Bridge India

Weekly Update: Kerala announces a draft net metering policy

The Kerala State Electricity Regulatory Commission (KSERC) has announced its draft net metering policy titled, ‘Draft Kerala State Electricity Regulatory Commission (Grid Interactive Distributed Solar Energy Systems) Regulations, 2014’. Stakeholders are invited to provide comments on or before 28th of February 2014.

  • The net metering policy is by far the best consumer oriented net-metering policy
  • The highlights of the commercial, technical and procedural details are given below
  • The policy prescribes a penetration limit of 50% which is significantly higher than the 15% limit in Delhi and 30% in Tamil Nadu

Kerala’s net metering policy is by far the best consumer oriented net-metering policy. It is open to all consumers across the state unlike Tamil Nadu’s net metering policy that is limited to residential consumers, or Andhra Pradesh’s policy that is limited only to consumers that have three phase connections. The policy, similar to Uttarakhand’s net metering policy, allows third party ownership models. This is expected to attract a lot of interest from developers that look at third party ownership models. The highlights of the policy are:

Commercial details

  • The policy does not set an upper cap on amount of energy that can be banked. The net metering policies of Delhi and Tamil Nadu – both suggest a maximum cap of 90% of the consumer’s energy requirement in a calendar year. The policy also prescribes that the DISCOM shall pay the consumer the Average Pooled Purchase Cost (APPC) of INR 1.99/kWh for the excess energy injected onto the grid after the banking settlement – a first in India. This is perfect for consumers that want to capitalize on excess rooftop space. No longer shall such consumers be limited by the maximum energy that can be injected on to the grid.
  • This policy has a first of its kind ‘sharing concept’ wherein a consumer that has several premises across the state, can install a solar plant on one location and wheel the excess power to the other locations. Although, this entails a wheeling charge of 5%, this is a perfect opportunity for IT companies, textile mills and other retail outlets that may have multiple locations in the state. This way, the consumer can optimize on the ideal rooftop space and minimize installation and maintenance cost.
  • From the DISCOM’s point of view, all energy generated from solar plants registered under this policy shall be considered to meet the DISCOMs Renewable Purchase Obligation (RPO).

Technical details

  • The policy limits system sizes to 3 MW
  • The policy suggests the following grid connectivity voltages across different solar system sizes
  • The connection voltages are as follows:
    • System size of 5 KW or under to be connected at 240 V (single phase)
    • System size of 100 KW or under to be connected at 415 V (three phase)
    • System size of 3 MW or under to be connected at 11 KV
  • From a technical perspective, this policy prescribes a penetration limit of 50% of every distribution transformer capacity. For instance, if a certain locality has a distribution transformer capacity of 1 MVA, then 500 kW of solar capacity shall be approved on a first-come-first-serve’ basis. This limit is significantly higher than Delhi’s limit of 15% and Tamil Nadu’s limit of 30%.

Procedural details

  • The policy mandates the DISCOM to grant connectivity within seven days provided there is enough capacity on the distribution transformer. If not, then the DISCOM is required to upgrade the transformer with two months. This seems highly unlikely. Questions such as who bears the cost of the upgradation are not addressed in the policy. It is very likely that the DISCOM will oppose any upgradation unless adequately compensated for.


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