Power Ministry Yields; Proposes Net-Metering Limit of 500 kW

After yielding to the representations received from the industry, the Power Ministry has proposed increasing the net-metering cap to 500 kW.

The Ministry of Power had notified the Electricity (Rights of Consumers) Rules, 2020 on December 31, 2020, under section 176 of the Electricity Act, 2003. And since its release, the provision of net metering in Rule 11(4) of the bill – which limits net-metering installations at 10 kW project site – has garnered unbounded reactions from the industry, especially the medium to small scale developers, with the general consensus being that the provision to limit net-metering is a ‘disaster’. And now, after yielding to the representations received from industry stakeholders on the provision, the Power Ministry has finally drafted an amendment to the bill – proposing a new and improved 500 kW limit for net-metering of rooftop solar systems.

The ministry has now invited comments/ suggestions from stakeholders on the new Draft Amendment Rules by April 30, 2021. And it will come into force once all necessary amendments are made post consultation with the industry.

In the new draft, the ministry has added in sub-rule to the Rule 2 of the Electricity (Rights of Consumers) Rules, 2020, the following definitions:

(a) “Gross-metering” means a mechanism whereby the total solar energy generated from grid-tied rooftop solar PV system of a Prosumer and the total energy consumed by the Prosumer are accounted separately through appropriate metering arrangements. For the billing purpose, the total energy consumed by the Prosumer is accounted at the applicable retail tariff and total solar power generated is accounted for at the feed-in tariff determined by the Commission.

(b) “Net-metering” means a mechanism whereby solar energy exported to the Grid from grid-tied rooftop solar PV system of a Prosumer is deducted from energy imported from the Grid in units (kWh) to arrive at the net imported/exported energy. The net energy import (or export) is billed (or credited/carried over by the distribution licensee on the basis of the applicable retail tariff. A single bidirectional energy meter shall be used for net-metering at the point of supply.

(c) “Net-billing or net feed-in“: A single bidirectional energy meter shall be used for net-billing or net feed-in at the point of supply. The energy imported from the Grid and energy exported from grid-tied rooftop solar PV system of a Prosumer are valued at two different tariffs. The monetary value of the imported energy is based on the applicable retail tariff. The monetary value of the exported solar energy is based on feed-in tariff determined by the central/state regulatory commission. The monetary value of the exported energy is deducted from the monetary value of the imported energy to arrive at the net amount to be billed (or credited / carried-over).

And for the Sub-rule (4) of rule 11 of the Principal Rules, the ministry has issued the following amendment:

• The arrangements for net metering /gross metering /net billing or net feed-in shall be as specified by the State Commission by regulation from time to time. Provided that where ever the regulations does not provide for net-metering/ net billing or net feed-in, the Commission may allow net metering to the prosumer for loads up to 500 kW or upto the sanctioned load, whichever is lower and net-billing or net feed-in for other loads.

• And in the case of Prosumers availing net-billing or net feed-in, the commissions may introduce time-of-the-day (ToD) tariffs whereby Prosumers are incentivised to install energy storage so that stored solar energy can be utilised by them or fed into the grid during peak hours thus helping the grid by participating in demand response of the Discoms.

• In case of net-metering/ net-billing or net feed-in, the distribution licensee may install a solar energy meter to measure the gross solar energy generated from the grid-tied rooftop solar PV system for the purpose of Renewable Energy Purchase Obligation (RPO) credit, if any.

• • Commissions may permit gross metering for Prosumers who would like to sell all the generated solar energy to the distribution licensee instead of availing the net metering/ net-billing or net feed-in facility. The feed-in tariff for gross metering shall be decided by the Commission as per tariff regulations notified for this purpose.”

The ‘draconian rule’ as some installers had labelled the net-metering cap in 2020 is finally getting amended, much to the respite of the rallying project developers and industry stakeholders.

Read the draft amendments here.