Gujarat, one of India’s leading states in solar energy production, has introduced a new net metering policy aimed at accelerating the adoption of rooftop solar systems. This policy plays a pivotal role in shaping the state’s renewable energy landscape, making solar power more accessible and financially rewarding for both residential and commercial users. The revamped policy encourages homeowners, businesses, and industries to harness solar energy while contributing to the state’s ambitious clean energy targets.
In this article, we explore how Gujarat’s new net metering policy is boosting rooftop solar adoption and transforming the state’s energy ecosystem.
The Gujarat Electricity Regulatory Commission (GERC) has revised the Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations, 2016. According to the new Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) (Third Amendment) Regulations, 2022, net metering will be permitted for rooftop solar systems with capacities ranging from 1 kW to 1 MW. Rooftop solar systems with capacities ranging from 10 kW to 1 MW will be eligible for gross metering.
Residential rooftop solar projects will be permitted under the new regulations, regardless of the sanctioned load. Consumers can take advantage of the program’s incentives. For captive consumers and projects set up under third-party sale within the permissible limit, there will be no capacity restrictions up to the sanctioned load demand. If a rooftop project set up under the gross metering mechanism by a residential or government consumer is located on their property, the DISCOM will purchase ownership or legal possession of the property under the Policy for Development of Small Scale Distributed Solar
Projects, 2019.
Solar project installation will be permitted up to the sanctioned load for projects established under the renewable energy certificate (REC) the mechanism for captive use or third-party sale. The capacity of solar projects built to meet renewable purchase obligation (RPO) requirements will be permitted regardless of their sanctioned load.
Understanding Net Metering
Net metering is a billing mechanism that allows solar energy users to receive credits for the electricity they generate and send back to the grid. When solar panels produce more electricity than a household or business needs, the excess power is exported to the grid, and users receive credits on their electricity bills. During periods of low solar generation, such as at night, users can draw power from the grid while offsetting the cost with the credits earned earlier.
Gujarat’s new net metering policy enhances this process, making it more attractive for individuals and businesses to invest in rooftop solar installations.
Residential and Government Projects
Rooftop solar projects installed on residential consumers’ rooftops will be permitted, regardless of the sanctioned load. A developer can also set up a solar project on the rooftop of a residential customer to generate and sell power to another consumer on the same premises under a third-party sale. In this case, the developer and consumer must enter into a lease or power sale agreement.
DISCOM must purchase power at 2.25 ($0.029)/kWh for the first five years from the project’s commissioning in the case of self-owned systems and SURYA Gujarat project consumers. Following that, they should purchase it at 75% of the simple average of the tariff discovered and contracted under GUVNL’s competitive bidding process 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, DISCOM must purchase the power at 75 percent of the simple average tariff discovered and contracted under GUVNL’s competitive bidding process for non-park-based solar projects in the six months preceding the project’s commercial operation.
The same must be fixed for the duration of the contract. GUVNL will declare such rates on a six-monthly basis, and they will be applicable under the agreement that Soleos will execute with the consumer. Residential consumers will not be charged any bank fees for using solar power.
Captive Project
There will be no capacity restrictions in this category. The captive consumer must make use of the energy produced by such a project. Annual documentation must be submitted to prove ownership of the captive solar-generating project and its annual energy consumption.
In the case of solar projects set up for captive use by HT or EHV consumers, energy set-off will be permitted between 7.00 and 18.00 hours on the same day. After the specified period, the surplus energy should be purchased by the respective DISCOM.
The energy set-off period for solar projects set up by LT demand-based consumers for captive use will be between 7.00 and 18.00 hours. The surplus energy not consumed by the customer during the period after set-off should be compensated by the respective DISCOMs using the surplus injection compensation (SIC) rates.
Surplus injection compensation rates for projects established by micro, small, and medium (MSM) manufacturing enterprises will be 2.25 ($0.029)/kWh for the first five years following project commissioning. They must later purchase it at 75% of the simple average tariff discovered by GUVNL for non-park-based solar projects in the six months preceding the project’s commercial operation. The tariff will be in effect for the duration of the agreement.
For projects set by non-MSMEs, the surplus injection compensation rate will be 75% of the simple average tariff discovered and contracted under GUVNL’s competitive bidding process for non-park-based solar projects in the six months preceding the project’s commercial operation. The same will apply for the duration of the agreement.
Solar energy consumed by demand-based consumers will be subject to banking charges of 1.50 ($0.019)/kWh. Banking charges of 1.10 ($0.014)/kWh will apply to MSME manufacturing units and other than demand-based consumers. Government buildings will not be levied with banking fees.
Third-Party Sale of Project
The sale of electricity to third-party consumers by the owner of a solar power project will be considered a third-party sale. Developers can also install projects on consumers’ rooftops to generate and sell power through a lease or power purchase agreement.
Energy set-off will be permitted between 7:00 and 18:00 hours of the same day for solar rooftop projects set up by HT/EHV consumers and LT demand-based consumers. After the specified period, DISCOMs should purchase any surplus energy.
DISCOMs must compensate the consumer for any excess energy not consumed 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 six months preceding the project’s commercial operation. The same will remain constant for the duration of the contract.
Solar energy consumed by demand-based consumers will incur banking charges of 1.50 ($0.019)/kWh. A banking charge of $1.10 ($0.014)/kWh will be applied to MSME units other than LT demand-based consumers. Government buildings will not be subject to banking fees.
Rooftop solar projects under the REC mechanism can be established in accordance with the Central Electricity Regulatory Commission’s administrative procedures for registration and accreditation (CERC).
The energy accounting for projects established under the REC mechanism should be done in 15-minute time blocks.
Surplus energy after being set off on a 15-minute time block basis should be compensated by DISCOMs at 65 percent of the simple average of the tariff discovered by GUVNL for non-park-based solar projects in the preceding six months from the project’s commercial operation in the case of projects set up for captive or third-party sale under the REC mechanism. The tariff will be in effect for the duration of the agreement.
A tariff of 65 percent of the simple average tariff for solar projects located outside of solar parks in the six months preceding the signing of the PPA will apply to DISCOMs agreeing to purchase electricity under the REC mechanism. The tariff will be in place for the duration of the agreement.
There will be no banking fees. Cross subsidy surcharges and additional surcharges, as determined by the Commission, will be applied to projects set up for third-party sale. Transmission and wheeling charges and losses will be assessed based on the project’s location and point of consumption.
Projects Set For RPO Complaince
Customers will be able to create projects to meet their RPO requirements regardless of contracted demand. Energy accounting for such projects must be done in 15-minute increments.
DISCOM will consider purchasing surplus solar energy from captive or third-party solar projects to fulfil its RPO. The DISCOM will compensate the excess 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 this compensation will be valid for the duration of the agreement. There will be no banking fees to pay.
When power wheeling or transmission for captive consumption is permitted with open access permission, the 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 surcharges and additional surcharges will not apply to captive projects. The cross subsidy surcharge and additional surcharge will be the same for projects set up for third-party sale as they are for regular open access consumers.
GERC reiterated in February that DISCOMs procuring surplus energy from rooftop solar projects must use the state’s average power purchase cost of 4 ($0.053)/kWh as the ceiling for the fiscal years 2020–21.
Cost-benefit
The homeowner can conduct a cost analysis and determine the amount of electricity required to be profitable. This could encompass both the quantity of power that can be sent to the grid to produce more cash and satisfy the homeowner’s power needs.
Rooftop solar systems are becoming increasingly popular as a source of electric power since they are renewable and abundant during the day. Implementing an appropriate rooftop solar system with careful planning can result in an endless supply of electric power with low recurrent costs.
Is solar energy a good fit for your home?
This is unquestionably the most important item to understand before installing solar panels. So, how can you know if your home is solar-ready? Here’s a list of “indicators” to look for when determining whether your home is solar-ready:
Solar panels don’t perform well in the shade, thus there should be very little of it. It’s best if there’s a lot of direct sunshine. So, if your property is in the shadow of a skyscraper or was built next to a colosseum, you might want to consider moving before going solar!
How much would you save on your electricity bill if you go solar? Solar doesn’t always work out well for everyone. You should have a power bill of at least $300 every quarter and utilise at least half of your energy during daylight hours to get the most out of your solar panels. This is more of a guideline than anything else. In general, the higher your electricity expense, the more benefit solar panels will provide.
The direction of the roof isn’t important right now. It is, nonetheless, critical. You should have a large North-facing roof to get the most out of solar panels (if you live in Australia). East-West cooperation is also possible. Especially for setups with an overloaded inverter.
Which Solar Panels and Inverters Should You Purchase?
There are numerous brands of solar panels and inverters to choose from. When selecting a solar panel or inverter, keep the following guidelines in mind:
Panels of solar energy:
Choose a business that has been in operation for a long time.
Avoid panels that try to pass themselves off as European or have special qualities.
Get a few quotations and choose a reasonable price and an excellent product rather than paying top dollar.
Inverter:
If you plan on staying in the house for a long time, pay top dollar for a high-quality product.
If you’re buying for a rental property or won’t be staying long, go for a low-cost panel.
What should your contract contain?
The contract you sign should include all the financial, ownership, and performance requirements. Because these systems can contain web-enabled equipment, you should also check to see if someone is collecting data on your home’s energy production and consumption and who has access to it.
Key Features of Gujarat’s New Net Metering Policy
- Increased Capacity Limits
- The new policy increases the upper limit for rooftop solar system capacity, allowing consumers to install larger solar systems. This is particularly beneficial for industrial and commercial users who require higher energy consumption and have more extensive rooftops available for solar installations.
- Simplified Procedures
- The government has simplified the application and installation process for rooftop solar systems. By streamlining procedures, the policy removes bureaucratic hurdles, making it easier and faster for consumers to adopt solar energy.
- Financial Incentives and Subsidies
- The state offers financial incentives and subsidies to reduce the upfront cost of installing rooftop solar systems. These incentives, coupled with the cost-saving benefits of net metering, make solar energy an economically viable option for many.
- Time-of-Day Tariffs
- Under the new policy, Gujarat introduces time-of-day tariffs, where solar power generation during peak hours earns higher credits. This encourages users to maximize their solar energy production during high-demand periods, further increasing savings.
- Flexible Billing Options
- The new net metering framework allows consumers to carry forward excess credits for an extended period, ensuring that users can benefit from their surplus solar energy across different seasons. This flexibility enhances the financial returns on rooftop solar installations.
Boosting Rooftop Solar Adoption in Gujarat
1. Cost Savings for Consumers
- One of the primary advantages of the new net metering policy is the significant cost savings for consumers. By exporting excess electricity to the grid, users can lower their electricity bills, often reducing their energy costs by 50% or more. With the increasing affordability of solar panels and installation, rooftop solar becomes an appealing option for a broader range of consumers.
2. Increased Awareness and Accessibility
- Gujarat’s government has initiated awareness campaigns to educate consumers about the benefits of solar energy and net metering. These efforts aim to demystify the technology and inform users of the financial advantages. Coupled with simplified procedures and better incentives, this has made rooftop solar more accessible to middle-class households and small businesses.
3. Support for Commercial and Industrial Users
- The new policy is particularly beneficial for the commercial and industrial sectors, which have higher electricity demands. With increased capacity limits and better financial incentives, businesses can offset a more substantial portion of their energy needs with rooftop solar systems. This helps industries lower operational costs and meet sustainability goals.
4. Environmental Impact
- Gujarat’s commitment to renewable energy is not just about economic benefits; it’s also about reducing the state’s carbon footprint. By promoting rooftop solar adoption, the state contributes to reducing greenhouse gas emissions, improving air quality, and promoting sustainable energy practices. The new policy aligns with India’s national target of achieving 450 GW of renewable energy by 2030.
5. Job Creation and Economic Growth
- The growing demand for rooftop solar installations is expected to create jobs in the renewable energy sector, particularly in installation, maintenance, and manufacturing of solar components. This will contribute to Gujarat’s economic growth while supporting the transition to a green economy.
Conclusion
Gujarat’s new net metering policy marks a significant step toward boosting rooftop solar adoption in the state. By increasing capacity limits, simplifying processes, and offering financial incentives, the policy makes solar energy more accessible and financially attractive to consumers across residential, commercial, and industrial sectors. As more consumers embrace rooftop solar, Gujarat is poised to lead India’s renewable energy revolution, setting an example for other states to follow.
The future of Gujarat’s energy landscape is brighter than ever, powered by the sun and driven by innovative policies that encourage sustainable development. With the right infrastructure and continued government support, rooftop solar could become a mainstream energy solution, empowering consumers and contributing to a greener, more sustainable future.
Take the next step in renewable energy by joining the Solarize Bharat pledge. Imagine your business not just as an entity benefiting from solar power but as a contributor to a nationwide movement, shaping the future of energy in our incredible nation.
Stay solar-powered and environmentally inspired!
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