HERC Open Access Surcharge ₹1.37/Unit: Haryana Industrial Impact

Key Takeaways

• The Haryana Electricity Regulatory Commission (HERC) imposed an additional surcharge of ₹1.37/unit on open access consumers for H2 FY2025-26, effective April 30, 2026
• This represents a 13% increase from the previous ₹1.21/unit surcharge for H1 FY2025-26
• The surcharge applies to consumers procuring power via open access from private generators or power exchanges within UHBVNL and DHBVNL service areas
• Captive power plant owners are exempt — only third-party open access consumers face this levy
• For industrial buyers in Haryana, the landed cost of open access solar increases, but rooftop captive solar remains highly attractive (exempt from the surcharge)
• The surcharge was computed based on approximately ₹207.9 million stranded cost divided by 152.26 million projected open-access units for H2 FY2026

Haryana's industrial solar buyers received a significant policy update in May 2026: the Haryana Electricity Regulatory Commission (HERC) raised the additional surcharge on open access consumers from ₹1.21/unit to ₹1.37/unit for the second half of FY2025-26 (October 2025–March 2026), effective April 30, 2026. The total landed cost of open access solar in Haryana is now ₹5.57–7.12/unit, compared to UHBVNL/DHBVNL HT industrial tariffs of ₹7.80–9.50/unit — still a saving of ₹0.70–2.00/unit, or approximately ₹10–30 lakh per MW per year. Rooftop captive solar in Haryana delivers an LCOE of ₹1.60–2.20/unit over 25 years, making it the most cost-effective renewable option available to industrial consumers in the state. This change has direct implications for industrial facilities in Manesar, Bhiwadi, Kundli, Panipat, Faridabad, and other Haryana industrial corridors that are evaluating or currently using open access solar procurement.

What is the HERC Additional Surcharge on Open Access?

Under the Electricity Act 2003, state regulatory commissions can levy an "additional surcharge" on open access consumers to recover fixed costs incurred by the local DISCOM when large consumers exit the distribution network and procure power from alternative sources. When major industrial consumers switch to open access solar, the power already procured by UHBVNL (Uttar Haryana Bijli Vitran Nigam) and DHBVNL (Dakshin Haryana Bijli Vitran Nigam) for those consumers becomes "stranded" — meaning the DISCOM still bears the fixed charges of that contracted power but no longer receives revenue from those consumers.

The additional surcharge mechanism recovers these stranded costs from the very consumers who have exited to open access.

Source: SolarQuarter, May 5, 2026; Mercom India

How HERC Calculated the ₹1.37/Unit Surcharge

The HERC order's calculation methodology:

This was computed by dividing the total stranded fixed cost by the projected open-access consumption volume. The surcharge is revised every half-year (H1 April–September, H2 October–March) based on updated stranded cost calculations.

H1 FY2025-26 surcharge: ₹1.21/unit H2 FY2025-26 surcharge: ₹1.37/unit (13% increase)

Who Does the Surcharge Apply To?

The ₹1.37/unit additional surcharge applies to:

• Consumers procuring power via third-party open access from private generators (independent power producers) or power exchanges
• Applies within UHBVNL and DHBVNL operational areas (covering Ambala, Kurukshetra, Karnal, Panipat, Sonipat, Rohtak, Jhajjar, Rewari on the UHBVNL side; Gurgaon, Faridabad, Palwal, Nuh, Mewat, Bhiwani, Hisar, Sirsa, Fatehabad on the DHBVNL side)
• Both intra-state (Haryana generators) and inter-state (ISTS open access from Rajasthan, etc.) consumers

Exempt from the surcharge:

• Captive power plants — consumers generating electricity for their own use (Section 9, Electricity Act 2003) are explicitly exempt
• Net-metering solar consumers (rooftop behind-the-meter)
• Group captive consumers with 26%+ equity stake in the generating company

Impact on Haryana Industrial Open Access Solar

The Full Cost Breakdown of Haryana Open Access Solar (Post-Surcharge)

For an industrial consumer in Haryana procuring open access solar from a Rajasthan solar park, the landed cost typically includes:

For comparison, Haryana HT-II industrial tariffs from UHBVNL/DHBVNL are approximately ₹7.80-9.50/unit in 2026.

The net saving on open access has narrowed — but open access solar still delivers a saving of ₹0.70–2.00/unit compared to grid tariffs, translating to approximately ₹10–30 lakh per MW per year in electricity cost savings. The group captive structure (26%+ equity in the generating SPV) eliminates the additional surcharge entirely, making it the most cost-effective path for large consumers seeking off-site renewable energy in Haryana.

What Has Changed vs Previous Open Access Math

A 1 MW open access solar consumer in Haryana in H1 FY2025-26 (when the additional surcharge was ₹1.21/unit) would have seen landed costs of approximately ₹5.41-6.96/unit. Post-revision, the same consumer pays ₹5.57-7.12/unit — a ₹0.16/unit increase (approximately ₹1.5-2.5 lakh/year additional cost for a 1 MW consumer at 10 million units/year consumption).

This is not negligible, but it does not eliminate the economic case for open access solar in Haryana — it simply compresses the margin.

Captive Rooftop Solar: The Better Alternative for Most Haryana Industrial Buyers

The HERC surcharge specifically exempts captive solar (behind-the-meter rooftop or ground-mount for own consumption). For most Haryana industrial buyers — factories, warehouses, manufacturing plants — rooftop captive solar remains the most financially attractive solar option in 2026.

Why rooftop captive wins in Haryana:

1. No additional surcharge: Captive consumers are fully exempt from the ₹1.37/unit levy
2. No cross-subsidy surcharge: The ₹0.80-1.10/unit cross-subsidy burden also does not apply to captive solar under HERC's framework
3. No wheeling charges: Power consumed at the point of generation avoids grid wheeling fees
4. HERC net metering up to 1 MW: Surplus solar units are banked monthly and redeemed against grid consumption
5. HT-I tariff arbitrage: At ₹7.80-9.50/unit grid tariffs, rooftop solar delivering power at an LCOE of ₹1.60-2.20/unit over 25 years creates 4-6x cost advantage

For a 1 MW rooftop system in Haryana delivering 1,400–1,500 MWh/year at an avoided cost of ₹8.50/unit, annual savings are ₹1.19–1.28 Cr, yielding a payback of 3.5–4.5 years and 25–30% IRR over 25 years. The 40% accelerated depreciation benefit in Year 1 on a ₹3.5 Cr capex delivers a ₹42–46 lakh tax saving, effectively reducing the net capex to ₹3.05–3.50 Cr for profitable industrial facilities.

See our detailed solar installation guide for Faridabad and Delhi-NCR and Haryana solar EPC company guide for state-specific analysis.

Who Should Still Consider Open Access Solar in Haryana?

Despite the higher surcharge, open access solar remains relevant for specific Haryana industrial scenarios:

Consumers Above 3 MW Demand

For large industrial consumers (3 MW+) with rooftop constraints (limited roof area, structural limitations, industrial processes incompatible with rooftop installation), open access from Rajasthan solar parks may still be the only viable path to 100% renewable energy procurement.

Group Captive Structure

The additional surcharge does NOT apply to group captive structures where the consumer holds 26%+ equity in the solar generating company. A Haryana industrial cluster (5+ companies) forming a group captive Special Purpose Vehicle (SPV) to own a Rajasthan solar park can access open access solar without the additional surcharge. See our group captive solar guide.

Open Access for ESG and Renewable Certificates

Consumers targeting 100% RE (for RE100 commitments, Scope 2 zero pledges, or OEM supply chain requirements) may still use open access for the renewable energy certificate (REC) crediting mechanism, even if the pure cost arbitrage is narrower.

What Haryana Industrial Buyers Should Do Now

1. If you are planning a new solar project: Prioritize rooftop captive solar first. The HERC additional surcharge exemption for captive consumers is a significant financial advantage. For loads above your roof capacity, consider hybrid: rooftop captive up to roof limit + group captive open access for the balance.

2. If you are on existing open access solar PPAs: Review your contract pricing vs the updated ₹1.37/unit additional surcharge. If your PPA tariff was priced assuming lower surcharges, your net savings have been reduced. Check whether your PPA includes surcharge pass-through clauses.

3. If you are evaluating RESCO/OPEX solar: Under a RESCO/OPEX model, the developer structures the power as captive (behind-the-meter), making it exempt from the additional surcharge. This is an important advantage of well-structured RESCO contracts.

4. If you have a multi-MW load and limited roof area: Contact an experienced solar EPC company in India to evaluate group captive structuring — it offers open access solar economics without the additional surcharge burden.

Historical Trend of HERC Additional Surcharge

For reference, the HERC additional surcharge has been rising:

The upward trend reflects growing stranded cost burden as more consumers shift to open access — creating a reinforcing cycle where higher surcharges make open access less attractive and slow further exits, but for those already on open access, the cost rises.

This is a broader trend across Indian states — Maharashtra, Karnataka, and AP have all seen similar surcharge revisions in 2025-26. The economics of open access solar in India must always account for state-specific surcharge trends.

FAQ: HERC Additional Surcharge and Haryana Open Access Solar

Q: Does the HERC additional surcharge apply to rooftop solar consumers? No. Rooftop behind-the-meter solar (captive) consumers are fully exempt. The ₹1.37/unit surcharge applies only to third-party open access consumers.

Q: Is the ₹1.37/unit surcharge on top of the cross-subsidy surcharge? Yes. The additional surcharge and the cross-subsidy surcharge are separate charges. Open access consumers pay both — the cross-subsidy surcharge (approximately ₹0.80-1.10/unit in Haryana) AND the additional surcharge (₹1.37/unit for H2 FY2026).

Q: How often does HERC revise the additional surcharge? HERC revises the additional surcharge every six months — once for H1 (April-September) and once for H2 (October-March) of each financial year.

Q: How does Haryana's surcharge compare to other states? The ₹1.37/unit additional surcharge makes Haryana's open access costs one of the higher-cost frameworks in northern India. By comparison, Rajasthan typically has lower additional surcharges for its solar park consumers. States like Uttar Pradesh and Punjab have their own surcharge frameworks under UPERC and PSERC orders.

Q: Can I avoid the surcharge through group captive structuring? Yes. A group captive structure where the industrial consumer holds 26%+ equity in the solar SPV (Special Purpose Vehicle) qualifies as captive generation and is exempt from the additional surcharge. This requires minimum 26% equity stake and 51% consumption by the group captive members.

Q: What is the total additional cost for a 1 MW open access consumer in Haryana? At 1 MW demand consuming approximately 10 million units/year on open access, the ₹1.37/unit surcharge adds approximately ₹1.37 Cr to annual electricity costs vs the previous surcharge rate of ₹1.21/unit — a difference of approximately ₹16 lakh/year for H2 FY2026.

Sun Wave Technologies provides solar EPC, RESCO/OPEX, open access advisory, and group captive structuring services across Haryana, Delhi-NCR, Rajasthan, and UP. Contact us for a state-specific open access vs captive solar comparison for your industrial facility.

Sources

• SolarQuarter: HERC Imposes ₹1.37/Unit Additional Surcharge on Open Access Consumers in Haryana
• Mercom India: Haryana Hikes Additional Surcharge for Open Access Consumers for 2H FY2026
• Construction World: HERC Imposes Rs 1.37 Per Unit Surcharge on Open Access Consumers