Loading...

Uttar Pradesh deals a blow to rooftop solar


22 February 2019 | Arti Mishra Saran

Uttar Pradesh deals a blow to rooftop solar

In January 2019, Uttar Pradesh Electricity Regulatory Commission (UPERC) issued new Rooftop Solar PV Grid Interactive Systems Gross / Net Metering (RSVP) Regulations, 2019. These regulations supersede RSVP Regulations, 2015. Key features of the policy are as follows:

  1. Cancellation of net metering for commercial, industrial, institutional and government consumers;
  2. System capacity to not exceed 100% of contract demand and be within 1 kWp – 2 MWp;
  3. Surplus power generation under net metering compensated at INR 2.00/ kWh, far below APPC (average power purchase cost);
  4. Power injected under gross metering arrangement to be compensated at weighted average tariff of large-scale solar projects as discovered in competitive bidding in the latest financial year plus an incentive of 25%;
  5. Maximum aggregate capacity at local distribution transformer is increased by 3 times and set as 75%;
  6. DISCOMs to publicly provide information regarding available capacity of distribution transformers;

Cancellation of net metering for C&I consumers is a major policy setback and it would seriously affect growth of rooftop solar in Uttar Pradesh. It is not clear if already installed systems (223 MW capacity) will be grandfathered under the old regulations. If not, all these systems as well as systems under installation would become unviable overnight. C&I and public sector consumers account for an estimated 98% share of total installed rooftop solar capacity in the state.

C&I consumers save INR 8-12/ kWh payable for grid power by adopting rooftop solar. But under gross metering, net realisation would come down by more than half to about INR 4.00/ kWh – equivalent to weighted average tariff for large-scale solar project auctions in FY 2018 (INR 3.20/ kWh) plus 25% incentive. Not only is this tariff too low, timely payment from DISCOM is far from assured as state DISCOMs remain amongst the weakest in the country.

We understand that various market participants are lobbying for policy reversal but that appears unlikely. Tamil Nadu has already implemented such a change in somewhat ad hoc manner, while Maharashtra has also tried unsuccessfully to back track on net metering. The message is loud and clear – the DISCOMs are going to fight against free net metering (or indeed any form of net metering). In our opinion, policy volatility is one of the biggest risks facing this market. The industry needs long-term policy visibility and grandfathering of existing investments. Any changes should be introduced after due consultation and phased in to avoid drastic shocks.


Recent reports

India Solar Map | December 2023

India Solar Map | December 2023

India Solar Map 2023 is an info-graphic report covering growth of utility scale solar sector – national and state-wise commissioned and pipeline capacity, leading market players and portfolio details of top 16 project developers. Capacity addition in 2023 fell 51% YOY to 5,924 MW taking total utility scale solar capacity to 59,840 MW. Total project pipeline stands at a record 74,161 MW.

India Corporate Renewable Brief | Q4 2023

India Corporate Renewable Brief | Q4 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

India PV Module Intelligence Brief | Q4 2023

India PV Module Intelligence Brief | Q4 2023

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technology and rating, global market scenario, pricing trends across the value chain, key policy developments and market outlook.

India Solar Compass | Q4 2023

India Solar Compass | Q4 2023

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and policy announcements, equipment prices, financial deals and other market developments. It also provides market outlook for the next two quarters.

Inter-state OA — opportunities and challenges

Inter-state OA — opportunities and challenges

Inter-state transmission system (ISTS) open access (OA) renewable market is growing strongly on the back of multiple drivers including a waiver from ISTS charges together with decarbonisation pressure on corporates and streamlined transmission connectivity approval process. However, the ISTS route savings are viable only for projects commissioned by June 2026 (at least 75% ISTS charge waiver).

India Corporate Renewable Brief | Q3 2023

India Corporate Renewable Brief | Q3 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

To top