Policy framework for rooftop energy

During Phase I (2012) of the Jawaharlal Nehru National Solar Mission, there were suggestions for the adoption of a net-metering approach for rooftop photovoltaic  (RTPV) at the national level. This was based on the premise that commercial and high-end residential consumers should pay more so that incremental costs of RTPV are not passed on to all categories of consumers.

Karnataka was one of the states to embrace the net-metering policy. In October 2014, the RTPV scheme was announced for residents of Bengaluru. The net-metering tariff was set at Rs 9.56/kWh (without central government subsidy) and Rs 7.2/kWh (with subsidy).

While these numbers were very encouraging to begin with and among the highest in the country, consumers soon discovered that there were constraints that they could not circumvent. Certain households with the financial resources to invest in RTPV systems realised that either their rooftops were too small or their consumption was too high to generate excess electricity eligible for compensation.

A total of 15 MW worth of applications were received by the BESCOM and only around 2.5 MW has been commissioned. The new 40 GW national RTPV target for 2021-22 translates to around 2.5 GW for the state according to the estimates of the Centre for Study of Science, Technology and Policy (CSTEP). Since Bengaluru accounts for more than 1/3 of the state’s electricity consumption, the RTPV target for the city alone is around 1 GW. Bengaluru has around six years to increase its RTPV capacity by almost 400 times!

At a recently organised workshop to discuss possible policy interventions, one of the key suggestions was to introduce a Feed-in-Tariff (FiT) or Gross Metering (GM) mechanism where RTPV consumers would get paid in the range of Rs 7.44-7.97 for every unit generated from their systems. This way, co-nsumers across all income categories can install RTPV syst-ems with feasible business cases.

This also opens up the field for third party investors/developers who target low income households. They lease viable rooftops and install RTPV systems to receive compensation through the FiT scheme. Most stakeholders in the RTPV reg-ime believe that a FiT scheme will increase the adoption rate.

However, some people with larger rooftops and lower cons-umption will not be pleased with such an abrupt course correction in policy. Especially when the current policy explicitly mentions that RTPV consu-mers entering into Power Purchase Agreement (PPA) with BESCOM before 31.03.2018 will be eligible for net-metering compensation for 25 years.
If this category of consumers shies away, a significant chunk of rooftop potential will remain unexplored. To find a solution to this, CSTEP is examining the RPTV policy regime along with BESCOM’s financials.

Generation potential
A systems engineering appro-ach is being followed to examine this problem. A Geographical Information Systems (GIS)-based web tool is being developed with Light Detection and Ranging (LiDAR) technology to accurately estimate generation potential of rooftops in the city.

The tool will use a Multi-Criteria Analysis (MCA) algorithm – including financial burden on BESCOM as well as the consu-mer’s business case – to identify the most suitable rooftops in the city to reach the 1 GW target. Policy analyses arising out of this tool will assess the longevity of the net-metering scheme and the emergence of a FiT/GM regime with appropriate rates.

It will also result in a road-map for RTPV in Bengaluru which will aid BESCOM in their preparations to absorb power generated from RTPV systems. The roadmap will show how tariff structures will be revised for society and industry in alignment with RTPV penetration.
The Renewable Purchase Obligation (RPO) concept was built on the premise that society will gradually bear the incremental costs of RE. Most policy research organisations and institutions agree that tariffs will rise in the near future. The rece-ntly announced UDAY scheme for ailing distribution utilities will make rate of tariff increase more acceptable for consumers.

Initial results of analysis show that RTPV in Bengaluru will need the net-metering scheme (albeit windfall profits for a few consumers) to support early adopters, as well as a GM/FiT scheme (with a suitable rate ~ Rs 7.5/kWh) for consumers with smaller rooftops.

The existence of two policies for two categories of consumers is complicated for BESCOM, but it will foster RTPV growth in the city. Further research will show if FiT needs to replace net-metering completely and if so, in which year and what could be a suitable tariff.

(The writer is Senior Research Engineer, Centre for Study of Science, Technology and Policy, Bengaluru)

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