Special Report

The Future of Net-Metering

Experts believe net-metering is crucial for India if it is to achieve the goal of energy security by 2022. Here’s a details analysis on the scope of net-metering in India.

Net-metering is a concept that allows the user to produce electricity from the renewable resources and to get connected to the grid at the same time. Net-metering is a special billing and metering system wherein the consumer has to pay for the electricity used and if their renewable energy generating systems is making more electricity than they consume they may be credited for the excess electricity contributed to the grid. The concept of net-metering was introduced to ensure that the consumers have reliable source of energy. In spite of having so many advantages it is not widely accepted, hence doubting its future and further scope. To provide an insight this article will describe about what will be the future of net-metering.

Net- metering is crucial for India if it is to achieve the goal of energy security by 2022. In the coming future, solar rooftops will be an advisory by the government. Many state governments are also providing subsidy on solar solutions which is a moral boost for a consumer relying on net-metering to save money on their electricity bills. Net- metering can help India achieve energy security through generation at point of consumption (distributed generation). Besides helping consumers to reduce their burgeoning electricity bills, it can play an instrumental role in stabilising national, regional and state grids. It can also help discoms tide over their financial losses through consumer default risk mitigation. It also has the potential to minimise AT and C losses and reduce per capita energy footprint. “So, net-metering system has a huge horizon in the upcoming era of renewable energy. However, customers are still reluctant to adopt net-metering policy. So reforms are needed at the earliest. Firstly, the customers need to be provided adequate financial incentives to encourage the practice of net -metering. Unfortunately, feed-in tariff (energy supplied by the consumer to the grid (selling) at higher tariff rate than the one at which electricity is bought from the grid) is not possible in India due to poor financial condition of discoms,” says Kunwer Sachdev, Founder and Managing Director, Su-Kam.

He adds, “Another reform required is availability of anti-islanding protection. When the grid shuts off, the solar photovoltaic (PV) inverter also turns off completely, preventing the owner from using the generated energy for themselves. This leads to wastage of energy. The solution here lies in technical innovation of inverters. Manufacturers need to make inverters capable of cutting off the connection to the grid in case of grid failure, while still being able to operate (acquire reference voltage) and provide solar energy for use.”

Net-metering policy is a key to potentially drive widespread implementation of distributed solar PV power in residential, industrial and commercial sector, believes Shailesh Patni, Head-Sales and Marketing, Jyotitech Solar LLP. He adds, “Net-metering has a great future as the end-users are benefitted in terms of reduced per KWp cost of solar rooftop means better return on investment (ROI), grant of government subsidy and tax benefits, reduction in energy bills means reduction in carbon footprint. Theoretically, net-metering shall help India to achieve greater energy security for millions of peoples through distributed generation at the point of consumption.”

Inverters with anti-islanding protection and other technological innovations providing safety features has allowed for grid-tied/hybrid solar implementation with net-metering.

He adds, “A lot of aware is being spread about net-metering advantages and solar PV power generation through different programs as per Ministry of New and Renewable Energy (MNRE), state nodal agencies guidelines by private players via exhibitions, seminars, one-to-one interactions, publications and media advertisements.”

The net-metering is going to be biggest driver for growth and adoption of solar rooftop in the country. Many states have framed net-metering policies for promotion of the rooftop segment as it still has to see the growth witnessed by the ground mounted solar power plants. Net-metering provides the benefit of captive power plant with grid backup at affordable rate to the consumer, which led to increase in solar rooftop attractiveness and wider adoption. “Solar rooftop also helps in reducing the transmission and distribution loss as the power is consumed where it is generated. With the fall in solar power tariff the benefit incur on the difference in price of energy from solar rooftop and grid has increase as the rooftop energy prices have slipped below the grid energy price, benefiting the consumer in a big ways. But this has also lead to protest against the rooftop installation, as power distribution companies are concerned about the loss of revenue due to this power generation units from solar rooftop. A balance have to be created between the loss of revenue by discoms and consumer interest as this will only make way for net-metering and profitable operation of discoms,” says Dr. Manish Karna, AVP – Business Development, Solar, ACME.

B.S. Yadav, Managing Director, Ultimate Sun Systems believes that not all discoms have understood the potential of solar and even consider roof top solar (RTS) systems as potential threat. He says, “We have come a long way in last few years with MNRE and almost all the states coming out with solar and net-metering policies. However, all the discoms have still not fully understood the potential of solar and are yet to fully embrace the future of energy generation. Some of them are looking at RTS system producers as a potential threat. The threat is that it would take away their customers and this would further add to their revenue loss. This leads to a cascading effect in terms of approval of bi-directional meters, delay in terms of approval, testing, installations of net-meter and software upgradation in issuing of bills and delay in following of the time schedule as specified by the metering regulations.”

As per net-metering regulation, soon after the receipt of application of bi-directional energy, the site feasibility and granting the approval on installation of bi-directional meter should be done at the earliest but this time schedule is never followed. “We have personally seen a delay to the tune of 2 to 3 months after the installations. This causes heavy loss of energy if the RTS is of high capacity,” he complains.

As per Yadav, in the future, to address these problems, net-metering policy should be outlined basis the following points;

  • The discoms should accept and consider RTS producer as their partner and increase their role and stake in RTS business.
  • The discoms by partnering with RTS can use roof top solar as a tool for demand side management.
  • Discom working with RTS producer hand-in-hand will result in reduction in ATandC loss as the power is not required to travel and the consumption is at the source of generation.
  • RTS producer will even enable discoms to meets its RPO obligation.
  • RTS systems improves tail end grid voltage and helps in the reduction in systems congestion.
  • RTS reduces the pressure on grid and avoid network augmentation cost.
  • MNRE and Ministry of Power need to intervene and make discom accountable for these delays.
  • Enactment of Indian Renewable Law which would identify and penalise the delay and default on part of discoms.
  • Merging of renewable energy department with power department will create a strong and cohesive structure.
  • Revive the subsidies for commercial and industrial sectors in order to accelerate deployment of RTS in this sector. Government subsidies would help most of the consumers in this segment to get financial closures for their solar projects.

“Today most of the states are having their own solar policy which has specific directions to the supply of net-meter. The state where we belong has lot of restrictions towards the net-metering,” comments Raveendiran, Managing Director, Viridis Engineering India Pvt Ltd.

Solar energy has huge potential to over ride the conventional energy sources. The distributed power generation through solar power will improve the healthiness in the existing grid supply as well.

Raveendiran observes, “Since the implementation of the net-meter has gone through local discom procedures, in states which have surplus grid power, it is difficult to get the net-meter within the stipulated time. Till the time of installing the net-meter, the end customer will not enjoy the benefits of solar power as return which gives set back to the industry itself.”

The decentralised power generating system has an advantage to be free from transmission and distribution losses as well. Comparatively, most of the state discom’s are focusing on utility scale project to achieve their targets.

While speaking on the future of net-metering Raveendiran says, “The future of the net-metering completely depends upon the policies of state and central governments whereas they can maintain the strict policies to support the growth of the decentralised solar power generating systems.”

The solar roof top scenario has changed with the advent of net- metering. Before net-metering the use of bulky batteries, which have a short life, had been a hurdle particularly in RTS systems. The need of the batteries is dispensed with, in net-metering

Dhirendra Kannao, Chairman, NSOLAR Pvt. Ltd says, “Basically in net- metering, the power generated through solar roof top system is consumed during day time on priority over the grid supply and any surplus power is exported to the grid. Thus saving the grid power in daytime and importing the exported power during night. Besides, the net- metering system offsets continuous variations in solar power by making available grid supply as standby. This basic principle itself underlines the limitations of net- metering. Every moment proper load management has to be done, which is practically quite difficult. The solar system necessarily needs other power source to work as standby and to do the task of correcting the deficit in solar power or accepting the excess solar power at any moment. In net- metering this is managed by the grid. The net-metering system is thus impossible to work as stand alone. The grid power has its own task of balancing the load. The net- metering may over burden the grid. Hence the power distribution companies have put a cap of about 40 percent of total load to be shifted to solar power. Hence the net-metering will soon reach a saturation point and will have to be abandoned in not so distant future. Fortunately, new innovative solutions to store solar power are being developed and would soon make the combination of net-metering and local storage work as stand alone, but then it will not be net- metering.”

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