Gujarat Proposes Amendments to its Net Metering Rules for Rooftop Solar

Sets different rates for connections where injected energy exceeds the electricity consumed

December 27, 2019


The Gujarat Electricity Regulatory Commission (GERC) has issued a draft notification regarding the second set of amendments for its net metering regulations for grid-connected rooftop solar systems.

The new amendment states that the distribution licensee is to provide the net metering facilities to consumers, provided that the cumulative capacity to be allowed at a particular distribution transformer does not exceed the capacity of the distribution transformer. The earlier regulation mentioned the cumulative capacity to be allowed at a particular distribution transformer would not exceed 65% of the peak capacity of the distribution transformer.

Mercom spoke to a rooftop solar developer who said that “in the international markets, they allow consumers to install 80% of the peak capacity of the distribution transformer. Though the regulations now removed this cap on peak capacity, in effect, the cumulative capacity that is allowed here only means the average capacity of a distribution transformer which is much lesser than the peak capacity. The language is changed, but the benefit to the developers is not going to be much.”

Another notable amendment is the maximum rooftop solar installation capacity allowed at consumer’s premises. The earlier regulation mandated this to be a maximum of 50% of the consumer’s sanctioned load or contract demand but not more than 1 MW. In the new amendment, this rule applies to all consumers other than residential consumers and micro, small and, medium (manufacturing) enterprises (MSMEs). Whereas, for the residential consumers and MSMEs, the rooftop solar capacity installation allowed is irrespective of their sanctioned load or contract demand.

In its draft amendment, the state has come up with updated guidelines on how after consumption, the excess energy injected to the grid is to be billed. The amended regulation states that any energy injected to the grid before the commissioning of the project will be deemed as inadvertent power, and the consumer or the owner will not be eligible to receive any monetary compensation for it.

For each billing period, the licensee should show the amount of electricity injected by a consumer and the amount of electricity supplied by the distribution licensee. The billing for both will be separate and not be offset against each other. The earlier regulations had the same point but the amendment is on how this billing is done for the different segments of consumers and at what rate.

The earlier regulations stated that in cases where the electricity injected by the consumer exceeds the electricity consumed during the billing period; the distribution licensee would purchase such excess electricity at the Average Pooled Power Purchase Cost (APPC) rate determined by the Commission for the year in which the rooftop solar system was commissioned. This rate would be applicable for the whole life of the rooftop solar system.

Now the Commission is proposing different rates at which the distribution licensees will purchase excess energy from the consumers. For residential and government consumers, the distribution licensee will purchase such excess energy at the rate of ₹2.25 ($0.0315)/kWh or the rate specified by the Commission for Surplus Injection Compensation (SIC) from time to time for the whole life of the rooftop solar system.

For industrial, commercial, and other consumers, utilizing the energy attribute but not registered under the REC mechanism, the excess energy will be purchased at ₹1.75 ($0.024)/kWh.

Gujarat Net Metering Regulations

The amended regulations also declared that any dues by the distribution company (DISCOM) to the consumer that exceed ₹100 (~$1.40) must be paid at the end of the year and if it doesn’t exceed the amount, it is to be carried over to the next financial year.

The commission also added a new definition clause for MSMEs that fall under the scope of coverage of the regulations. Earlier, there were no provisions for MSMEs in the regulation.

The commission has invited suggestions and objections from stakeholders in the industry by January 15, 2020.

These draft regulations come on the heels of petitions filed by the Gujarat Urja Vikas Nigam Limited (GUVNL), along with its four subsidiary distribution companies, asking for the modification in the relevant regulations with regards to the purchase of surplus energy by distribution licensees from solar projects set up for captive use or third-party sale availing open access.

The GUVNL said that the change in the tariffs was necessary to maintain an equitable balance between projects set up exclusively for sale of power to distribution licensees and rooftop projects selling only surplus power.

Earlier, the GERC dismissed a petition requesting it to purchase surplus energy from open access solar projects set up for captive use or third-party sale at the lowest tariff discovered through competitive bidding or APPC. The commission stated that solar projects set up in the state of Gujarat and the capacity utilization factor (CUF) set up in other states vary from site to site and therefore are not comparable.

Recently, the state commission partly approved a petition filed by GUVNL to establish tariffs to procure surplus power by the distribution licensees from wind projects set up for captive use or third-party sale availing open access in the state.

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