Provisions are contradictory and offer little incentive for domestic consumers to generate power
Delhi's power regulator has called for public feedback on a policy that will allow consumers to use solar panels to generate electricity at their homes and also sell excess power if any.
The draft proposal on net metering, posted on the Delhi Electricity Regulatory Commission's (DERC) website, is open for feedback till December 31.
Renewable energy analysts say the draft proposal is contradictory and could benefit private power distribution companies, leaving little incentive for domestic consumers.
The draft also proposes use of a net meter—a bi-directional energy meter that registers both import and export of electricity. The mechanism also facilitates consumers to minimize their electricity bill by generating their own power and sell extra power to the power distribution company.
Two ways to generate and sell solar power
A family can put up a solar system on the rooftop of its house either by investing on its own or by leasing out its rooftop to a third party that will install the solar system and collect monthly rental from the consumer.
In the second arrangement, a consumer will save the upfront investment cost and also the power it will otherwise consume from the grid. The third party will get the rental and can claim depreciation on the capital cost of the Photovoltaic (PV) systems with associated direct tax benefits.
Delhi has nearly 30 lakh households and anywhere between 250 and 300 sunny days in a year, and more than 700 square kilometres of built-up area for installing PV systems. On an average, a PV system installed on one square metre can produce nearly 5.31 kilowatt hours per day. “The prevailing scenario of declining trend in solar tariff and increasing retail tariff across most consumer categories like residential, commercial and industrial would encourage consumers to install rooftop solar systems,” states the DERC proposal.
Proposal has little incentive for customers
But some renewable energy analysts are skeptical. They have raised concerns that the proposal sides with the private distribution companies and does not offer many incentives to consumers to put up solar panels on their rooftops. Abhishek Pratap, senior energy campaigner with non-profit Greenpeace India, points to a clause in the proposal which seeks to limit the capacity of a rooftop solar PV system that a household can install to the sanctioned load of that household.
For example, if the sanctioned load of a household is five kilowatt, it can put up a solar system with a maximum capacity of five kilowatt even if the rooftop area permits for more capacity to be installed. “But since the efficiency of solar panels is around 15 per cent to 19 per cent, the output for a five kilowatt system would be just one kilowatt or two kilowatt.
As a result there would hardly be any surplus power and the consumer would have to buy a major part from private distribution companies,” says Pratap. This goes against the very idea of solar rooftop promotion, as the consumer would have virtually no incentive to install a solar power system, he adds.
The DERC proposal says if consumers install a solar system with a capacity higher than the sanctioned load, they would have to pay charges for installation of a new service line and related infrastructure because in sanctioned load limit the same service line which is used to get electricity can be used to feed in extra power. “It is a draft proposal. Comments are welcome. We will see how feasible they are,” said Prashant Kumar, Director (Tariff), DERC to Down To Earth.
Another point of contention is that the proposal seeks to provide the lowest applicable tariff in case of excess generation. Renewable energy analysts say the global practice is to give feed-in-tariff to the generator of renewable energy.
“If you give the lowest applicable tariff, who would install solar panels at their houses?” says Pratap. DERC’s order says it has been done to safeguard the interest of power distribution companies.
The proposal also says the cumulative capacity of solar rooftops should not exceed 15 per cent of the capacity of a distribution transformer. The DERC says rooftop solar systems can proliferate very fast, and as a result can have an impact on the local grid. Analysts say this is not a convincing reason because if solar rooftops proliferate, the capacity of transformers can be upgraded. Instead of capping the capacity of solar rooftops the governments should invest in upgrading infrastructure. Kumar says, “15 per cent limit is given considering the current capacity of the distribution transformers. If the load of rooftop solar power increases in an area, the limit can be revised and capacity of the transformers can be upgraded.”
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