Simplifying Net Metering

New regulations released for Goa and union territories

The Joint Electricity Regulatory Commission (JERC) for the State of Goa and Union Territories has finalised the net metering regulations. The new regulations came into effect on 24 July, 2019. A draft for the same was released in May 2019. The regulations have been put in place for grid-connected rooftop, ground-mounted as well as floating solar power projects. In addition to the state of Goa, the regulations will apply to the union territories of the Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Puducherry.

These regulations will enable prosumers to generate solar power for self-consumption and feed the excess solar power into the grid under net metering. The group net metering framework will apply to all consumers while the virtual net metering framework will be applicable to all residential consumers, group housing societies, and the establishments of government and local authorities. The maximum solar power generation capacity to be installed cannot exceed the contracted demand or the sanctioned load. Solar projects with capacity in the range of 5 kW to 500 kW at a single location will be eligible for grid connectivity while those exceeding 500 kW will be considered by distribution companies for net metering. Distribution companies will have the discretion to decide whether the project will be connected to the grid. Eligible consumers may install solar projects under these regulations provided the projects are within the permissible rated capacity, located on the consumer’s premises, and interconnected to the distribution licensee’s network.

Solar metering

In order to promote solar power generation in its licensed area, a distribution company will undertake demand aggregation along with other related activities. It will arrange for testing and sealing of electricity meters for consumers. These electricity meters will be arranged by the consumer or power generator. The distribution company will allow the installation of solar projects in its designated area on a non-discriminatory and first come, first served basis for each distribution transformer separately and within the stipulated timeline. It will ensure that the connection of the solar project to the distribution network is in accordance with the specifications and standards in place. The consumer will be responsible for the operations and maintenance of the solar project up to the net meter. Beyond this point, the responsibility will lie with the distribution company operating the solar meter. The distribution licensee will facilitate the solar project development, provided the cumulative solar capacity allowed at a particular distribution transformer does not exceed 75 per cent of the capacity of the distribution transformer. The JERC has proposed that in case the payment by the distribution company is delayed beyond May 31 of the concerned year, a late payment surcharge at the rate of 1.25 per cent will be levied on the distribution company for each month of delayed payment.

All grid-connected solar power projects are slated to have electricity meters with features to record energy for injection into the grid, as provided under the regulations. In addition, all projects will have a communication port for exchanging real-time information with the distribution licensee and all meters will have an advanced metering infrastructure (AMI) facility. The accounting of electricity exported from the solar project and imported from the grid by the eligible consumer will become effective from the date of connectivity of the solar project with the distribution network.

The final regulations were released with a few additions to the draft. These included some specifications about third-party owned projects. If solar projects are third-party owned, consumers will have the option of leasing out their rooftops, land or waterbodies to solar developers. This would be done in order to set up a project under the net metering framework on the basis of a mutual commercial arrangement. The consumer would pay the developer a mutually decided tariff for the power generated. This commercial arrangement between the prosumer and developer will be recorded by the distribution company. The projects set up under these regulations will be exempted from open access restrictions and associated charges.

The solar power projects under these net metering regulations will be exempted from banking charges, whether they are self-owned or third-party owned. The solar power that will be generated for captive purposes could be used to meet the renewable purchase obligations (RPOs), although the generated solar power will not qualify for the issue of renewable energy certificates (RECs). The electricity consumed from a rooftop solar system under a net metering arrangement can be used to meet the solar RPO of the distribution company, if the consumer is not an obligated entity. Moreover, the unadjusted surplus units of solar energy purchased by the distribution company will qualify towards its solar RPO compliance.

Conclusion

In 2018, the JERC issued a set of regulations related to power generation, transmission and distribution. These set of regulations, including the ones for net metering, are in line with the government’s renewable energy addition targets. While an effective net metering system can help in realising a considerable solar power potential, there are several challenges associated with net metering in India. These bottlenecks pertain to the implementation of net metering and the inconsistencies in net metering policies across the states. The limit on system size poses another challenge, along with the long process for seeking approvals and securing meters. The introduction of net metering regulations for Goa and the union territories is expected to resolve the issues in net metering.

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