A solar factory asked to use Uttar Pradesh's grid as a free battery

A company building a Rs 8,000 crore solar factory in Uttar Pradesh asked the state's electricity regulator for an unusual arrangement. Let it push power from its own solar plant onto the state grid by day, let it take that power back at any hour it chose, and let it pay nothing for the journey, for as long as the plant runs. On 2 September the regulator said no.

The company is SAEL Solar P6. The Uttar Pradesh government gave it a written offer of incentives in July 2025 to build a plant making 5 GW of solar cells a year and the same again in modules. Electricity is a large and unavoidable cost in that business, the company told the Commission, and competing with established global manufacturers depends on keeping that cost predictable.

What it asked for

Storing surplus solar on the grid by day and claiming it back later is called banking. SAEL wanted banking for the whole operating life of the plant, and it wanted to claim the power back at any hour, including the evening peak when power is scarcest and dearest.

It wanted three charges waived for the same period: the banking charge, the wheeling charge, which is the fee for carrying power over someone else's wires, and the transmission charge, which pays for the high-voltage network. It also wanted to build more solar than the state's offer letter allows, which caps the plant at 125 per cent of the factory's own demand.

What the transmission company said

Uttar Pradesh's transmission company said the arrangement would turn its network into "a virtual energy storage facility". SAEL would collect the gain from shifting cheap daytime solar into expensive evening hours, and the job of keeping the network standing would stay where it was.

Exempting one user does not reduce the revenue the regulator has already approved for the transmission company, it said. The shortfall then sits unrecovered, or waits for a later year. The third possibility it named is redistributing the money "amongst the remaining users" at a future tariff decision.

The state power corporation added that the government had already turned down the banking relaxations, and that SAEL could not now obtain the same benefit indirectly from the regulator.

The regulator's answer

The Commission refused all five of the banking and charge requests. Its power to relax its own regulations exists to relieve hardship in exceptional cases, it held, and cannot be stretched "to incentivize a proper noun", by which it meant one named company, at the expense of every other consumer's bill. Deciding to subsidise an industry, it added, "rests solely with the Government".

What the charge is worth

In a separate order in April, the same Commission fixed this year's transmission charge for users like SAEL at Rs 0.3075 a unit.

Its own calculation had produced Rs 0.4448. A rule capping yearly increases at 15 per cent brought the billed figure down, and the difference waits for a later year.

Uttar Pradesh's solar policy already rebates part of that charge for eligible solar projects, and the tariff order confirms the rebate is applied on the monthly invoice. The state power corporation told the Commission the policy gives half, and that SAEL was asking for all of it.

For a factory drawing 1 crore units a month (our arithmetic): at Rs 0.3075 a unit, the transmission charge comes to about Rs 30.75 lakh a month. Halve it under the solar policy and about Rs 15 lakh is left. SAEL asked for that remainder to go too, every month, for the life of the plant.

On plant size, the regulator pointed at the government

Its own regulations set no ceiling on how large a captive plant may be, the Commission said, meaning a plant built to supply its owner's own factory. The 125 per cent limit sits in the government's offer letter, so the company should take it up there.

What the regulations do govern is how much power may be pushed onto the grid at any moment, which is capped by the quantity SAEL has booked the right to move.

Households bank power too

A household with rooftop solar that exports at noon and draws at night is using the wires as a store in the same way. Power companies make the same cost-shifting case against paying households for what they send out.

Uttar Pradesh refused that case to a Rs 8,000 crore factory this month. The next rooftop banking decision will show whether the principle holds when the other party is a household.

If one large user stops paying to use the wires, Uttar Pradesh's regulator says the rest of the state's consumers pay instead.

What we could not confirm

• Does Uttar Pradesh apply the same cost-shifting reasoning when a household with rooftop solar banks power?
• Will the state government grant through policy what the regulator refused, and has SAEL asked it to?
• Does the Uttar Pradesh Solar Energy Policy 2022 rebate half the transmission and wheeling charge, as the state power corporation told the Commission?

The document

Order in Petition No. 2353 of 2026, M/s SAEL Solar P6 Private Limited versus Uttar Pradesh Power Corporation Ltd. and Uttar Pradesh Power Transmission Corporation Ltd., Uttar Pradesh Electricity Regulatory Commission, Lucknow. Heard 30 July 2026, dated 2 September 2026, eight pages. Signed by Chairman Arvind Kumar, Member Sanjay Kumar Singh and Member (Law) Griesh Kumar Vaish.

Sources:

1. The order: https://www.uperc.org/App_File/OrderSaelSolarP6Pvt-Ltd-,Pet-No-2353of2026-PDF92202632109PM.pdf
2. Transmission tariff for 2026-27, Petition No. 2320 of 2025, dated 15 April 2026, paragraphs 8.7.11, 8.7.12 and 8.7.14: https://www.uperc.org/App_File/UPPTCL_TariffOrder_26_27_DigitallySigned-pdf415202652122PM.pdf
3. Mercom India, 4 September 2026: https://www.mercomindia.com/uperc-rejects-plea-for-uncapped-banking-of-power-from-captive-solar-project
4. SaurEnergy: https://www.saurenergy.com/solar-energy-news/uperc-denies-special-treatment-for-saels-solar-captive-plant-in-up-12489597