Kerala Orders DISCOMs to Give Net Metering to Prosumers on a First Come, First Serve Basis

Asks DISCOM to establish a renewable energy cell within a month


The Kerala State Electricity Regulatory Commission (KSERC) has issued new regulations called the ‘Kerala State Electricity Regulatory Commission (Renewable Energy and Net Metering) Regulations, 2020’ in which the state has directed the distribution licensees to constitute an in-house renewable energy cell to promote renewable deployment in the state within one month.

As reported by Mercom in September 2019, the KSERC had issued a draft of net metering regulations for renewable systems and had called for a public hearing and suggestions.

The new regulation says that the state will also penalize distribution licensees if they cannot stick to the timelines prescribed by the Commission. In case of failure to meet timelines prescribed under these regulations, a penalty of ₹1,000 ($14)/day for each day of delay will be imposed. The penalty accrued during the year will be deducted from the return on equity of the distribution licensee for that year.

The distribution licensees have been directed to provide net metering arrangements to prosumers on non-discriminatory and first come, first serve basis within 10 days from the date of submission of the approval of the renewable project from an electrical inspector. If the DISCOM is unable to provide a net meter within ten days, then the consumer can purchase the net meter at his own cost. The new regulations added that renewable energy systems installed by a prosumer at his premises should not be less than 1 kW or exceed 1 MW capacity.

If the domestic consumers have a connected load up to 20 kW, they can install a renewable project of up to 20 kW, irrespective of the connected load.

The maximum capacity that can be installed by a single-phase consumer will be limited to 5 kW.

Nevil Jose, senior manager at Inkel Limited, a solar developer, informed Mercom, “As per earlier regulations, the DISCOM would allow connectivity for solar projects up to 15% of the distribution transformer capacity, which limited the number of domestic solar installations. Now, the same has been revised to 75%, and therefore, an increase in the number of domestic rooftop solar PV installations is expected.”

The prosumer will be exempted from the payment of transmission and wheeling charges and cross-subsidy surcharges for the electricity generated and consumed under the net metering facility.

The regulation also talks about banking facilities for prosumers. Here, it states that the energy injected by the prosumer exceeds the energy consumed during a billing period; the excess energy can be banked with the distribution licensee. This banked energy will be adjusted with the subsequent billing periods. For each billing period, the distribution licensee has to mention in the bill the generation details (such as normal, peak and off-peak hours) recorded in the energy meter and the total generation from the renewable systems.

Distribution licensees, captive consumers, and open access consumers in the state will have an obligation to either generate or purchase the amount of renewable energy as a percentage of the total consumption as a part of their renewable purchase obligation (RPO).

Kerala Renewable Purchase Obligation (RPO) Targets

In the year 2019-20, the RPO for renewables was 8% for non-solar and 4% for solar (totaling to 12%). For the year, 2020-21, non-solar RPO is 9% and 5.25% for solar, a total of 14.25%.

For the following year, 2021-22, the percentage of non-solar has been increased to 10.25%, and solar will be at 6.75%, making a total of 17%.

In case the distribution licensees fall short of complying with the RPO, they will be allowed to purchase renewable energy certificates (RECs).

If a prosumer has a renewable system with more than 1 MW capacity, it will fall under grid-interactive renewable projects.

The grid-interactive renewable projects will also apply to a captive consumer who has installed renewable systems at a location different from the location of its usage within the state.

An independent power producer using the transmission or distribution system of the utility for third-party sales will also come under the purview of the new regulations.

In the case of the renewable energy generator or captive generating project, the captive consumer and the open-access customer should install special energy meters (SEM) for energy accounting in terms of generation, transmission, and consumption.

Further, 5% of the energy injected into the grid by prosumers having a renewable energy system of more than 1 MW will be accounted for grid support charges, and the remaining 95% will be treated as net energy.

A captive consumer using the transmission and distribution system of the licensee to wheel the power generated from the renewable energy system to a different location in the state needs to pay transmission and wheeling charges and transmission and distribution losses as approved by the Commission. Consumers purchasing renewable power through open access, need to pay cross-subsidy charges along with transmission and wheeling charges and transmission and distribution losses.

Generic tariff for solar power and small hydro projects of 5 MW and below is set as ₹3.66 ($0.51)/kWh and ₹5.91 ($0.83)/kWh respectively without accelerated depreciation. While the generic tariff considered for solar is for 25 years, it is 35 years for small hydro projects. Generic tariff for wind projects of 25 MW and below is ₹4.10 ($0.57)/kWh without accelerated depreciation for 25 years. This tariff is for projects commissioned with the financial year 2019-20.

Kerala - Generic Tariff for Electricity Generated from Renewable Energy Sources for FY 2019-20

Recently, the Maharashtra State Electricity Distribution Company Limited also proposed for a considerable grid support charges for net metering rooftop solar systems with a capacity of over 10 kW. Following the proposal, the Maha Solar Sangathan expressed its concerns over the development.

As per the KSERC’s new regulations, 80% of the net energy injected besides during peak hours will be allowed to be adjusted against the peak hour consumption. But the net energy injected during peak hours will be adjusted 100% during peak hours, and the balance will get adjusted at 120% during other time blocks.

Around 95% of the banked energy will get adjusted in the subsequent billing period, and 5% will account for banking charges of the distribution licensee.

If a captive consumer is using the transmission or distribution system of the licensee for wheeling the energy generated from the renewable projects to a different location within the state, then he will be required to pay transmission, wheeling charges including the transmission and distribution losses.

These regulations will apply to all the existing and new grid-interactive renewable energy systems, consumers, prosumers, and captive consumers, captive generating projects, generating companies, distribution licensees and licensees, and obligated entities.

Previously, the Kerala Government has launched a program called “Soura” to add 1,000 MW of solar projects to the existing capacity of Kerala State Electricity Board Limited by 2022. The projects will be implemented under the Urja State Kerala Mission and will be executed to fulfill the state’s renewable purchase obligation.


Image credit: Envious Energy