Gujarat Allows Net Metering for Rooftop Solar Systems of 1 kW to 1 MW

Gujarat Electricity Regulatory Commission (GERC) has amended Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations, 2016.

The new regulation— Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) (Third Amendment) Regulations, 2022— states that net metering will be allowed for rooftop solar systems having a capacity of 1 kW and up to 1 MW. Gross metering for rooftop solar systems with 10 kW and up to 1 MW capacity will be permitted.

According to the new regulation, rooftop solar projects set up by residential consumers will be allowed irrespective of the sanctioned load. Consumers can avail of incentives as per the program. There will be no capacity restrictions up to the sanctioned load demand for captive consumers and projects set up under third-party sale within the permissible limit.

In case the rooftop project set up under the gross metering mechanism by residential or government consumers is located on their premises, then the ownership or legal possession of the premises will be purchased by the DISCOM under the Policy for Development of Small Scale Distributed Solar Projects, 2019.

For projects set up under the renewable energy certificate (REC) mechanism for captive use or third-party sale, installation of solar projects will be allowed up to sanctioned load. The solar project capacity set up to fulfill renewable purchase obligation (RPO) requirements will be permitted regardless of their sanctioned load.

Residential and government projects

Rooftop solar projects set up by residential consumers on their rooftop will be allowed irrespective of the sanctioned load. Solar projects can also be set up by a developer on the rooftop of a residential consumer for the generation and sale of power to another consumer on the same premises under third-party sale. The developer and consumer must enter a lease or power sale agreement in this case.

In the case of self-owned systems and SURYA Gujarat project consumers, DISCOMs must purchase the power at ₹2.25 (~$0.029)/kWh for the first five years from the commissioning of the project. After that, they should purchase it at 75% of the simple average of the tariff discovered and contracted under the competitive bidding process conducted by GUVNL for non-park-based solar projects in the preceding six months from the project’s commercial operation

For projects set up for third-party sale, DISCOMs must purchase the power at 75% of the simple average tariff discovered and contracted under the competitive bidding process conducted by GUVNL for non-park-based solar projects in the preceding six months from the commercial operation of the project. The same must remain fixed for the entire term of the agreement. Such rates will be declared by GUVNL on a six-monthly basis and will be applicable under the agreement to be executed by DISCOM with the consumer.

No banking charges will be applicable on solar power consumed by residential consumers.

Captive projects

No capacity restrictions will be applicable under this category. The captive consumer must utilize the energy generated from such a project. The ownership of the captive solar generating project and energy consumption on an annual basis from it must be proved by submitting documents annually.

In the case of solar projects set up by HT or EHV consumers for captive use, the energy set-off will be allowed between 7.00 and 18.00 hours of the same day. The respective DISCOM should purchase the surplus energy after the specified period.

In the case of solar projects set up by LT demand-based consumers for captive use, the energy set-off will be allowed between 7.00 and 18.00 hours. The surplus energy not consumed during the period by the consumer after set-off should be compensated by respective DISCOMs by following surplus injection compensation (SIC) rates.

The surplus injection compensation rates for projects set up by micro, small, and medium (MSM) manufacturing enterprises will be ₹2.25 (~$0.029)/kWh for the first five years from the commissioning of the project. Later, they should purchase it at 75% of the simple average tariff discovered by GUVNL for non-park-based solar projects in the preceding six months from the project’s commercial operation. The tariff will remain for the entire term of the agreement.

For projects set by non-MSMEs, the surplus injection compensation rates will be 75% of the simple average tariff discovered and contracted under the competitive bidding process conducted by GUVNL for non-park-based solar projects in the preceding six months from the commercial operation of the project. The same will remain for the entire term of the agreement.

Banking charges of ₹1.50 (~$0.019)/kWh will apply to solar energy consumed in the case of demand-based consumers. In the case of MSME manufacturing units and other than demand-based consumers, banking charges of ₹1.10 (~$0.014)/kWh will be applicable. Banking charges will not apply to government buildings.

Projects under third-party sale

The sale of electricity by the owner of solar power projects to other consumers will be considered a third-party sale. Developers can also install projects on consumers’ rooftops to generate and sell power by entering into a lease or power sale agreement.

In the case of solar rooftop projects set up by HT/EHV consumers and LT demand-based consumers, the energy set-off will be allowed between 7:00 and 18:00 hours of the same day. DISCOMs should purchase surplus energy after the specified period.

DISCOMs should compensate the surplus energy not consumed by the consumer during the set-off period at 75% of the simple average of the tariff discovered by GUVNL for non-park-based solar projects in the preceding six months from the commercial operation of the project. The same will remain flat for the entire term of the agreement.

Banking charges of ₹1.50 (~$0.019)/kWh will apply to solar energy consumed in the case of demand-based consumers. In the case of MSME units and other than LT demand-based consumers, a banking charge of ₹1.10 (~$0.014)/kWh will be applicable. Banking charges will not apply to government buildings

Projects under the REC mechanism

Rooftop solar projects under the REC mechanism can be set up per the administrative procedure regarding registration and accreditation, as decided by the Central Electricity Regulatory Commission (CERC)

The energy accounting for the projects set up under the REC mechanism should be carried out on a 15-minute time block basis.

In the case of projects set up for captive or third-party sale under the REC mechanism, surplus energy after being set off on a 15-minute time block basis should be compensated by DISCOMs at 65% of the simple average of the tariff discovered by GUVNL for non-park based solar projects in the preceding six months from the commercial operation of the project. The tariff will remain for the entire term of the agreement.

For DISCOMs agreeing to purchase the electricity under the REC mechanism, a tariff of 65% of the simple average tariff for solar projects based outside the solar parks in the preceding six months from the signing of the PPA will apply. The tariff will remain for the entire term of the agreement.

No banking charges will be applicable. In case of projects set up for third-party sale, cross subsidy surcharge and additional surcharge will be applied like regular open access consumers as determined by the Commission. Transmission and wheeling charges and losses will be levied depending on the project’s location and the point of consumption.

Projects set up for RPO compliance

Consumers will be allowed to set up projects to fulfill their RPO requirements regardless of their contracted demand. For such projects, energy accounting must be done on a 15-minute time block basis.

The surplus solar energy purchased by DISCOM from captive or third-party solar projects will be considered to fulfill DISCOM’s RPO. The DISCOM will compensate the surplus energy injected into the grid at 75% of the simple average of the tariff discovered and contracted through a competitive bidding process conducted by GUVNL for non-park-based solar projects and will remain valid for the entire term of the agreement. No banking charges will be applicable.

Wheeling & transmission of electricity

When wheeling or transmission of power for captive consumption is allowed with open access permission, transmission charges and losses, wheeling charges, and unit losses that apply to regular open access consumers will be applied.

Cross subsidy surcharge and additional surcharge

Cross subsidy surcharge and additional surcharge will not be applicable in the case of captive projects. In case of projects set up for third-party sale, cross subsidy surcharge and additional surcharge will be the same as the charges applicable for regular open access consumers.

In February, GERC reiterated that DISCOMs procuring surplus energy from rooftop solar projects must consider the average power purchase cost of ₹4 (~$0.053)/kWh for the state for the financial year 2020-21 as the ceiling.

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Arjun Joshi is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. More articles from Arjun Joshi.