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New push needed for net-metering implementation


27 June 2016 | BRIDGE TO INDIA

New push needed for net-metering implementation

As the Indian solar sector continues to gather more momentum by the day, one area that often feels relatively neglected is rooftop solar. India’s rooftop solar capacity is currently estimated at 740 MW, only about 10% of total solar PV capacity in the country.

  • Delays in approvals, undefined responsibilities and accountability, unavailability of meters, restrictions on system sizes are some of the main issues that need to be resolved
  • International examples show that market wide adoption of rooftop solar can grow by up to 60% if net-metering is implemented effectively
  • Ensuring effective net-metering implementation should be the top priority of government and regulatory agencies

BRIDGE TO INDIA’s analysis shows that net-metering can be the single biggest government policy driver for increased adoption of rooftop solar with potential impact larger than that of capital subsidies or lower financing cost. International examples show that market wide adoption of rooftop solar can grow by up to 60% if net-metering is implemented effectively. Therefore, if India is to come anywhere close to meeting its ambitious target of 40 GW of rooftop solar capacity by 2022, the government focus should be on effective implementation of net-metering. The Central Electricity Regulatory Commission (CERC) issued its model net-metering regulations in 2013 and since then 27 states and union territories (UTs) have issued net-metering policies or regulations. However, progress on the ground remains slow and it is time to move to address the operational hurdles. A recent news report provides the best illustration of problems faced by consumers and investors for net-metering (refer).

Based on industry discussions, it seems that only a handful of states and union territories such as Andhra Pradesh, Telangana, Punjab, Delhi, Chandigarh and Karnataka have begun actual implementation. Some other states such as Haryana, Tamil Nadu and Rajasthan also seem to be catching on but there is a lot of work that needs to be done to ensure effective implementation. Delays in approvals, undefined responsibilities and accountability, unavailability of meters, restrictions on system sizes and inconsistencies on rules for interconnection of battery backed systems are some of the main issues that need to be resolved. Other area in which the policy framework needs to improve is to make it more friendly for BOOM/ BOOT/ lease models by removing ambiguity over open access (grid use) charges and mitigating power offtake risk for third party investors.

Rather than reinventing the wheel, state regulators can learn from each other to improve implementation and resolve other issues. Andhra Pradesh is a good example to follow for the application process, Karnataka already allows tri-partite signing of agreements with third-party investors and Punjab has explicitly waived off all open access charges. More flexibility is provided by Karnataka, Odisha, Andhra Pradesh and UTs as they allow both net and gross metering while Delhi’s solar policy allows virtual and group net-metering (refer).

A new model regulation by CERC collating the industry best practices and learning from actual on-the-ground experience will be extremely useful in giving a much needed boost to the rooftop sector. We believe that ensuring effective net-metering implementation should be the top priority of government and regulatory agencies.


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