Does Solar Reduce Demand Charges? Factory Guide

Does rooftop solar reduce demand charges?

Only partially — and on Haryana's HT tariff the fixed part is the smaller half. Solar cuts the energy (kVAh) you draw from the grid, but the fixed demand charge is billed on your sanctioned contract demand in kVA, so a 500 kVA factory pays 500 × ₹290 = ₹1.45 lakh every month on that line whether or not it has solar. Solar trims the demand charge only if you also right-size contract demand or reshape your peak.

TL;DR:

• Haryana HT (above 50 kW): fixed charge ₹290 per kVA of contract demand per month + energy ₹6.95/kVAh at 11 kV (HERC FY 2026-27, unchanged from 2025-26).
• Rooftop solar's savings land almost entirely in the energy line — worth roughly ₹50 lakh a year for a 500 kW plant at Haryana's 11 kV rate.
• To also cut the fixed charge: size the plant to your daytime base load, apply to revise contract demand downward, and consider BESS peak-shaving; and never let maximum demand exceed 110% of contract demand — the surcharge is 20–25% on the whole month's bill.

Last verified: 9 November 2026

Jump to: How Haryana bills HT factories · Why solar does not cut the fixed charge · Four ways to still lower it · 500 kVA worked example · FAQ

How Haryana bills HT factories (FY 2026-27)

HERC kept FY 2025-26 rates unchanged for FY 2026-27 (order dated 25 March 2026, effective 1 April 2026); DHBVN and UHBVN issued the same schedule in Sales Circular D-06/2026 and U-03/2026.

Two structural points matter for solar planning. First, Haryana bills HT energy in kVAh, so there is no separate power-factor penalty — reactive power is inside the unit count. Second, there is no time-of-day tariff in 2026-27, so daytime-versus-night timing matters for self-consumption but not for the rate itself.

Why solar does not cut the fixed charge by itself

Your demand charge is a function of one number: the contract demand sanctioned on your connection. Solar changes how many kVAh you buy, not how much kVA you are entitled to draw. Three consequences follow:

1. Night-shift peaks are untouched. If your maximum demand occurs after sunset, solar never sees it, and the grid must still supply your full peak.
2. Daytime peaks are only partly shaved. Solar reduces grid draw while it produces; a cloud edge or a motor start can still set your half-hour maximum demand from the grid.
3. Unused contract demand is pure cost. A plant sanctioned at 500 kVA that peaks at 380 kVA pays for 500 kVA every month — solar does not refund that; a contract-demand revision does.

There is also a sizing trap in the other direction: exporting solar into the grid can, in some metering arrangements, affect how maximum demand is recorded. Keep plant design consistent with your DISCOM's zero-export or export-limited requirements, and confirm the metering arrangement in writing before ordering equipment.

Four ways to still lower the demand charge

1. Size solar to the daytime base load. A plant sized to what the factory reliably consumes between 9 am and 4 pm maximises self-consumption and stabilises grid draw — the first input to any demand-charge strategy.
2. Revise contract demand downward after solar. Once solar flattens your grid draw, apply to DHBVN/UHBVN to reduce sanctioned contract demand. The saving is mechanical: every 100 kVA removed is ₹29,000 a month (₹3.48 lakh a year) at the FY 2026-27 fixed charge. The application is a standard DISCOM process — confirm current charges and timelines with your DISCOM office.
3. Add BESS for peak shaving. A battery that covers your short daytime peaks keeps recorded demand inside contract demand — and away from the 110% surcharge band. Compare options in our DG vs BESS guide and the NCR ToD-arbitrage business case.
4. Fix power factor. Because billing is in kVAh, capacitor banks cut billed units at the same real energy: at 0.90 PF a plant is billed ~11% more units than at 1.00. This is an energy-charge saving, but it compounds with solar.

Worked example: a 500 kVA factory with 500 kW rooftop solar

Assumptions: 11 kV supply, contract demand 500 kVA, maximum demand 470 kVA pre-solar, 1,50,000 kVAh/month grid draw, PF 0.95; solar sized to the daytime base load with zero export; yield 1,440 units/kW/year (the common North India planning average of 120 units/kW/month).

Before solar (one month, before electricity duty):

After 500 kW rooftop solar: the plant generates 500 × 1,440 ≈ 7.2 lakh units/year ≈ 60,000 units/month, all self-consumed. Grid energy falls by about 40% (60,000/1,50,000) in sun hours:

That is about ₹4.45 lakh a month saved (≈ ₹53 lakh a year) — almost all of it from the energy line. The fixed charge still costs ₹17.4 lakh a year. If solar and load management bring peak grid draw down to, say, 380 kVA, a contract-demand revision to ~420 kVA would cut the fixed charge by a further ₹23,200 a month (80 kVA × ₹290). The big number is solar; the demand revision is the polish.

Arithmetic check: 500 × ₹22,000 = ₹1.10 crore ex-GST CAPEX (Sun Wave reference at 500 kW); at ₹53 lakh/year of bill savings the simple payback is about 2.1 years before electricity duty, degradation and financing — refine with a site survey and your actual load profile.

Frequently Asked Questions

Can rooftop solar remove my demand charges completely?

No. Demand charges follow your sanctioned contract demand in kVA, not your consumption. Solar cuts the energy (kVAh) lines; the fixed charge only falls if your DISCOM approves a reduction in contract demand.

How much does rooftop solar save on an HT factory bill in Haryana?

At the FY 2026-27 11 kV rate of ₹6.95/kVAh, each self-consumed solar unit saves about ₹6.95 plus 47 paise FPPAS — call it ₹7.40 per unit before electricity duty. A 500 kW plant self-consuming ~7.2 lakh units a year saves roughly ₹53 lakh a year at those rates.

What happens if my maximum demand exceeds contract demand?

From 29 July 2026 in Haryana, a maximum demand above 110% of contract demand attracts a surcharge of 20% of the month's total charges (25% above 115%) — and a single half-hour reading is enough to trigger it. Keep headroom or enhance contract demand before adding load.

Should I reduce contract demand after installing solar?

If your recorded maximum demand falls well below the sanctioned level and will stay there, yes: each 100 kVA of contract demand removed saves ₹29,000 a month at the FY 2026-27 fixed charge. Apply through the DISCOM's load-revision process and confirm the applicable charges first.

Does solar help with the maximum-demand surcharge?

It can. By supplying part of the daytime load, solar lowers grid draw during sun hours, which helps keep the half-hour maximum demand within the 110% buffer. It cannot protect against evening or night peaks — that is a job for BESS or load scheduling.

Where can I see the official Haryana tariff?

HERC's FY 2026-27 order (25 March 2026) is published by the DISCOMs — DHBVN's Sales Circular D-06/2026 carries the schedule; the HERC press release confirms tariff levels were kept unchanged.