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Weekly Update: Uttarakhand releases its rooftop solar scheme

Weekly Update: Uttarakhand releases its rooftop solar scheme

Uttarakhand Renewable Energy Development Agency (UREDA) has released a document explaining the scheme developed to promote grid-connected rooftop and small-size solar PV power plants in the state.

  • The scheme provides for ‘net metering’ for grid connected rooftop solar plants and states that the solar system owner will be compensated for the excess power supplied to the grid at a tariff of INR 9.20/kWh
  • The scheme has a limit of 5MW, which means approximately 50 rooftop systems will be able to apply for this scheme
  • In case the 30% subsidy proposed by the MNRE is availed, this net metering scheme could be a good business proposition

The document (refer) in its current form, banks on the 30% subsidy provided by the MNRE. The benchmark cost for solar power plants, without battery and up to 100kW is specified as INR 100/W and the benchmark cost for the power plants ranging from 50 kWp to 100 kWp has been set at INR 90/W. The scheme provides for ‘net metering’ for grid connected rooftop solar plants. This means that the excess power generated by the rooftop system can be fed back into the grid. In turn, when sunlight is insufficient, power can be withdrawn from the grid. The scheme states that rooftop solar system owners will pay to the utility only for the net power consumed (power used from the grid minus power supplied to the grid). However, in case of excess generation, the system owner will be compensated for the excess power supplied to the grid at a tariff of INR 9.20/kWh as determined by the Uttarakhand Regulatory Commission (refer here). This amount will be paid directly by the Uttarakhand Power Corporation Limited (UPCL) to the system owner and will not be adjusted in the billing. To determine the value of net power consumed, two meters can be installed to measure the export and import of power separately.

As per the scheme, plant sizes eligible for the benefits are limited to 300 W to 100kW for systems with battery and up to 500kW for systems without battery. The application form to avail the scheme is available on the UREDA website. Once the target of 5MW is attained the applications will be closed.

Uttarakhand is the 5th state in the country to introduce net metering. BRIDGE TO INDIA believes that in the wake of increasing grid prices, as markets approach parity, net metering is a step in the right direction. We have seen recent solar policies, such as those of Tamil Nadu and Kerala, introducing net metering as well. The CERC is also expected to release net metering guidelines within this year.

We believe that in case the 30% subsidy proposed by the MNRE is availed, Uttarakhand’s net metering scheme could be a good business proposition. Especially for industries in Uttarakhand that can already benefit from various other schemes provided by the state, such as, Special State Transport subsidy, VAT Reimbursement and single window clearance. However, the MNRE has not been able to clear its backlog of subsidy claims, which is the most important concern for those interested in reaping the benefits of this scheme. With only a limit of 5MW, approximately only 50 rooftop systems will be able to apply for this scheme. Given that the power tariff is significantly lower than the solar default tariff in Uttarakhand, there is an incentive for users to power into the grid rather than consume it. We asked the Uttarakhand authorities how this could be avoided, but could not get a clear view on it.

This post is an excerpt from this week’s INDIA SOLAR WEEKLY MARKET UPDATE. Sign up to our mailing list to receive these updates every week.

You can view our archive of INDIA SOLAR WEEKLY MARKET UPDATES here.

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