Solar Rooftop companies move Tribunal on KERC’s order

Net metering allows developers to sell electricity to the grid and deduct its value from their bill for the power drawn from the distribution company. The government encourages this system to promote renewable energy, but discoms in several states are hostile to this because they lose revenue for each unit of privately generated power.

Bengaluru: Developers of solar rooftop projects have challenged the Karnataka power regulator’s order in December seeking to do away with net metering for commercial and industrial consumers.
Net metering allows developers to sell electricity to the grid and deduct its value from their bill for the power drawn from the distribution company. The government encourages this system to promote renewable energy, but discoms in several states are hostile to this because they lose revenue for each unit of privately generated power.
Major developers including Amplus Solar, Fourth Partner Energy, Renew Power and Cleantech Solar have separately moved the Appellate Tribunal for Electricity against the order, people in the know said.
“They are proposing new models, influenced by Bescom (Karnataka’s main discom — Bengaluru Electric Supply Co). I suspect Bescom wants to buy any power we generate at a tariff much lower than that it charges for the power it supplies, and hence opposes net metering. The price it sets may well be so low that no projects can actually happen,” said a developer, requesting anonymity.
“The price is fixed by the KERC (Karnataka Electricity Regulatory Authority) based on the cost of panels that is available in the market. They will correlate that to the investment cost. Bescom will not get into the pricing issue,” a senior official at the discom told ET.
Calls and a message sent to the KERC chairman remained unanswered as of press time Sunday.
The developer said KERC’s December 9 order went against the spirit of the Electricity Act 2003, and if implemented it would strengthen the monopoly of discoms.
The KERC has ordered gross metering instead of net metering, where two separate unidirectional meters are installed — one for the power the entity buys and consumes from the discom, and the another for the power it produces and supplies. The tariff for the power supplied by the discom is likely to be much higher than the tariff at which it buys power from the same consumer, according to developers.
The KERC order pays lip service to the importance of renewable energy, but its content in fact discourages it, industry insiders said.
“The Government of Karnataka, under its solar policy 2014-21, has set a target of 2400 MW for grid connected rooftop generation projects to be achieved by March 2021,” the order said.
The KERC order includes a proposal to levy an additional surcharge and a cross subsidy surcharge on rooftop projects. “The commission is also of the view that the sale of energy by the third-party investor to the consumer attracts the payment of cross subsidy surcharge and additional surcharge,” the order says. Such charges have not been imposed on rooftop projects anywhere else in India so far and “doing so would increase the tariff by 60%”, the developer said.
“Not only is our business seriously impacted, these new regulations will also impede the aspirations of the people of Karnataka to adopt rooftop solar,” Amplus Solar chief commercial officer Sharad Pungalia said.
It is unclear as to whether the order will be applicable for future projects, commissioned projects or both.
Karnataka has installed 388 MW of solar rooftop projects so far, according to data collected by renewable energy consultancy firm Bridge To India.
The state power regulator had in 2018 tried to reverse a waiver on transmission and wheeling charges it had granted to open access projects, which too had irked developers.

Source- Economic Times