The Uttarakhand Electricity Regulatory Commission (UERC) has rejected a petition seeking permission to install an additional 600 kW rooftop solar system under the net metering arrangement as the proposed expansion would have raised the total capacity to 1.6 MW, surpassing the 1  MW cap set by the Renewable Energy Regulations, 2023.

The Commission held that relaxing the ceiling for net metering was neither justified nor prudent. It ruled that two types of net metering arrangements under the same electricity connection number could not be permitted.

Background

Opto Electronics Factory installed a total rooftop solar capacity of 1 MW. This included a 400 kW capacity installed under the capital expenditure model by Kalindi Power and Steel, and a 600 kW capacity installed under the renewable energy service company model by Rooftop Urja RESCO SPV1. Both installations were approved by the Uttarakhand Renewable Energy Development Agency (UREDA).

On July 3, 2024, the Ministry of New and Renewable Energy (MNRE) issued operational guidelines for the PM Surya Ghar: Muft Bijli Yojana, aiming to cover all government building rooftops with solar power by December 31, 2025. In compliance with this directive, the petitioner planned to install an additional 600 kW capacity to increase the total rooftop solar installation capacity to 1.6 MW.

Since the UERC’s RE Regulations, 2023, place a ceiling of 1 MW on grid-interactive rooftop solar systems under net metering, the petitioner sought an exemption.

The petitioner argued that the 1 MW ceiling was arbitrary, considering its sanctioned load and the MNRE guidelines. It maintained that the additional capacity would not inject more than 1 MW into the Uttarakhand Power Corporation (UPCL) grid at any given time because of the factory’s high internal consumption.

The petitioner also cited that in its lowest recorded demand month, November 2023, the factory’s demand was 2,664 kVA, and its minimum monthly consumption never fell below 653,400 kVAh. Thus, it contended that excess injection of solar power into the grid was unlikely.

The petitioner submitted that the Solar Policy of Uttarakhand, 2023, allows commercial and industrial consumers to install rooftop solar projects up to their sanctioned load, without specifying a cap of 1 MW. It also pointed to an earlier case where UERC allowed the Military Engineer Services (MES) to install 2 MW rooftop solar projects each at Roorkee and Dehradun under net metering.

UREDA supported the petitioner’s application, arguing that solar installations could be technically supported up to the sanctioned load of the consumer and reminded the Commission of the earlier MES case where relaxation had been granted.

UPCL opposed the petition, arguing that relaxing the 1 MW limit would set a precedent and could negatively impact the financial sustainability of the distribution licensee. It warned that increased net metering capacity would reduce billed revenue and increase the burden on other consumers.

Commission’s Analysis

UERC noted that the RE Regulations, 2023, explicitly state that grid-interactive rooftop solar systems can be installed up to 100% of the consumer’s sanctioned load, subject to a maximum limit of 1 MW under net metering. It acknowledged that the petitioner’s sanctioned load was 4,500 kVA but emphasized that the 1 MW ceiling applied regardless of the sanctioned load, except in the case of domestic consumers.

The Commission also reviewed the MNRE guidelines issued on July 3, 2024. It found that while these guidelines aim to install solar systems on government rooftops, they do not specifically mandate the use of net metering. Installations can also use gross metering, net billing, or any other arrangement approved by the relevant state electricity regulatory commission.

The Commission concluded that the guidelines did not compel rooftop saturation through net metering, thereby weakening the petitioner’s argument for regulatory relaxation.

On the point raised regarding the MES case, the regulator clarified that those approvals were granted under a “No Objection Certificate” model. In that model, any excess power injected into the grid was deemed to be free of cost. The petitioner in the current case, however, sought a commercial net metering arrangement, where surplus power would be compensated at the generic tariff. Thus, the MES precedent did not apply to the current petition.

The Commission addressed the petitioner’s reference to the Uttarakhand Solar Policy, 2023. It clarified that while the policy aims to promote solar deployment, it only applies to state government departments and institutions. Since the petitioner is under a central government ministry, those specific provisions do not apply. The Commission also stated that while policy documents are important, they do not override statutory regulations. Regulations are binding, whereas policies act as guiding principles.

UERC also rejected the argument that the petitioner’s high internal demand justified a higher net metering capacity. It emphasized that regulations are designed to be uniformly applicable and that commercial viability or operational convenience cannot be grounds for relaxation unless a legal or technical difficulty is proven.

The Commission observed that allowing two different net metering models under the same electricity connection would be inconsistent with the regulatory framework and could create administrative and billing complications.

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