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Rooftop solar generation hits a discom snag

Distribution companies see such renewable energy cuts into sources as competition

Solar power
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Solar power

Jyoti Mukul New Delhi
Generating power on rooftop solar panels may have caught on with those who enjoy the luxury of space, but despite the push from both the Union and state governments, rooftop generation by those who connect to the grid through net meters faces myriad challenges.
 
About 23 per cent of India’s targeted 175 GW of renewable energy by 2022 is to come from rooftop solar power. The Union government is offering a 30 per cent subsidy to residential and institutional consumers for rooftop generation. State-wise targets have also been set while the Solar Energy Corporation of India (SECI) has tendered out states to companies for rooftop generation in Union government and institutional buildings. The tariffs in these tenders are at attractive levels — Rs  3.6 a unit (kilowatt/hour) for Uttar Pradesh and Rs 3.62 in Maharashtra.
 
Net metering, however, as a concept is neither easy to understand nor to implement, more so when the permission to install such a meter has to be taken from the very entity whose business is threatened because of it. When solar power is generated in-house, the electricity is not just used for captive consumption, but is also squared off with what is being bought from the grid through the distribution companies or discoms. These discoms are also the ones that give permission to install net meters.
 
No surprise, then, that installing these net meters alone becomes a challenge.  “There net metering in many cases takes nine or 12 months for approvals and clearance. Also, discoms come up with ad-hoc demands which often create operational nightmares, leading to further delay in projects and services,” says Kuldeep Jain, founder and managing director, Cleanmax Solar. The Warburg-backed Cleanmax Solar is India’s largest on-site solar power provider with 24 per cent market share and more than 200 projects that have a combined on-site capacity in excess of 85 MW.
 
Jain also points to the “artificial capacity restrictions” of half a Megawatt or up to 1 MW power that states impose on net meters. “This restriction does not allow large consumers like universities and defence establishments to use up their available roof space,” he explains.
 
Manu Srivastava, principal secretary, renewable energy, with the Madhya Pradesh government, says sanctioned load for the connection should not act as a limit to the capacity of rooftop renewable energy system. Consumers should be allowed to generate according to their choice and ability since whatever they feed into the grid can be limited by the transformer capacity belonging to the discom.
 
So, in its recommendation to the Union government, the state has suggested that consumers should be allowed to interconnect a rooftop solar PV [photovoltaic] cell of a capacity higher than their contracted load in their premises, provided the system is ancillary to the purpose of the premise. Srivastava says his state does not impose any such restriction.
 
The Madhya Pradesh government has also asked the Centre to recognise that “access and connectivity should be a matter of right to consumers for net metered system, provided associated charges and fees are paid”. The only constraint should be on account of the distribution transformer.
 
Sundeep Gupta, vice-chairman and managing director, Jakson group, however, says that most rooftop solar are not more than 250 kW and, in any case, the load which is fed back to the system is very small and within the prescribed limits.
 
Privately-controlled Tata Power Delhi Distribution, however, cites an example of a school which feeds in power to their system during summer vacations and weekends. The company has 5 MW generated under the net metering, which in value terms meant Rs 3.33 crore of electricity during 2016-17. The company did not divulge the school’s name for commercial reasons. In all, it will have 13 MW installed rooftop capacity in its area, which translates to Rs 13.31 crore of generation this year.

Praveer Sinha, chief executive officer and managing director, Tata Power-DDL, says, “We need to understand the business of discoms depends on a “pass through” mechanism where costs are built into tariffs. Most discoms in our country today are in power-deficit states and will need to buy less power as more power gets generated on rooftops. Further, being a distributed source of generation (that is, produced in a number of places) solar will help in the reduction of AT&C losses, which is the single most important concern in India today.”
 
In view of this, Sinha suggests that discoms should plan to enter long-term power purchase agreements (PPAs) with generators only after considering the possibilities of rooftop solar generation in its area. The government should also facilitate the modification of existing PPAs to ensure that discoms can focus on promoting net metering in its own area.
 
According to Gupta, it is natural that the state government-owned discoms are reluctant and slow in giving approvals since net metering is a threat to their business. Srivastava, however, says the entire process from the time the consumer applies for a net metering connection till the time the system is commissioned should be undertaken in a time-bound manner with regular updates on capacities of distribution tranformers on the website.
 
Jain says a robust net metering policy will encourage faster adoption among corporations and institutions as they see value in their sustainability objectives and also reduction in their operational cost by being more energy efficient. At the same time, however,  there is the case of Germany where wind and solar output has priority in grid access under law. This power floods the market on sunny and breezy days, curbing running hours for nuclear, coal and gas plants. Renewable power generation, in fact, is blamed for bringing down the profit margins for utilities in Germany.
 
For state-run power utilities in India’s 26 states and the Union Territory of Puducherry, whose losses stood at Rs 40,295 crore at the end of March 2017, net metering is another way that renewable energy is impacting them adversely. And, for domestic consumers who do not have large premises, it may lead to a reduction in cross-subsidy and an increase in tariffs, that too because of subsidised rooftop generation from those who own large premises.