Solar power rates go through the roof, govt at losing end

Solar power rates go through the roof, govt at losing end

No pacts with industry for rooftop energy; curbs on home units

Solar power rates go through the roof, govt at losing end

With the cost of rooftop solar power exceeding the present market rate, the government has stopped signing tripartite pacts for solar energy with industry. It will now get into pacts only with households, provided they generate power only for their consumption.

The government initially wanted to promote renewable energy and allowed building owners, financiers and escoms to sign tripartite agreements.

The price fixed by the Karnataka Electricity Regulatory Commission (KERC) for one unit of solar power is Rs 9.56 for those who have not availed subsidy and Rs 7.20 a unit for those who have availed subsidy.

However, in the last two years, the cost of solar power in the open market has drastically declined to under Rs 5 a unit. The National Thermal Power Corporation (NTPC), which is executing a 2,000 MW solar park at Pavagada in Tumakuru district, has quoted Rs 4.65 a unit while it is Rs 4.34 a unit in the recent tenders in Rajasthan, a senior official in the energy department told Deccan Herald.

The KERC is now likely to announce a revised solar power tariff, which could be less than Rs 5 a unit, on April 20. It will also come up with the gross metering concept where the entire power generated on a rooftop can be sold to the grid.

Under the net metering concept, the power generated is used by the installer while the excess power is sold to the grid.

“According to the new order, no domestic rooftop installation can sell power to the grid as it is restricted to their installed capacity. This is being done to discourage people from investing in rooftop panels for households,’’ says Jagadishchandra Shetty, director Greensol Renewable Power Pvt Ltd. 

He feels that the state shouldn’t have gone in for tripartite agreements as they were set to lose financially by buying power at a higher price. 

“There was nothing wrong in promoting the government policy. Now, in the current situation, there is need to regulate the flow of investments in rooftop solar units,’’ an official said. 

“By restricting the TPA to allocated load for households, the government will not only offload its peak demand but will also save money for escoms as power purchased during peak hours is more expensive than it is billed to domestic consumers,’’ an officer said. 

On the other side, he explained: “The power sold to industry is higher than the purchase price by escoms. “It makes sense to sell power to industry instead of buying it from them at Rs 9.56 a unit. And during lean hours, power is available at a much lesser price. It won’t be a burden on escoms,’’ he said, reasoning the government’s rationale behind the April 2 order restricting the TPAs only to domestic households. 

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