Why utilities are scared of introducing net metering polices for roof top solar projects?

While India has significant growth in terms of ground mounted solar projects, to implement rooftop solar projects in a similar way and the biggest bottle neck is net metering policy. While solar market in India is growing rapidly, and cost continuity decline solar is reaching to grid parity especially to commercial roof top consumers. This is the cause of concern to major utility if most of the commercial roof top owners shift to solar PV and start injecting there surplus electricity in to grid  utilities will lose significant revenue from these consumers as they make significant profits by charging higher tariff from these commercial and retail consumers. The retail tariff has already reached about 9 rs/kwh in some of the states for these consumers.


Rooftop solar PV still remain untapped and has significant potential as grid parity in this consumer category. The key to growth for roof top solar is Net metering which allows roof top owners electrical meter to be bi directional and grid can be used as a storage media for the roof top solar projects. Many utilities have been discouraging net metring policies, in fact recently Delhi introduced and was subsequently the discoms(distribution companies) have the resources to monitor and verify the FiT administration.In the city of Pune, almost 11% of the meters are faulty and this leads to lack of confidence in the data from these meters. It cites this challenge as one of the reasons why the Delhi Government scrapped its rooftop programme. Utilities in most of the states are experiencing a shift from direct sale to the open access. Open access allows consumers to optimize their electricity bills and source cheaper electricity through bilateral PPA from independent elect city generators. Last month open access consumer saved 450Cr due to cheaper electricity sourcing due to open access. As the spot electricity prices are fallen by 14% and many solar projects are available to do a bilateral PPA with the short term sale contract in the range of 4-rs/unit and long term supply contracts 3-4rs/kwh. It makes cheaper to source electricity through open access to the commercial consumers rather than buying electricity from Discoms at a tariff from 7-9Rs/kwh.

net metering

Roof top solar not only allows to take advantage of bilateral PPA but also provide reliable power supply option as generation is happening at the consumer end itself. If net metring is allowed electricity from roof top solar is still available to the consumers when the grid is down. While solar as become a reliable source of electricity supply and smart grid technology are available to integrate solar with the grid, Rooftop solar provides a demand side management (DSM) options to the utilities to meet there Day peak requirement. Rather than supporting the net metring utilities are differing the net metring policies as a result consumers are suffering for paying higher retail tariff as well as power cuts.

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Article by,

Dr Sanjay Vashishtha & Rishikesh Muthyal


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