DISCOMs – In the net of metering

Industry leaders discuss the challenges being faced while implying net metering in the urban areas.

Net metering is a simple mechanism that credits the solar energy system. If a residential customer has a PV system on their roof, it may generate more electricity than the home uses during daylight hours. Process of net metering has to be made much simple. When applying for net meter, only the difference of cost between conventional meter and net meter has to be charged from existing consumer. Peddiraju Bhupathiraju, Akshaya Solar, on this note says, “MNRE has to work out a policy for incentivising DISCOMs to encourage more rooftop installations and benefit more stake holders rather than attempting to kill the small players in the field.”

Import/export meters have been installed at all meter exchange points of interstate power system for a long time. Subhash R Sethi, Power Sector Specialist finds net metering as an established practice. He says, “The consumer having roof top solar pays for the net energy consumed in the premises.”
Neha Mourya, Senior Business Analyst, Bharat Solar Trades and Suppliers believes effective net-metering implementation can increase rooftop solar adoption by as much as 50 per cent. “Slow progress on net metering policy front can be attributed largely to an inadequate policy framework, passive opposition from DISCOMs, and lack of appropriate training and process protocols at the local utility level.”

There are some challenges in adopting it, says Manu Karan, Vice-President, CleanMax Solar. Firstly, in most states an arbitrary cap usually of 1 MW on the size of rooftop solar projects to avail net-metering benefits. Secondly, Excluding HT (high tension) consumers; like commercial & industrial consumers from availing net metering. Thirdly, not allowing RESCO projects to avail net metering. Expecting customers to make large investment into solar adoption will slow the growth of rooftop solar. The government should look at introducing policies that are standardised and long term. This will reduce the scepticism and propel adoption.

Vishal Toro, Project Head, Government Projects, Fourth Partner agrees that net metering is viewed as a challenge. In urban areas, there are possibilities that the consumer may also export surplus amount of energy to the grid. By giving surplus power to the grid, the consumer expects some complementary advantages for exporting their generated power to the grid.

But given the procedure for the procurement of net metering, it requires a significant amount of time, which is usually considered as a drawback for availing the advantages over the net metering. Moreover, in the urban areas, most of the entities are commercial.

Imaan Jawan, Suntuity, REI views it as a challenge because of the space constrains within urban areas. Pointing out some, Javan says, “That’s primary reasons can be the overloaded transformers, because any excess energy cannot be returned to the grid. Another deterrent fact is the installed systems. These systems are usually smaller in size following the obstruction or shading those results into low efficiency.

According to Mantha Balasubramaniam, Founder UKM Spower Solutions Pvt. Ltd, the advent of net metering has opened gates for adoption of solar as the solution provides for export of unutilised power and adjustment of exported units in the subsequent billing cycle through banking. However, he says, “The subsidy also seems to be one of the major bottlenecks now a days for increased usage of solar as the prospects look more for subsidy and not for strength of the solar solution.”

Net metering – A threat for DISCOMS business?
Net metering has always been seen as a threat by DISCOMs and has been a drag on the rooftop sector. Many states are hesitant to provide a robust environment for rooftop solar, as DISCOMS are afraid to lose premium customers who pay a high grid tariff. Balasubramaniam, highlights “It started with curtailment of OPEN ACCESS usages by DISCOMS and now spreading to net metering requirements too, disturbing trend started with UP, by shutting down net-metering for C&I customers and confining it to residential/other segments.

DISCOMS never favoured net-metering for C&I customers. They see a reduction in revenue from a segment that has been their traditional cash cow. “In my view, providing solar panel on roof top reduces the distribution losses during the day time when solar power is available”, says Sethi. However, the distribution companies can better manage the power purchase cost commensurating with solar installation in their licensed area. DISCOMs are permitted a return of 15.5 per cent to 16 per cent on equity as per the approved tariff. Generation of energy at the load centre would reduce the system losses and is beneficial to the consumer as well as the DISCOMs”, Sethi adds.

Talking about DISCOMS that view net metering a threat, Karan says, “With many DISCOMs, failing to meet their RPO obligations and instead buying RECs at a high cost to taxpayers, they should be working to promote rooftop solar by providing consumers more options.” Moreover, net metering is used merely to balance the variability of power generation and consumption, which does not cost the DISCOM anything. “In fact, the financial impact to DISCOM is identical to improving energy efficiency, which is aim of government of India’s power ministry.” Karan added.

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Space constrains are the primary reason. One need to know that an overloaded transformer can’t return excess energy to the grid, whereas solar can do that.
Imaan Jawan, Suntuity, REI

Expecting customers to make large investment into solar adoption will slow the growth of rooftop solar.
Manu Karan, Vice-President, CleanMax Solar

Given the central government’s push to achieve 100 GW by 2022, it comes as an obligation for the discoms to support the renewable energy projects.
Vishal Toro, Project Lead – Government Projects, Fourth Partner Energy

MNRE has to work out a policy for incentivizing DISCOM to encourage more Rooftop installations, and benefit more stake holders.
Peddiraju Bhupathiraju, Managing Director, Akshaya Solar

DISCOMS never favoured net-metering for C&I customers. They see a reduction in revenue from a segment that has been their traditional cash cow.
Mantha Balasubramaniam, Founder UKM Spower Solutions Pvt. Ltd

“The distribution companies can better manage the power purchase cost commensurating with solar installation in their licensed area.”
Subhash R Sethi, Power Sector Specialist