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