RegulationMay 2026

CERC's New DSM Norms: Wind and Solar Held to Coal's Standard by FY32

CERC's order of 31.03.2026 sets solar's X-Factor on a glide path from 100% to 0% by FY32 — but the tighter deviation tolerance bands took effect from 1 April 2026 already. Solar and hybrid move from ±10% to ±5%; wind from ±15% to ±10%.

X-Factor trajectory under CERC's order in Petition 9/SM/2025, dated 31.03.2026. Solar/hybrid glides 100 → 90 → 75 → 55 → 30 → 0 across FY27–FY32; wind glides 100 → 95 → 85 → 65 → 35 → 0 over the same years. Both hold at 100% in FY27, then solar is squeezed harder from FY29. Industry submissions in the order self-flag deviation revenue erosion of 40.9% even with aggregation, and up to 61.5% without it, once X reaches zero.

CERC's New DSM Norms: Wind and Solar Held to Coal's Standard by FY32 — slide 2 of 2

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By FY32, wind and solar generators will be held to the same deviation standard as a coal plant. That is what CERC's order dated 31.03.2026 sets in motion.

CERC's order under Petition 9/SM/2025 does two things at once — and only one of them is getting attention.

What everyone is talking about: the X-Factor glide path

Solar's X-Factor drops from 100% to 0% by FY32. Wind gets slightly more runway. FY27 is a grace year — X stays at 100%, meaning no effective change to deviation computation in that period.

What is flying under the radar: the tolerance bands

Tolerance bands tightened from 1 April 2026 itself, regardless of where X sits:

Solar / Hybrid: ±10% → ±5%
Wind: ±15% → ±10%

This is live now. A generator waiting for FY32 to plan for this has already been operating under the stricter band for months.

What it means for your portfolio

As X falls toward zero, deviation is no longer measured against what your plant could generate given available resource. It is measured against what you promised to deliver.

That is a fundamental change in where forecast risk sits. The formula gets stricter, the band gets narrower, and the P&L exposure grows with both.

Where storage enters

Deviation settlement penalises the gap between schedule and delivery. Co-located storage is the most direct instrument for closing that gap — absorbing over-generation inside the band and discharging to cover a shortfall, so the schedule is met even when the resource forecast is not.

We have broken this down in the latest edition of Watt's New. If you want to model your portfolio's DSM exposure under the new trajectory, write to us at contact@ingro.energy.

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