Maharashtra's bold step to reduce power tariff: Here’s how much you will save

Devendra Fadnavis

In a landmark move, the Maharashtra government has announced a phased reduction in electricity tariffs by 26% over the next five years, beginning with an immediate 10% cut in the first year. Chief Minister Devendra Fadnavis, who also holds the energy portfolio, confirmed the decision, calling it the first such reduction in the state’s history.

"Good news on electricity tariffs! For the first time in the State’s history, electricity tariffs will be reduced — starting with a 10% cut in the first year and a total 26% reduction in phases over the next 5 years," Fadnavis posted on X. He credited the Maharashtra State Electricity Regulatory Commission (MERC) for approving the petition filed by state-run utility Mahavitaran, which had sought a tariff cut instead of the usual requests for hikes.

The tariff reduction will apply to all consumer categories, including domestic, industrial and commercial. Around 70% of households, which use less than 100 units per month, will see the maximum 10% reduction in the first year, according to the Chief Minister’s Office (CMO). More than 45 lakh farmers and urban consumers are expected to benefit from the move, as reported by Pune Pulse.

Households with smart meters will receive an additional 10% discount for daytime usage under the Time-of-Day (TOD) metering system. Those generating solar power at home will also enjoy extra incentives.

The tariff cut is part of Maharashtra’s broader shift towards renewable energy. Fadnavis highlighted that the state’s increasing reliance on green energy in power purchase agreements will help reduce electricity procurement costs in the long run.

Meanwhile, the Mukhyamantri Saur Krishi Vahini Yojana 2.0, a solar-powered agricultural feeder scheme, is being implemented "on a war footing" to ensure daytime electricity supply for farmers, PTI reported. The government aims to install decentralised solar systems with a target capacity of 16,000 MW by December 2026.

Historically, power distribution companies have sought tariff hikes from MERC. This marks the first time a reduction has been approved, signalling a potential shift in the state’s energy affordability strategy.