India has set renewable power deployment target of 175 GW by the year 2022, which includes 100 GW from solar and 60 GW from wind energy. The target of 100 GW from solar includes 40 GW Rooftop solar PV Systems.
The power generated from these systems will be used for meeting the captive requirement of buildings and the surplus power, if any, fed into the grid under the net-metering arrangement of the respective state.
In most of the states that have opted for net metering, the respective SERCshave issued Net-Metering Regulations. In a net-Metering system, power generation in excess of self-consumption can be fed into the grid against which adjustment can be made in the consumer’s electricity bill, which are settled as per the state regulations. Ministry of New and Renewable Energy (MNRE) has put in place various initiatives including incentives to increase the deployment of rooftop solar across the country. MNRE has also notified the state-wise cumulative installation target for Rooftop Solar (RTS), while the states have also come up with their own targets for RTSinstallation.
Net Metering Regulations
Net metering regulations notified by respective State Electricity Regulatory Commissions (SERCs) provide the regulatory framework for grid interactive RTS. The net metering regulations stipulate limits on system size, limits on grid connected solar capacity, treatment of excess energy during the day and during peak hours, exemptions regarding banking, wheeling and cross-subsidy surcharge for third party owned rooftop systems, RPO obligations, compliance to CEA Regulations with regard to Installation and Operation of Meters, Connectivity to the Grid, Connectivity of the Distributed Generation Resources, Safety and Electric Supply and Grid Standards.
A review of net metering regulations undertaken by TERI in 2016 (TERI-KFW 2016) shows that most of the state regulations (except West Bengal and Himachal Pradesh) limit rooftop SPV system sizes from 1 kW to 1 MW. Regulations also limit the system size to 80–100 per cent of the facility connected load. Regulations also allow injection of solar power in the grid of up to 15–30 per cent of the rated capacity of distribution transformer. There is a lower incentive for excess generation from SPV systems beyond the captive consumption since most regulations offer lower financial benefits to supply solar power to the grid compared to what is achieved from self-consumption. The settlement period for any excess generation of solar energy is one year in most states.
Impact on Discoms
Grid interactive rooftop solar can help Discoms reduce T&D losses and the need for grid expansion. RTS can help meet peak loads if the solar generation profile matches the utility peak demand profile. For utilities with power deficit, RTS can be source of surplus energy to meet demand of other consumers served by the utility. In cases, where consumer are not obligated to meet RPO obligations, the benefit of the solar generation from RTS will go to the concerned DISCOM for meeting its RPO obligations. While there are various benefits of RTS for Discomsacross countries show that several challenges like technical, safety, financial and administrative- in adoption of rooftop solar (SSEF/Deloitte 2016).
Some of the issues that have a financial impact on the Discomsinclude reduction in energy sales compounded by the need to keep paying capacity charges for power procurement from contractual generators under long term PPAs, difficulty in recovery of cross-subsidy charges due to migration of high paying customers to RTS systems and injection of solar power by RTS during off-peak and withdrawal at peak periods.
Potential Revenue Loss
In India, the uptake of rooftop solar has been slow despite the fact that in several states rooftop solar energy has reached grid parity for commercial and industrial consumers. One of the reasons for this is the lack of enthusiasm on the part of Discomsin the installation of RTS in their service areas. There are both technical and financial reasons for this. The commercial and industrial sectors are the higher electricity rate payers for distribution utilities that make up (subsidizing) for the domestic and agricultural consumers who pay a lower tariff. Large scale deployment of rooftop solar PV, aimed at self-consumption of the electricity generated from solar power plants at the commercial and industrial sites, will potentially lead to revenue loss for distribution utilities. If this potential loss is not passed on to the remaining customers through a tariff hike, the utilities will have to bear this loss.
In addition, Discomswill have to bear extra administrative expenditure if RTS are installed in their service area (for undertaking site inspection, facilitating procurement of meters, making changes in billing software, developing capacity of its own workforce, etc.). The central government has recently recognized this administrative burden on Discoms. The draft for the SRISTI (Sustainable Rooftop Implementation for Solar Transfiguration of India) Scheme, that was launched by MNRE in December 2017, recognizes that Discomshave an important role in the expansion of RTS as they manage the distribution network and also have billing interface with grid-connected rooftop owner. The scheme also recognizes that Discomswill have to bear extra administrative expenditure in order to facilitate setting up of RTS in their service area. Therefore, MNRE has suggested that Discomsshould become the main implementation agency for implementation of the SRISTI Scheme and are being offered monetary incentive depending upon the annual growth of rooftop capacity in their service area. The incentive seeks to take care of expenditure related to ‘create an enabling eco-system for expeditious implementation of RTS projects in their area’.
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