India to allow rooftop solar installations up to 500 KW to be billed under “net metering”

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A house with a rooftop solar panel. Photo credit: Unsplash

In order to provide relief to the rooftop solar industry, the Indian government is proposing to allow rooftop solar installations with up to 500 kilowatt (kW) capacity to be billed under ‘net metering’. If the proposal is approved, those who have rooftop solar panels will receive higher tariffs from power distribution companies (discoms) for the surplus power sold to them.

The Union power ministry released a draft amendment to the Rights of Consumer rules, which it had laid down in December 2020, where the aforementioned relaxation has been proposed. Stakeholders have been asked to comment on the draft amendments by April 30.

The earlier version of the consumer rights rules, which allowed ‘net metering’ for only up to 10 KW rooftop capacities, was seen to impede the pace of capacity addition of rooftop solar in the country by disincentivising commercial and industrial users from installing such power generation capacities in their premises. 

Under this new scheme, consumers can earn around Rs 7 per unit (KwH) by selling the surplus power generated from their rooftop solar plants through net metering. As per the December 2020 mandate they were to be billed through “gross metering”, and compensated at around Rs 3.5 – Rs 4 a unit.

The national solar energy federation of India had requested Union power minister RK Singh to amend the provision on gross metering for larger rooftop consumers, pointing out that “investment to the tune of Rs 1,500 – 2,000 crore is either under contract or under commissioning phase” for such rooftop capacities and the new mandate “will create uncertainty and impact the ongoing projects”. Out of the total solar capacity of 36,910 MW, only 3,402 MW currently comes from rooftop solar.

The latest amendments, if approved, can however be a negative for the ailing state-run discoms, which are likely to lose revenue from their higher paying commercial and industrial consumers who opt for rooftop solar installation in their premises.

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