How Revised MERC Tariff Is Going To Affect The Consumers

The coronavirus pandemic has not only slowed down everyday life but has also wreaked havoc on India’s economy as businesses and trades all across the nation are floundering to stay afloat, and the average middle-class individuals are struggling to make ends meet in the absence of functioning work sources. In this bleak scenario, the recent revision of the Maharashtra Electricity Regulatory Commission (MERC) tariff has slashed the price for power distribution companies in an attempt to boost the state’s economy but is it enough? Or is it time to switch to more renewable sources of energy like solar street lights, solar inverters, etc.

Having been applied since April 1, the MERC rates have been reduced for the first time in 10-15 years. 

The Impact of the Revision on Consumers

The tariff has been reduced by 5-7% for domestic consumers, while industrial and commercial consumers now avail the benefit of the prices being reduced by 10-12%. But compared to these high benefits, the tariff has been barely reduced for agriculture consumers – farmers received only a 1% reduction in electricity costs.

These revisions are for a period of five years and will allow power distribution companies to supply to consumers at a much lower rate. 

Still find it costly? Well, all you have to do is switch to a “solar” lifestyle with VEMCL’s aid! From solar rooftop to ground mount solutions and off-grid to on-grid solutions, we are here to make your smart transition easier with your particular need specific customised solutions.

Does The Current Pandemic Situation Will Impact the Renewable Energy Sector?

The novel coronavirus 2019 has reset the global economy while the impact of the virus on the energy sector is no different. The slowdown and the lockdown have led to a remarkable decline in the demand for energy globally. While the after-effects of the pandemic are still being played out; there will be some impact on the renewable energy sector. 

The recent situation presents both opportunities and threats to the renewable energy sector. However, since the total energy generated using renewable sources is via an off-grid solar system or wind energy, the impact on this sector shall be rather low. Due to the slowdown in demand of renewable resources during this short-term, the number of new renewable energy projects may experience a slight downfall. In addition, the ongoing projects that have already been announced shall experience some delay altogether that will turn the demand of renewable energy at a low rate. 

-In the medium term, however, the demand for renewable energy is again expected to again reach the pre-pandemic situation and that shall lead to opportunities. The disruption of the supply chain has created a shortage of equipment like an on-grid solar system, panels for renewable energy providers in India. While this is negative for the short term, over the medium term, it has led to an excellent opportunity for the local manufacturers of equipment for renewable energy. Indigenous companies manufacturing equipment for renewable energy shall now be able to gain a foothold in this market.  An increase in the local supply of equipment shall give a boost to renewable energy production in India and other emerging economies.

The reset of the energy demand caused by a pandemic is a once in a lifetime opportunity for countries like India to pursue clean-energy more aggressively. The pandemic has made governments globally realize the importance of public health on the accelerating switch from the polluting fossil fuel economy to the renewable energy economy. The governments shall focus on providing incentives, subsidies and stimulus packages on the renewable sector to move away from the adverse effects of fossil fuels. 

For India, specifically, over the medium term, this pandemic offers tremendous opportunities. Since the oil prices shall be much lower, it will free-up the government’s resources w.r.t foreign reserves. The government may use these resources to give a boost to renewable energy, as a means to focus on long-term public health. These incentives and subsidies would help develop a complete ecosystem of renewable energy right from equipment manufacturers to service providers. Globally, the pandemic has made people realize to de-risk their entire supply chain from a single country. This shall provide new opportunities for the renewable energy sector in India to export their products and service globally in the post-pandemic world. 

All the after-effects of the pandemic would be realized once the situation is restored to normal post the pandemic. However, the short-term is going to be extremely difficult for the renewable energy sector globally. Reduction in overall energy demand, supply chain disruptions, unavailability of inspectors, servicemen and installers shall lead to short term adversity for the entire sector. However, the pandemic has created a tremendous opportunity for the governments over the globe to come together and focus on public health by giving a boost to global renewable energy demand through incentives and subsidies. For India, over the medium term, as a means to de-risk the supply chain, the pandemic shall open opportunities for renewable energy equipment manufacturers.