Is the Indian Rooftop Solar on Death-BED? Read and Keep Quiet …
By: Prem Nair
Tags: Indian, Renewable Energy, Solar Industry, Sunset, Rooftop Solar

The latest announcement by the Union Minister of State for Power Shri R.K.Singh about Electricity Rules 2020 (Rights of Consumers), while there are several provisions on empowering energy consumers, one major decision on the rooftop solar with current Net-Metering facility will have very serious impact on the growth of Rooftop Solar in India.

The new rule says ‘Net metering for loads up to 10kW and for Gross metering for loads above 10kW’.

With the existing Net-metering facility consumer uses the electricity produced by Solar directly and any extra units gets exported to the Grid and discoms gives credit of these units to consumers who can utilise the exported units during night or any time later. So the consumer have the right and he gets to use the power he produced at same cost he produced say Rs.1.20 to Rs.1.85 or so, much cheaper than what discom’s retail price. In this case, discom functions as a Banking facilitator even though some of them charge a nominal fee for this banking facility. Consumer will pay only for the extra power he consumed from the Grid.

In the proposed Gross-metering, all the Solar units produced by the consumer will be bought by the discoms at the same rate they buy from other large power producers i.e., around Rs.3.00 or lesser. In this case though the consumer produces own solar power from his solar plant, he will not have any right to use it directly but will have to sell it to Discom. For all his electricity needs he will have to buy from the discom at the retail price they sell which is much higher. Means consumer will have to buy power from discom at Rs.8.00 to 14.00 even though he produces his own Solar power at Rs.1.20 to 2.00. So with this new rule rooftop solar will become unviable as Discom will buy power produced by customer at damn cheap rate and sell it back to him on a much higher retail rate without doing nothing which is absolutely unfair.

With the new Gross-metering, the Return of Investment on a 12kW Solar plant at a cost of Rs.6.00 lacs will be 15 years or more instead of 4 years of Net-Metering. So why anyone will invest in the Solar Rooftop plants as its not a profitable proposition either to the consumer or to the financier. Who will spend money and go through the hassles if there are not any real benefits?

GOI has set a target of 40 GW of Rooftop Solar Power by 2022.

Even with various incentives such as subsidies and net-metering etc., we could achieve only 10–12% of the said target so far. So now with the introduction of Gross Metering, the consumers will shy away from Solar as there will be no clear benefits. If you don’t have the rights to use what you are producing and need to buy on higher price, then why anyone should produce it at all. Unable to decode the logic behind this newly published rule.

In a recent study it was pointed out that, one major reasons for the slow growth of Rooftop solar in India is the discouraging actions from discoms. They look at Solar as their competition and put all sort of impediments during the project and this is the experience of every EPCs and consumers across India. Another argument is discoms lose income when big solar projects get commissioned. Any such reduction of income should be reorganized with different means and not by harming and destroying a futuristic industry. If this new rule is to satisfy discoms and keep them in good humour, then how the consumers interests and the future of Rooftop solar can be taken care?

More over, the introduction of 10kW limit on net-metering will remove major chunk of consumers who are having more than 10kW requirement. This will lead to exclusion of several segments of consumers such as small & big housing societies, educational institutions, hospitals, small and medium commercial establishments, religious places, NGOs and trusts and many more where the requirement is higher than 10kW.

Needless to say that in-spite of all push by the Govt, only 10% -12% of Rooftop solar target is achieved so far. Now with this new changes it can be easily predicted that today’s 12% growth may easily slip to 1–2%. So far there were several big rooftop projects commissioned with net-metering as there were visible benefits to consumers. So post implementation of gross-metering all such projects and any projects above 10kW will dry up as no consumer will be willing to invest in solar and they will be forced to live with Discom’s whims and fancies; which is exactly what the discoms wish to happen that the consumers remain with them as their milking cows for ever. The sad part is, in this whole process we are putting the Indian Rooftop Solar ambition on deathbed and it may remain on ventilator for some time and ultimately will have a death or remain as mutilated child.

Also the this will seriously impact thousands of Solar EPCs, integrators, solar professionals, vendors, suppliers, direct and indirect partners who are part of this industry and their families. Already the Industry is suffering badly due to unpredicted high price rise that’s happening recently on solar components. Several on-going projects and newly acquired projects are badly hit and most of them are stalled or on hold till the price stabilizes back. If we look back, the last 2 to 3 years were truly traumatic to the Solar Industry with several uncertainties that had pushed them to the wall, though Solar is looked upon and celebrated as the futuristic energy source and saver of this planet from global warming and environmental degradation.

Here we have a choice, read this and take a stand and do your part in support of this cause or read this and keep quiet and forget ….

Prem