Maharashtra’s Solar Developers Apprehensive About Net Metering Rollback

The MERC has proposed that the state could adopt gross metering for all segments except residential


Solar installers in the state are vehemently opposed to the recently released Maharashtra Electricity Regulation Commission’s (MERC) draft regulation that said the state could go back to gross metering, rolling back net metering for all segments except residential.

Maxson Lewis, the managing director of Magenta Power, said, “Last year, the MERC attempted to push the gross metering agenda as a replacement to net metering. This was held back, given the joint push back. This year again, the MERC is pushing the same agenda under a different name. Effectively this proposed policy pushes back the return of investment (ROI) of rooftop solar.”

“We are not averse to this policy since, as a regulatory body, they have their right to do so. The question is the intent. Improving the profitability of state DISCOMs by ‘in a way taxing’ solar installation is not the right path. We would rather have the DISCOMs focus on improving their operational efficiencies, improve recovery, and stopping political largesse. Making the inevitable growth of solar to hide operational efficiencies is wrong at multiple fronts – economic and social,” he told Mercom.

According to the order, all categories other than the residential category may set up the renewable energy generating system only under the net billing arrangement (another name for gross metering).  The minimum size of the renewable energy generating system that can be set up under net metering and net billing arrangement would be 1 kW.

Madhusudan Lohiya from Sunlife Energies, along with 12 others, established Sunlife Energies, rooftop solar engineering, procurement, and construction (EPC) company in Maharashtra.

Expressing his objection on the draft regulation, he said, “Customers have just started getting results, and the word is gradually spreading. The industry has just started rolling in Maharashtra, and we were aiming for higher growth in the current financial year.

However, he fears that if the new regulation is implemented in Maharashtra, then it will result in the “complete death of the rooftop solar industry.”

In a letter to the MERC, Sunlife Energies has appealed to continue net metering arrangements both for residential and non-residential users as per the 2015 notification. The company has also requested the MERC not to make it mandatory to buy and provide net meter and generation meter to the end customers.

“Large manufacturers have already started focusing and diverting their sales efforts in states other than Maharashtra. Being one of the small players, we can’t afford to do so. If this regulation is implemented, then the entire solar industry will come to a standstill as it is not financially viable for the end-users to implement captive generation, Lohiya said.

Vipul Joisher, the director of Aditya Green Energy Pvt. Ltd, has also strongly objected to the change proposed by the regulation.

Quoting the Indian Electricity (IE) Act 2003, Joisher said that as per Section 9 of the Act, every individual in the country can generate power for captive use without any license.

“I feel that compulsory gross metering is a direct violation of the IE Act 2003. Apart from the act, which specifically exempts cross-subsidy surcharge for captive users, the explanatory memorandum filed by the MERC, clearly says that the commission wants to help DISCOMs collect cross-subsidy surcharge from small solar captive generators,” he added.

According to Joisher, the commission has been misguided by the false alarm raised by various distribution licensees not only in Maharashtra but throughout the country.

“This distribution licensee lacks vision, and due to the vested interest or reasons best known to them, they are opposing the installation of grid-tied solar systems on the ground. At present, Maharashtra’s peak demand is 18,000 MW, and the installed rooftop solar is just 266 MW, which is a mere 1.5% of the peak demand. This figure itself is proof that worrying about the grid security at this point is irrelevant,” states Joisher’s letter to the commission.

Vijay R Sangamnerkar, a residential consumer in Maharashtra has written a letter to the commission stating that if the regulations are implemented then it will not be viable for him to setup the project.

Sangamnerkar was planning to setup rooftop solar generation unit at his house to generate green power and also to reduce the electricity cost.

“I was planning to take loan to setup the plant in the next year. Now the new regulation provides a hybrid model of net metering up to 300 units and more or less gross metering there after. In fact putting roof top solar plant is not viable till you cross 300 units per month. In our state slab up to 300 units is subsidized category and rates are more or less same as what is proposed in the net billing system. So it hardly makes any difference if initial 300 units are accounted for under net metering or net billing,” he said.

He has requested the commission to continue net metering arrangements both for residential and non-residential users as per the notification of 2015.

Meanwhile, Chandrasekhar Bawankule, Maharashtra energy minister, has requested the commission to discard the proposed draft regulations, stating that it will undermine the progress of Maharashtra and discourage the use of solar energy.

Image credit: Tepsol