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					</table>The Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) has expanded net metering for distributed solar photovoltaic (DSPV) projects to all consumer categories and raised the maximum permissible capacity to 1 MW from the 500 kW <a href="https://teams.live.com/l/message/19:uni01_loolse7pjyawmulzam422vpmyklpjj6pdiyvk77onrymnkud24kq@thread.v2/1787663747253?context=%7B%22contextType%22%3A%22chat%22%7D" target="_blank" rel="noopener">proposed</a> in its draft regulations.
The Commission has also dropped its proposal to mandate energy storage for solar projects above 10 kW, making battery storage optional under the final KERC (Grid Interactive Distributed Solar Photovoltaic Plants) Regulations, 2026.
Net Metering Expanded
All consumer categories can now install DSPV projects under net metering. Projects must have a minimum capacity of 1 kW, while the maximum capacity is the consumer&#8217;s approved load or contracted demand, or 1 MW, whichever is lower.
The draft had proposed a maximum net metering capacity of 500 kW and restricted eligibility to specified consumer categories.
The expanded net metering provisions will remain in force until the cumulative installed capacity of projects under net metering, virtual net metering (VNM), and group net metering (GNM) reaches 3 GW in Karnataka.
Distribution companies must publish monthly data on cumulative approved and commissioned DSPV and solar photovoltaic capacities. Karnataka Renewable Energy Development Limited must consolidate and publish statewide data every month.
The final regulations also allow net metering consumers to switch to net billing, gross metering, or behind-the-meter arrangements once during the project&#8217;s life.
Mandatory Storage Dropped
KERC has removed the mandatory energy storage mandate for certain distributed solar installations.
The draft regulations had proposed that DSPV and solar projects above 10 kW, except behind-the-meter systems, must install energy storage equivalent to at least 20% of their generation potential.
Under the final regulations, consumers can instead opt to use hybrid grid-tied inverters with batteries and utilize stored electricity for self-consumption.
KERC will review the requirement for distributed energy storage at the prosumer level two years after the regulations are notified or when the cumulative installed capacity under net metering, VNM, and GNM reaches 3 GW.
Net Billing
The Commission has also relaxed capacity restrictions for net billing.
While the draft proposed capping DSPV capacity under net billing at the sanctioned load, contracted demand, or 500 kW, whichever was lower, the final regulations remove the 500 kW ceiling. Projects can now be installed up to the consumer&#8217;s sanctioned load or contracted demand. The new regulations also opened net billing to all consumer categories.
Gross metering will also available to all consumer categories for projects from 1 kW up to the sanctioned load or contracted demand.
Eligible consumers under the net metering, gross metering, or net billing mechanisms may install a DSPV plant with a capacity of up to and including 10 kW of sanctioned load. A tolerance of up to 10% is permitted for the applied DC system capacity, provided the inverter’s AC capacity does not exceed the sanctioned load.
Group and Virtual Net Metering
All consumer categories are eligible for GNM, provided the participating service connections are in the same consumer&#8217;s name and belong to the same consumer category.  Such consumers must also be within the same area of supply of the DISCOM.
GNM projects must have a minimum capacity of 5 kW and cannot exceed the combined approved load or contracted demand of participating connections.
VNM is available to domestic consumers, residential apartments, group housing societies, charitable institutions and organizations, government and municipal bodies, government buildings, schools, and buildings belonging to local authorities. VNM projects can range from 5 kW to the consumer&#8217;s approved load.
VNM consumers must install smart meters at their cost at both the generation point and the consumer end.
The distribution licensee will purchase surplus electricity remaining under GNM and VNM at the end of a billing month at 75% of the applicable generic DSPV tariff.
Both arrangements are subject to applicable open access charges. However, consumers are exempt when the electricity is generated and consumed within the same distribution transformer or 11 kV feeder.
Behind-the-Meter
The regulations allow all consumer categories to install behind-the-meter systems without a minimum capacity requirement.
Consumers can install solar capacity above their approved load or contracted demand if suitable generation, storage, or inverter systems enable islanded operation.
Facade-integrated solar panels on the walls of the building, solar panels of mono-facial/ bi-facial or any new solar technology on the rooftop or on one elevated structure can be installed with an eight-foot ground clearance at the lowest point. The eight-foot ground clearance for solar projects on elevated structures does not apply to BTM projects installed for captive consumption.
KERC has retained the provision allowing it to impose grid support charges in future to recover costs associated with energy storage, grid balancing, and facilitating electricity injection into the grid.
Faster Project Approvals
The final regulations simplify procedures for smaller projects.
A separate power purchase agreement (PPA) is not required for low-tension consumers with projects up to and including 150 kW. Submission of an online application will be deemed approval to commence work. The distribution licensee must inspect and commission the project within five working days after receiving the report.
For projects delayed by more than six months, the applicable tariff will be the lowest of the tariff agreed in the application or PPA, the revised tariff prevailing at commissioning, or 90% of the originally agreed tariff.
The Commission clarified that power purchased by DISCOMs under gross metering, net metering, net billing, VNM and GNM will qualify toward compliance with their Renewable Purchase Obligation or Renewable Consumption Obligation.
Recently, KERC <a href="https://www.mercomindia.com/karnataka-cuts-generic-tariff-for-pm-surya-ghar-projects" target="_blank" rel="noopener">approved</a> a tariff of ₹1.96 (~$0.0205)/kWh for rooftop solar systems from 1 kW to 2 kW under the PM Surya Ghar program,; ₹2.14 (~$0.0224)/kWh for systems above 2 kW and up to 3 kW; and ₹2.58 (~$0.0269)/kWh for systems above 3 kW.

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