Madhya Pradesh has emerged as a key renewable energy state in the country, especially for distributed renewable energy projects. According to the Madhya Pradesh Renewable Energy Policy 2022, solar energy is leading amongst all renewables sources in terms of potential, followed by wind, and then bioenergy and small hydro. The state has a solar energy potential of 61 GW and a wind energy potential of 11 GW. In line with this, the state government has set ambitious investment targets for the renewables sector. It plans to invest Rs 500 billion in renewable energy production by 2027. Further, the state aims to produce 30 per cent of its electricity from renewable sources by the end of financial year 2027, and 50 per cent by 2030. Madhya Pradesh has emerged as one of the top locations in the country for installing solar power plants, as it receives high levels of solar radiation and has enabling policy initiatives. The state government is determined to provide power at affordable rates, and has been successful in achieving significantly low tariffs in its tenders.
The agricultural sector receives 41 per cent of the total energy produced in the state. To support the sector and reduce the burden on state discoms, the state has actively adopted and promoted the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme in order to increase the demand for solar power in the sector. To this end, it provides a 20 per cent discount to its customers for the consumption of solar power during solar hours. But the agricultural sector is season dependent in Madhya Pradesh. The demand for solar power is not consistent. To resolve this issue, the state is negotiating an arrangement with Uttar Pradesh, an adjoining state, to set up a 2,000 MW solar plant. The project will help both states procure power. From October to March, power will be procured by Madhya Pradesh, while Uttar Pradesh will procure power from April to September. According to the Ministry of New and Renewable Energy, the state has a total installed capacity of 99.04 MW under the KUSUM scheme, as of May 2024.
It has also been making efforts to increase the share of rooftop solar in the residential space, with a total installed capacity of 364.24 MW under the PM-Surya Ghar Yojana as of May 2024.
Policy updates
Madhya Pradesh has been making strides in promoting distributed renewable energy. In March 2024, the Madhya Pradesh Electricity Regulatory Commission (MPERC) introduced updated regulations for grid-interactive renewable energy systems. These regulations, officially designated as the “Madhya Pradesh Electricity Regulatory Commission (Grid Interactive Renewable Energy Systems and Related Matters) Regulations, 2023, aim to facilitate the seamless incorporation of renewable energy sources into the state’s power grid. The regulations outline various provisions and guidelines for the installation and operation of grid-connected renewable energy-generating systems across Madhya Pradesh. They cover net metering, group net metering, gross metering and virtual net metering. Under these regulations, net metering, group net metering, gross metering and virtual net metering will be allowed by distribution licensees on a non-discriminatory and first come, first served basis.
Eligible consumers across all categories can install renewable energy-generating systems within the specified capacity limits of 500 kW to 1 MW, depending on the type of arrangement. Prosumers, or renewable energy service companies (RESCOs), must adhere to interconnection standards, as well as operation, maintenance and metering requirements. Consumers with outstanding arrears to the distribution licensee are not eligible for these arrangements. Furthermore, consumers using net metering or gross metering will be ineligible for open access under MPERC regulations. Wheeling charges and other surcharges will apply to group net metering and virtual net metering connections, with specific levies on beneficiary consumers. These measures are expected to encourage more consumers to adopt renewable energy solutions, supporting the state’s sustainable energy goals.
Future outlook
Madhya Pradesh is well positioned to become a leader in the distributed solar segment by leveraging its abundant solar resources and fostering a supportive policy environment. The government has issued provisions to streamline the processes and procedures related to the installation and interconnection of distributed solar systems. This includes simplifying net metering regulations and virtual net metering provisions. This will make it easier for consumers to integrate their solar systems with the grid and benefit from the surplus energy generated.
The state should keep exploring innovative financing mechanisms and business models to make distributed solar more accessible and affordable. Greater efforts are required to promote the adoption of the RESCO model as well as solar power in the agricultural sector. Overall, Madhya Pradesh’s future outlook for distributed solar power looks promising.
Based on a presentation by Manu Srivastava, Additional Chief Secretary, Power and Renewable Energy Department, Madhya Pradesh, at Renewable Watch’s 17th Solar Power in India conference
