The Kerala State Electricity Regulatory Commission (KSERC) has released the draft ‘Renewable Energy and Related Matters Regulations, 2025’.

Stakeholders can submit their suggestions and objections to KSERC within one month.

These regulations apply to grid-interactive renewable energy systems, consumers and prosumers, captive consumers and generating projects, generating companies and distribution licensees, as well as other obligated entities.

All consumers and prosumers billed under the agriculture, domestic, and industrial tariffs are eligible to opt for net metering. However, they must have a minimum capacity of 1 kW and a maximum of 3 kW.

All consumers and prosumers are eligible to opt for net billing, and gross metering, behind-the-meter, virtual net metering, and group net metering systems.

For net billing and gross metering, the minimum capacity of the renewable energy generating system (REGS) must be 1 kW.

In net billing, the maximum REGS capacity a prosumer can install must not exceed the connected load in kW for connected load-based billing consumers, the contract demand in kVA for demand-based consumers, or 500 kW, whichever is lower.

For a behind-the-meter system, the maximum permissible capacity of the REGS installed behind the consumer’s meter must be limited to the connected load or contract demand. The decentralized renewable energy (DRE) project’s minimum capacity under the virtual net metering system must be at least 10 kW.

Eligible consumers will be responsible for the safe operation, maintenance, and rectification of defects in the REGS and storage, if applicable, up to the interconnection point.

The distribution licensee can disconnect any REGS and storage from its network at any time due to an accident or damage threat.

Every renewable energy-generating system must be equipped with an automatic synchronization device to ensure seamless operation.

Metering Infrastructure

All meters installed at the REGS must comply with the Central Electricity Authority (CEA) regulations and have a communication port with an RS-485 (or higher) standard.

The meter at the interconnection points for net metering, net billing, group net metering, and the generation meter in respect of gross metering and virtual net metering will be:

• Availability-based tariff (ABT)-compatible special energy meters (SEMs) for systems with a minimum capacity of 1 MW
• Smart meters for systems with a capacity ranging between at least 100 kW and below 1 MW
• Smart meters for systems with a capacity of less than 100 kW installed on or after April 4, 2027

Consumers with ABT-compliant and smart meters need not install a separate net meter. Additionally, existing prosumers with distributed renewable energy systems of at least 1 MW capacity must install ABT-compatible SEMs within six months of the notification of these Regulations.

The distribution licensee will be responsible for testing, installing, and maintaining the metering equipment, as well as ensuring its adherence to applicable standards and specifications.

Eligible consumers will procure a renewable energy generation meter, tested and maintained by the distribution licensee at their own cost.  This generation meter must conform to the applicable CEA Regulations.

The cumulative capacity of the distributed energy systems connected to the HT feeder of the distribution system will not exceed its rated capacity.

The cumulative capacity allowed to be interconnected with the distribution transformer will not exceed 90% of its capacity, and the DRE system on each phase of the transformer will not exceed 30% of the capacity of the transformer.

The maximum capacity of a single-phase inverter that can be connected to the system is 3 kW. Eligible consumers must submit the receipt of technical feasibility within 45 days.

Connectivity for IPPs and Captive Projects

The distribution licensee or the state transmission utility (STU) will, upon demand, provide connectivity for independent power producers (IPPs) and captive consumers who intend to install grid-interactive renewable energy generation systems.

The IPP and captive consumers must bear the cost of upgrading the transmission/distribution system to connect their REGS.

Any person generating electricity from renewable sources has the right to open access to the distribution or transmission system of the licensee or STU for transmitting and/or wheeling renewable energy.

Charges such as application fees, state load dispatch center/national load dispatch center charges, transmission/distribution losses, transmission/wheeling charges, reactive energy charges, deviation compensation charges, grid support charges, and surcharges will apply to anyone availing open access.

Virtual power plants (VPPs) must be registered with the distribution licensee, ensuring that real-time data exchange and monitoring systems are in place to track VPP operations and maintain grid stability and reliability.

All electric vehicle (EV) owners, charging station operators, and distribution licensees can participate in vehicle-to-grid integration within the state.

Renewable Purchase Obligation and Energy Storage Obligation (ESO)

The state Commission is mandated to promote cogeneration and generation of electricity from renewable sources. It must specify a minimum percentage of the energy generated from such sources to be procured.

Every obligated entity in the state will procure electricity generated from eligible renewable energy sources and install or procure an electricity/energy storage system (ESS) capable of delivering energy as a percentage of the electrical energy’s quantity.

The extent of energy stored in the ESS from renewable sources, as part of the ESO, will be considered a part of the total renewable purchase obligation’s fulfillment.

Within three months of receiving notification of these regulations, the Commission may designate an entity, such as a government agency, startup, NGO, or cooperative, as the state agency to monitor and enforce the functions under the regulations.

The state agency will subsequently create a web portal to share information about development within the state. Every obligated entity must enter its fossil fuel-based electricity generation and details of open access transactions within 30 days on the portal.

Tariff Determination

Tariff-based competitive bidding will be the preferred mode for power procurement by distribution licensees for all renewable sources. The tariff period for renewable energy projects will be the same as that of their useful life.

If necessary, the Commission may determine the generic tariff for each financial year(s) or for the control period for the electricity generated from renewable sources.

Until the KSERC specifies separate norms, the norms specified by CERC will be used to determine the tariff for the electricity generated from various renewable sources.

The determined generic tariff will be the upper ceiling limit. It will not prevent the generator and distribution licensee from agreeing to a lower tariff than that determined by the Commission.

The Commission can, upon receipt of a petition regarding tariff determination under the Electricity Act 2003, establish a project-specific tariff through an order on a case-by-case basis.

The tariff for renewable energy technologies will comprise a single-part tariff that includes a return on equity. The maximum allowable equity for this return is capped at 30% of the capital cost. It also includes loan capital, depreciation, interest on working capital, and operation and maintenance expenses.

The debt-equity ratio will normally be 70:30 of the capital cost for all renewable energy projects. A normative loan tenure of 15 years will be considered for determining tariffs.

The proceeds from the carbon credit generated by the approved clean development mechanism project will be shared between the generating company and the relevant beneficiaries.

Technology-Specific Parameters

For wind energy, the Commission will determine only the project-specific capital cost, considering prevailing market trends. The annual mean wind power density specified above must be measured at a hub height of 100 meters.

For small hydro projects, the normative capacity utilization factor must be considered as 30%, excluding pump mode operation.

For solar photovoltaic, thermal, and floating projects, the Commission will determine project-specific capital costs, considering prevailing market trends.

For renewable hybrid energy projects, decisions must be made on a project-specific basis, considering prevailing market trends. Grid-scale standalone battery energy storage systems must have a minimum round-trip efficiency of 85%.

The Commission can amend, suspend, modify, or repeal any provisions of these Regulations.

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