Solar Rooftop & Net Metering

In recent months many states have formulated ‘Net metering’ policies. These polices herald an exciting phase in the development of solar sector in the country as they will enable every household to become a power generator.
In this article, we have compared the various net-metering approached adopted by states. Some states have formulated regulations, while other have declared policies. While regulations are specific and binding, policies are more directional and state-ments of intent. Further, it is important to study and understand the fine-print of the regulations or poli-cies, as the way the policy works will have a signifi-cant impact on the return made by investors of roof-top projects.
A key difference is in the tariff paid for power ex-ported to the grid. Some states have adopted a ‘feed-in-tariff’ (FIT) approach, while other will al-low carryover of excess power to the next month – implying that the tariff is equal to the retail tariff be-ing paid by the consumer. FITs range from Rs 8.15 to Rs 9.56 per unit – these are significantly higher from the recently discovered prices of MW scale solar

projects of Rs 6- 7 per unit. In the case of offset with retail tariffs, projects will benefit from annual escala-tions, and therefore will see increasing savings over the life of the project.
We believe that net-metering regulations are im-portant to make solar of every roof a reality. How-ever, a key shortcoming in the existing regulations is that the procedure to get net-metering going are missing. Any net-metering project will involve an agreement with the Discom, and this is where pro-cedural and operational challenges will crop up. Simple, yet detailed and time-bound procedures need to be laid out on how to make a roof-top pro-ject a reality. Only Delhi has made some headway in laying down detailed procedures that projects can follow to get net-metering in place.
Table below compares each policy with the other.