New MERC rule may shock solar power consumers
The Maharashtra Electricity Regulatory Commission (MERC) has come up with a new policy, under which the concessions have been reduced for consumers who install small generating units to produce power from renewable sources such as sun and wind. The draft, which has been put up for public consultation till November 18, has invited flak from citizens. After studying the suggestions and making relevant changes, the MERC will publish the final policy.
Through the new policy, the MERC seeks to replace the existing net-metering regulations with new rules. A net-metering system allows the surplus power generated by renewable sources to be exported back to the grid and the deficiency to be imported through the grid. At the end of a billing cycle, the consumer is charged only for the ‘net usage (mainly the consumption through the grid, after the solar power is completely used)’. The MERC, however, intends to convert the Net Metering Regulations 2015 policy to net-billing, by restricting the concession to only 300 units in a billing period. Under the new policy, for example if 1,000 units are generated from the rooftop solar plant and 800 units are consumed, the residential consumer will still have to pay for 500 units (at the tariff rate applicable), as the offset is only for 300 units.
The plan is to implement the new policy for new installations, while the existing users will not be affected. Maharashtra currently has the largest rooftop solar installations in India, with 266 megawatt power (MWp) capacity. As per the National Solar Mission, the present rooftop capacity installed in Maharashtra is 266 megawatt power (MWp) and the 2022 target is 4,000 MWp, which means the state has reached up to 6.65% of its target in four years. “The policy is currently only in its draft stages. The MERC committee will hear all suggestions and objections from solar distributors and consumer representative groups. We urge them to come forward and convey reservations (if any) to this policy,” said Prashant Badgeri, deputy secretary (Renewable Energy), Maharashtra government. “This policy has been decided on the basis of recommendations made by a committee of all the State Electricity Regulatory Commissions (SERC) and not MERC alone. So this policy is being looked at across India and not just Maharashtra. Gujarat and Madhya Pradesh have already begun work on this. Clarifications have been issued for each change proposed.”
Sanjeev Kumar, chairman and managing director, Maharashtra State Electricity Distribution Company Ltd. said, “We will be submitting our comments to MERC. This is a policy matter and still in its nascent stages. It should be discussed once it is finalised.” “Currently, high-end consumers are opting for rooftop solar with net-metering to reduce their electricity bill, but this has reduced the ability of electricity suppliers to subsidise comparatively cheaper consumers, and also increased infrastructure costs for distributors,” said an official from MERC.
Consumers, however, are not impressed. A south Mumbai-based college that runs completely using solar (paying only basic meter cost) said they had so far saved ₹17 lakh over two years after their installation worth ₹52 lakh and saved 66 tonnes of carbon emissions. “Owing to this change in net metering policy for new consumers, the recovery period for the expenses will be longer,” said Dr Siraj Chougle, principal, Maharashtra College of Arts, Science and Commerce in Nagpada.
“The draft regulations allow power supplying companies to bill consumers for the power produced by them at a higher rate. This is against the spirit of the Indian Electricity Act 2003 and is unconstitutional,” said Vipul Joisher, director, Aditya Green Energy Private Ltd., which filed its objections last week.
“With the net billing, the units of consumption will be done away with. This will discourage the implementation of rooftop solar beyond 3 kilowatt. As consumers pay high cost for solar installation, the new policy will reduce the benefit by more than 50% and the break-even period could extend up to more than double the current duration which is three or four years,” said Animesh Manek, founder, Avishakti Rooftop Solar Ltd.
Muhammad Sohail Shaikh, from MSS Renewtech, said, “New regulations will sound a death knell for the solar industry, with over 2,000 small and medium industries running into losses and shutting shops with lakhs of jobs at stake.”
“There is no specific reason for this proposal. It is the duty of the committee to frame regulations,” said Abhijit Deshpande, secretary, MERC. “I cannot comment on implications of the policy, but all comments will be put up before the committee before getting finalised.”