As per the recent gazette notification in ‘December 2020’, under clause no 11: “Consumer as prosumer(4)”, the Ministry of Power (MoP) has proposed to restrict net-metering for system capacities <=10 kW. Though this policy’s implementation hasn’t kicked in yet, there have been a significant amount of discussions/arguments among various stakeholders.
Today, a net-metering arrangement is prevalent across all the states. It also acts as one of the driving forces to adopt rooftop solar, apart from savings in utility bills. Unless the policymakers come with a uniform gross metering policy with an economically viable feed-in-tariff mechanism, the proliferation of rooftop solar as a sector will be affected substantially.
At SunEdison, we have collated our thoughts and summarized in below bullet points regarding possible steps, way forward which could be taken so that the growth of the rooftop solar market is not slackened or stagnant;
- Feed-in-tariff (FiT) for gross metering is not appropriately defined in most states, and the uniformity is missing. The viability of FiT is something the policymakers should ponder over. For E.g. Tamil Nadu having a FiT of Rs 2.08/Unit drives the consumers to install zero export relay or restrict the generation based on daytime usage rather than generating and exporting excess energy back to TANGEDCO.
- If the proposed gross metering policy gives leeway to the prosumers, at least to use their rooftop solar system for their captive purpose, it shall still make sense despite selling surplus energy at a lower FiT.
- Some states are compensating the exported no. of units at the Average Power Purchase Cost (APPC) rate, which is again the policymakers should ponder over considering the Average Cost of Supply (ACoS) tariff rather than APPC tariff.
- Time of Day (ToD) tariff should be standardized uniformly and implemented if states are coming with a minimal gross-metered FiT as we expect maximum energy generation during the peak time from the rooftop solar systems.
- Peer-to-Peer (P2P) Energy Trading can also be implemented so that the choice will be in consumers’ hands to decide, and they need not sell surplus energy at a smaller FiT. Uttar Pradesh Power Corporation Limited (UPPCL) and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) have set up a great example of blockchain enabled solar power trading. Such initiatives are highly anticipated in other states as well.
- As per the Government of India (GoI), we have a target to reach a capacity of 40 GW by the end of 2022, and considering the current scenario, we haven’t even got ⅓ rd of it. Hence, individual states can also come up with a capacity cap post which gross-metering can be implemented. This will help us reach the target, and concurrently it will allow the consumers to receive benefits from net-metering e.g., Last year, Maharashtra Energy Regulatory Commission (MERC) mentioned in their draft regulation that they will not levy any grid support charges on rooftop solar unless state cumulative rooftop solar capacity reaches 2 GW.
- Despite bringing gross-metered FiT, banking of energy (up to a certain%) can be imposed across states and facilitate the state DISCOMs.
In a nutshell, we can think of various mechanisms such as net metering, net billing, gross-metering, gross billing to tweak the existing net-metering policy. However, will that will serve the purpose of facilitating DISCOMs to overcome their revenue losses; Yes/ No, is still debatable. Whether just implementing gross-metering will remove the roadblocks from DISCOMs end and there won’t be any such hindrances in coming years is still questionable.
The future is bright for the solar industry in Indian with various policies and weavers offered by the government. A rooftop solar installation will help you save up to 90% on your electrical bills and also offers a high ROI.
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