India’s power sector, which is built around centralised generation and long-term power purchase agreements, is now undergoing gradual structural change. The steady growth of distributed renewable energy, particularly rooftop solar, is increasing surplus generation at the point of consumption. While mechanisms such as net metering and group net metering have supported rooftop deployment, they do not create an active market for local energy exchange.
Peer-to-peer (P2P) electricity trading has, therefore, re-emerged as a potential mechanism to enable the price discovery and direct exchange of surplus renewable energy within the distribution network. P2P trading allows prosumers – consumers who generate electricity, typically through rooftop solar systems – to sell surplus energy to other consumers through a digital platform. Electricity continues to flow through the existing distribution grid, and the distribution licensee remains responsible for network operations, balancing and billing. In effect, P2P introduces a limited commercial layer within the distribution system without altering its physical architecture.
In February 2026, the Delhi Electricity Regulatory Commission (DERC) and the Uttar Pradesh Electricity Regulatory Commission (UPERC) issued orders enabling a time-bound pilot for the interstate P2P trading of renewable energy under the India Energy Stack framework. The approvals permit rooftop solar prosumers in the licensed area of Paschimanchal Vidyut Vitran Nigam Limited (PVVNL) to transact with consumers in Delhi distribution areas, including Tata Power Delhi Distribution Limited (TP-DDL) and BSES Rajdhani Power Limited, within a defined regulatory structure.
DERC order: Scope and tariff architecture
In February 2026, the DERC approved a six-month pilot to operationalise both intra-state and interstate P2P solar energy trading. The approval followed a petition by TP-DDL seeking regulatory clearance to implement a structured pilot in coordination with PVVNL in Uttar Pradesh. The commission has permitted platform-based P2P transactions between eligible prosumers and consumers, with energy prices to be mutually discovered on the digital platform. These transactions are not treated as conventional open access supply but are embedded within the existing distribution framework. Electricity continues to flow through the licensed network, and billing and settlement remain integrated within the discom’s system. This provides explicit regulatory recognition of platform service fees while retaining oversight. With respect to wheeling, the DERC has exempted wheeling charges for P2P transactions undertaken within the licensed area of TP-DDL and within the territorial limits of Delhi. For interstate P2P transactions extending to Uttar Pradesh, the order clarifies that wheeling treatment will be governed by the UPERC.
The commission has also provided specific operational relaxations for the pilot phase. The earlier transaction limit linked to the capacity utilisation factor of the installed solar system has been removed. Penalties for under-injection and under-drawal of energy have been replaced during the pilot period to facilitate testing under controlled conditions. Further, the petitioner has been directed to approach the Central Electricity Regulatory Commission for waiver of interstate transmission system charges for interstate P2P transactions.
Billing integration has been given a priority status. For both intra-state and interstate P2P trades, settlement is to be integrated into existing billing systems, with P2P transactions reflected before conventional supply billing. TP-DDL and PVVNL have been directed to devise a uniform time-block mechanism to ensure seamless interstate scheduling and settlement. Importantly, the DERC has clarified that P2P energy transactions will count towards renewable purchase obligation compliance for the respective distribution licensees where the consumer is not an obligated entity. This provides additional regulatory certainty around the accounting treatment of traded renewable energy. Taken together, the DERC order establishes defined transaction charges, wheeling exemptions within Delhi, controlled deviation relaxations and billing integration safeguards. The pilot is explicitly framed as a regulatory test of interstate settlement architecture rather than a permanent alteration of retail tariff design.
UPERC order
In February 2026, the UPERC approved a six-month pilot for interstate P2P renewable energy trading under the India Energy Stack framework, a national digital initiative launched in June 2025 to enable consumer-centric electricity markets. The proposal was filed by PVVNL and provides regulatory clearance for Phase I transactions between PVVNL in Uttar Pradesh and Delhi-based distribution licensees. The pilot allows rooftop solar prosumers and eligible consumers equipped with smart meters to transact directly through a blockchain-enabled digital platform. The platform will integrate with smart meters, meter data management systems and discom billing platforms to ensure real-time energy accounting and digital settlement. Electricity will continue to flow through the existing distribution network, with no requirement for new physical infrastructure.
A reciprocal regulatory arrangement with the DERC has been recognised for managing wheeling recovery on the buyers’ side. To facilitate commercial viability during the pilot period, the UPERC has granted temporary regulatory relaxations. Penalties related to under-injection and under-drawal have been waived for six months. Cross-subsidy surcharge and additional surcharge applicable to interstate transactions have also been waived for the duration of the pilot, materially lowering the effective cost stack compared to standard open access supply. All participants are required to install smart meters capable of providing time-stamped import and export data to support accurate scheduling and settlement. Distribution licensees have been directed to coordinate on a uniform time-block mechanism to ensure seamless interstate scheduling discipline. The pilot will operate for six months, after which the DERC will review performance outcomes before determining the long-term regulatory framework.
What the two orders together signal for market design
The February 2026 orders show how regulators are trying to fit P2P trading into the existing distribution set-up without treating it as a separate supply route. The trading price is left to the platform participants, but the network and billing spine remain with the discoms. Over and above this, the discom continues to recover charges for use of its network. In the pilot design, Delhi has exempted wheeling for transactions undertaken within the territorial limits of the National Capital Territory, while Uttar Pradesh has approved a wheeling charge of Rs 1.01 per kWh for interstate transactions involving PVVNL’s network. The orders also formalise the platform layer through a transaction charge. Both sides have approved a total transaction charge of Re 0.42 per kWh, inclusive of GST, to be borne equally by the prosumer and the consumer through the billing settlement mechanism. Along with this, the UPERC has allowed temporary waivers of the cross-subsidy surcharge and additional surcharge for the pilot period. Accordingly, each participant will bear Re 0.21 per kWh through the billing settlement mechanism. They are what make the economics testable at this stage, because P2P transactions would otherwise carry the full weight of the retail charge stack that applies in an open access context.
Both orders place billing and reconciliation at the centre. Smart meters and meter data management systems feed the platform and validate injections and drawals, but the adjustment is ultimately reflected through the regular electricity bill. The requirement for a uniform time-block mechanism and the relaxation of under-injection and under-drawal penalties during the pilot period further indicate that the commissions want to first test whether scheduling and settlement can be handled smoothly across two jurisdictions before any scaling is considered.
Conclusion and future outlook
The six-month window effectively positions the initiative as a regulatory sandbox for interstate retail settlement under the India Energy Stack framework. The immediate question is not whether P2P trading can be done on a platform, but if it can be settled cleanly through existing billing systems while keeping network charge recovery and grid discipline intact. What happens after the pilot will depend on three key aspects. One, whether billing integration works without disputes on energy accounting and time-block reconciliation. Two, whether the charge structure remains revenue-neutral for distribution licensees once volumes rise. Three, how the pilot performs once temporary relaxations are rolled back and deviation treatment tightens. If the outcome is positive, the model could be extended in phases, but the direction of the two orders suggests that any expansion will remain tied to the same principles being tested now. Platform-based price discovery will be allowed, but network charges, settlement and the discom’s role in billing will continue to anchor the framework.