Analysis of net-metering regulation of Rajasthan

Key points of the Regulation:
Rajasthan came out with the final net-metering regulation on 26 Feb 2015. The below are key points of the regulation:
• Net-metering permission to be provided on a first-cum-first-serve basis by the distribution licensee. Overall capacity to be limited to 30% of the capacity of the distribution transformer.
• Maximum capacity of the plant will be 80% of the contract demand of the consumer.
• Minimum size of the plant – 1kwp, maximum – 1000 kwp.
• Time bound approval process by the Discom.
Energy accounting related points:
• Consumer will get credit for energy injected into the grid for the billing period
• If electricity injected exceeds the units consumed in the month, credit  will be carried forward to next period to the extent of 50 units (the draft  regulation had allowed a full carry forward to the next month).
• Excess units (>50 units) will be paid for at the rate set by RERC (currently Rs 6.631) by the Discom.
• The plant will be exempt from banking, wheeling and cross-subsidy charges. This will encourage the model of third-party ownership of the plant.
• A bi-directional/ net-meter will be required to be installed. Those with ABT meters already installed will not be required to install a net-meter
Issues for consideration:
1. Clarity on Solar RPO fulfillment by an obligated entity through net-metered solar PV project:
The policy is not absolutely clear on the ability of an obligated entity to meet its solar RPO through generation of rooftop solar. The policy says: “The quantum of electricity generated from the Rooftop PV Solar Power Plant under net metering arrangement by an Eligible Consumer, who is not defined as obligated entity, shall qualify towards compliance of Renewable Purchase Obligation (RPO) for the distribution licensee in whose area of the supply the Eligible Consumer is located.” (emphasis supplied)
Thus, the Discom can meet its solar RPO through entire generation from a net-metering plant, when the consumer is not an obligated entity. Since, for an obligated entity the Discom will not be able to use the power generated for RPO offset, it implies that the obligated entity will be able to use it. However, the regulation does not expressly state so.
Can an obligated entity avail RPO benefit by installing a net-metered solar PV project?
In our opinion, the answer is a qualified ‘yes’.
The draft regulation allowed the entire generation from the plant to be adjusted against the consumption by carrying forward such excess  (without any limit) to the next months.  However, the final regulation allows carry forward to next month only to the extent of 50 units. The excess is paid for by the Discom at the preferential tariff. This will make claiming RPO offset difficult as when the Discom pays preferential tariff, it will be allowed to use such power to meet its RPO.
Thus, an obligated entity will only be able to meet its RPO to the extent of offset available against its consumption, not on the excess for which received preferential tariff.
It is worth noting that the ability of claiming RPO offsets is not expressly mentioned in this regulation – instead it is mentioned in the  RPO regulation (2nd Amendment) as an observation by the commission:
Treatment for Roof Top/Land mounted solar plants in consumer premises: 
10. The Commission observes that no new provision as suggested by the stakeholders is required in the regulations since any RE power produced by captive RE source for own consumption or taken through open access is considered towards fulfillment of their RPO…..
However, the energy accounting methodology will be complex (because of the change where only a limited carry forward is allowed).
In our opinion, the best course of action for an obligated entity is likely to be to build capacity well within its consumption requirements on a monthly basis, so that the situation of carry forward does not arise.
2. REC eligibility for a net-metered solar plant:
The draft regulation contained a clause that allowed RECs as per CERC REC regulations. However, in the final regulation such a clause has been removed. Thus, it appears that net-metered plants will not be eligible for RECs.
The RERC final regulation is available here.