Promising Prospects

Net metering could give a boost to rooftop solar uptake

Net metering can play a key role in the uptake of rooftop solar installations. India has a 100 GW solar capacity target by 2022, of which 40 GW is to come from rooftop solar and the remaining from grid-connected projects. However, as of March 2018, India’s rooftop solar capacity stood at  around 1.5 GW, which is significantly lower than the target.

Net metering means “spinning the meter backwards”. The net metering mechanism allows for a two-way flow of power, wherein excess electricity from a rooftop solar photovoltaic (PV) system can be fed back into the grid, and power  from the grid can be procured when the solar plant is not producing power. The consumer is billed only for the “net” electricity (total consumption minus own PV production) supplied by the discom, which depends on the type of consumer and the size of the rooftop project. Net metering thus promises an environment-friendly and power efficient electricity evaluation system. It provides an easy option to produce electricity from renewables and to get connected to the grid at the same time.

Almost all states have net metering regulations for rooftop solar installations, and a few have both gross metering and net metering regulations in place. Notably, Uttar Pradesh and Andhra Pradesh are among the nine states that have policies for both gross metering and net metering. In fact, Uttar Pradesh, Delhi, Haryana, Chhattisgarh and Chandigarh have made rooftop solar installations mandatory for all establishments, except residential buildings/complexes. The Central Electricity Authority has notified technical specifications on net metering for over 33 kV interconnections to the grid. Net metering regulations, in most states, cover up to 1 MW installations, with individual system sizes ranging from 30 per cent to 150 per cent of the sanctioned load.

Issues and concerns

It is not the lack of policies and regulations, but the lack of proper implementation that is impeding the growth of rooftop solar in the country. Even the states that allow net metering have a cap on the amount of power that can be fed back into the grid.

Further, significant delays in obtaining approvals for net metering connections are driving even willing customers away from installing large systems, with many of them opting for smaller set-ups to reduce bills. The financially weak state-owned discoms are reluctant to provide approvals for rooftop projects and net metering for commercial and industrial customers as they are the highest revenue-earners.

However, net metering has its own set of challenges. A key  issue is the lack of awareness about regulations and policies at the local level. While many states have announced net metering guidelines, they have not done enough to educate local utility officials and the general public.

Another concern is that the grid is not stable in most parts of India. For effective net metering, the grid should be stable and available at all times. Since there are not any inverters that can flip the power to be used by a household during load shedding, the consumer has to bear the generation loss in such events. This raises an important question regarding the use of batteries in a net metering-based rooftop solar system.

The challenge of limited availability of solar power also needs to be resolved. The best solution is to make storage a viable option. This will help address the issue of grid instability, as storage will reduce the dependence on the grid to a certain extent.

However, it will take a year or two for storage costs to become economical. Tariff slabs for selling power to a utility are different for each consumer category, thereby reducing the incentive for setting up such projects. In fact, approvals for net metering take longer than the gestation period of the project.

The way forward

In India, net metering can be an important incentive for consumer investment in onsite renewable energy generation and also a motivating factor for consumers to utilise renewable energy. Apart from net metering facilities, improvements in inverter technology and battery storage are necessary to promote the rooftop solar segment. In addition, policy changes should include guidelines for availing of renewable energy certificates, meeting solar purchase obligations, etc. Clearly, net metering can become a success if it is implemented properly, backed by regulatory support that includes the interests of all stakeholders in the rooftop solar segment. Overall, once installation and storage costs come down, greater traction can be expected in this segment.

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