Rooftop Solar Sector to be Negatively Impacted by Proposed Rules for Power Consumers

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New rules have been proposed by the Govt. for the energy segment, which include : Fixing Automatic Compensation to consumers for delayed service and regulations for grid connected/interactive solar rooftop systems.

As per the draft rules, net metering of loads upto 5KW (kilowatt) and gross metering of loads above 5KW has been suggested. The Govt. has sought comments and views from all concerning stakeholders by Sept 30th on the draft proposal.

To understand the impact of these proposed rules, it is important to understand the meaning of a few terminologies.

First of all, a grid connected solar power system, or a grid interactive solar power system, as the name suggests, is a solar power system connected to the main grid. Now, the power produced by the solar power plant can be consumed in two ways, depending on the law the land, through either net metering or gross metering.

In net metering, the bills of electricity consumers, who also have solar rooftop system, are adjusted against the solar power, they add to the grid. In other words, in net metering the consumer, consumes the power that is produced by the rooftop solar power plant and the excess energy that is produced through the solar power plant, is directed to the grid. This excess energy can be utilised by the consumer, when the solar power plant is not functional or produces less power for e.g., during the night time,or during cloudy wether.

In gross metering the power produced by the solar power plant owned by the consumer, is sent to the grid in its entirety. The grid compensates the consumer at a fixed feed-in-tariff. The extra power required by the consumer, apart from the units produced by the solar power plant, is purchased by the consumer from the grid at the retail supply tariff.

The feed-in tariff and the retail supply tariff are typically different rates and more often than not, the retail supply tariff is greater than the feed-intariff.

India has a target of installing 10,000 MW of solar power by 2022 and of that 40,000 MW is targeted from the rooftop solar segment. At present (till June 30th) , according to a Bridge to India report, India’s installed solar rooftop capacity is about 5,953 MW. If the proposed policy, becomes the rule. the growth in the rooftop solar segment will come to a grinding halt, as it will not only affect consumers, but rooftop solar power installers as well.

Adoption of solar rooftop systems is affected wherever, gross metering system is adopted. For instance, in Feb 2020, developers of solar rooftop projects have challenged the Karnataka Power Regulators order in Dec 2019, seeking to move away from net metering for commercial and industrial consumers and adopt gross metering. Major developers like, Amplus Solar, Fourth Partner Energy, Renew Power etc. have separately moved to the Appellate Tribunal for Electricity, against the order, as per a report by the Economic Times.

The KERC’s order, if implemented will strengthen the monopoly of Discoms, hurting both the interests of the consumers as well as the project developers. Apart from Karnataka, net metering was also cancelled in Uttar Pradesh in 2019, which experts believe is a major policy setback for C&I consumers.

The same policy if implemented nation wide would negatively impact small rooftop developers and will discourage consumers from installing solar power plants, thereby, hampering the growth of the sector altogether.

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