net metering

Net metering regulations in India: As solar makes inroads, DISCOMs push back

In last few months, it is seen that there are regressive net metering orders/ regulations from state governments in certain key states. Uttar Pradesh, Tamil Nadu, Rajasthan and Maharashtra are some of the states which have taken such measures. In Uttar Pradesh, under new net metering regulations, issued in Jan 2019, net metering is not available for connections for commercial, industrial and public buildings. They can only opt for gross metering. Net metering will be only available to residential consumers with system size ranging from 1 kW to 2 MW. Excess electricity will be adjusted at fixed price of INR 2/ unit which is much lesser than current APPC rates as well. Also it is still not clear if old systems having net metering connections will be exempted from these new regulations or not.

In Tamil Nadu, in a recent order issued in March 2019, Tamil Nadu Electricity Regulatory Commission (TNERC) allowed net metering connections only for LT consumer category. The existing consumers under net metering scheme shall continue to be governed by its 2013 regulation only. Under new order, surplus electricity will be adjusted at 75% of the pooled cost of power purchase notified by the Commission for the respective financial year or 75% of last feed in tariff determined by the Commission or 75% of tariff discovered in latest bidding whichever is less. This is way lesser than the earlier proposed tariffs.

Rajasthan also recently reduced banking period from 1 year to 1 month for rooftop systems for commercial and industrial buildings.  This change has raised question on the viability of several projects particularly installed on educational institutions, as most of these systems need banking provision during holiday period/ non operative periods on a regular basis

Recently, in a petition, Maharashtra State Electricity Distribution Company (MSEDCL) also proposed to shift from net metering to gross metering. To discourage net metering connections, MSEDCL has also proposed to start levying wheeling charges on rooftop solar plants.

Table 1.1: Net metering regulations summary across key states (as of June 30, 2019)

State Metering arrangement Eligibility DTR capacity Excess electricity Exemptions
Delhi Net metering 1 kW- 1 MW   Maximum plant size <100% of sanctioned Load 15% To be adjusted at end of FY at APPC Banking, wheeling & cross subsidy surcharge
Andhra Pradesh Net metering as well as Gross metering Capacity <= 1MW 60% at LT level and 100% at HT level To be adjusted at average cost of supply Distribution losses and charges
Uttar Pradesh Net metering only for residential consumers. Others can opt for gross metering 1 kW- 2 MW 75% Adjusted at INR 2/ unit Exemption from wheeling & cross subsidy surcharge if applicable Electricity duty for ten years shall be exempted for sale to Distribution licensee, captive consumption and third party sale for projects set up within the state
Tamil Nadu Net metering only applicable to LT consumers (From Mar 25, 2019 onwards) Capacity: 1 kW – 1 MW   Maximum plant size < 100% sanctioned load 90% Excess energy to be paid at 75% of APPC, 75% of last FIT determined by commission or 75% of tariff discovered in latest bidding, whichever is less Consumer category solar will have electricity tax exemption of two years
Maharashtra Net metering Capacity < 1MW (with a variation of 5%) 40% To be adjusted at end of FY at APPC Banking, wheeling & cross subsidy charges
Gujarat Net metering as well as Gross metering Capacity < 1 MW Maximum plant size < 50% of sanctioned load 65% To be adjusted at end of FY at APPC Transmission charge, transmission loss, wheeling charge, wheeling loss, cross subsidy surcharge, electricity duty
Karnataka Net metering as well as Gross metering Maximum plant size < 150% of sanctioned load limits of solar systems: Up to 1MW for HT consumers, Up to 50 kW for 3 phase LT consumers 80% To be adjusted at end of FY at APPC Wheeling, banking, cross subsidy charges if applicable, Value Added Tax (VAT)
Rajasthan Net metering Capacity: 1 kW – 1MW    Maximum size < 80% of sanctioned load 30% To be adjusted at end of FY at APPC Banking, wheeling & cross subsidy charges
Telangana Net metering as well as Gross metering Capacity < 1MW Maximum size for commercial, industrial < 80% of sanctioned load for residential and government 100% of sanctioned load 50% Half yearly settlement (June & December) Any non adjusted electricity credits shall be paid as per the rates notified by TSERC Distribution losses and charges, electricity duty, cross subsidy surcharge, VAT
Haryana Net metering only Capacity < 1MW 15% To be adjusted at end of FY Banking, wheeling & cross subsidy charges
Chhattisgarh Net metering only 50 kW – 1 MW   40% To be adjusted at end of FY at the rates notified by CSERC NA
Madhya Pradesh Net metering as well as Gross metering Upto 2 MW 15% To be adjusted at end of FY at APPC Banking, wheeling, cross-subsidy surcharges & electricity duty, no liability of property tax, exempted from VAT and entry tax.

Source: SERC’s website, JMK Research