, arguing that it discouraged solar energy investments. Several industry associations challenged the charges in court, calling them an undue financial burden.

Justice Anita Sumanth ruled that penalising solar energy users with network charges contradicted the state’s renewable energy objectives. The court emphasised that regulations should encourage, rather than hinder, the transition to clean energy. The verdict reinforces the alignment of policies with national and state commitments to sustainable energy expansion.

Following the ruling, industry bodies such as the Tamil Nadu Spinning Mills Association have called for an immediate halt to charge collection and demanded refunds for payments made since the charges were implemented in October 2021. Legal representatives have warned of potential contempt proceedings if the charges continue to appear in electricity bills.

In a similar verdict, in December 2024, the Madras High Court quashed the INR 50 lakh/MW Resource Charges imposed by Tamil Nadu Green Energy Corporation Ltd. (GECL) on wind power projects connected to the Central Transmission Utility (CTU), citing the levy as arbitrary, unconstitutional, and lacking legislative backing.

Tags:

Policies & Regulations

Madras High Court

Tangedco

TNPDCL

Tamil Nadu Power Distribution Corporation

Network charges on rooftop solar

C and I segment

Captive user

Captive Solar Rooftop Plants