Gujarat to Allow Net Metering for Rooftop Solar Systems upto 1 MW

The Gujarat Electricity Regulatory Commission (GERC) has made several changes to the Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations, 2016, which were published in 2016.

Net metering would be permitted for rooftop solar systems with a capacity of 1 kW and up to 1 MW, as stated by the new rule known as the Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) (Third Amendment) Regulations, 2022. It will be possible to use gross metering for rooftop solar systems with capacities ranging from 10 kW to 1 MW.

Rooftop solar projects that are put up by residential users will be permitted under the new legislation, regardless of the sanctioned load that may be supported by the system. As part of the scheme, consumers are eligible to receive rewards. For captive customers and projects that are put up under third-party sale within the legal limit, there will be no capacity constraints up to the sanctioned load demand.

In the event that the rooftop project that is established by residential or government consumers in accordance with the gross metering mechanism is located on their premises, then the ownership or legal possession of the premises will be purchased by the DISCOM in accordance with the Policy for the Development of Small Scale Distributed Solar Projects, 2019, which was just released.

The Gujarat Electricity Regulatory Commission (GERC) has revised the 2016 Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations.

The new regulation, titled Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) (Third Amendment) Regulations, 2022, stipulates that net metering will be permitted for rooftop solar systems with a capacity between 1 kW and 1 MW. Gross metering will be permitted for rooftop solar systems with capacities between 10 kW and 1 MW.

According to the new policy, residential rooftop solar projects will be permitted regardless of the authorized load. The program provides consumers with incentives. There will be no constraints on capacity up to the authorized load demand for captive consumers and third-party sale projects within the legal maximum.

In accordance with the Policy for Development of Small Scale Distributed Solar Projects, 2019, the DISCOM will acquire ownership or legal possession of the property if the rooftop project installed by residential or government consumers under the gross metering mechanism is located on their premises.

The installation of solar projects up to the sanctioned load will be permitted for renewable energy certificate (REC) projects intended for captive use or sale to third parties. The capacity of solar projects designed to satisfy renewable purchase obligation (RPO) criteria will be permitted regardless of their authorized load.

Residential and government construction

On-roof solar projects installed by residential consumers regardless of the authorized load will be permitted. Under third-party selling, a developer may also install solar projects on the rooftop of a residential customer for the generation and sale of electricity to another consumer on the same property. In this instance, the developer and consumer must enter into a lease or power purchase agreement.

In the case of self-owned systems and SURYA Gujarat project consumers, DISCOMs are required to purchase power at 2.25 ($0.029)/kWh for the first five years following the project's commissioning. Afterwards, they must acquire it at 75% of the simple average of the tariff discovered and contracted through the competitive bidding process undertaken by GUVNL for non-park-based solar projects in the six months before the project's commercial operation.

For projects designed for third-party sale, DISCOMs must purchase the power at 75% of the simple average tariff discovered and negotiated through the competitive bidding process conducted by GUVNL for non-park-based solar projects within six months prior to the project's commercial operation. The same must remain constant during the duration of the contract. These charges will be announced by GUVNL every six months and will be applicable under the agreement that DISCOM will execute with the consumer.

No banking fees will be assessed for household solar energy consumption.

Captive projects

There will be no capacity restrictions for this category. The captive consumer must utilize the project's generated energy. The ownership of the captive solar generating project and its annual energy usage must be demonstrated by providing documentation annually.

The energy set-off will be permitted between 7:00 a.m. and 8:00 p.m. on the same day for solar projects established by HT or EHV users for captive usage. After the allotted time, the respective DISCOM should acquire the surplus energy.

In the event of solar installations established for captive use by LT demand-based clients, energy set-off will be permitted between 7:00 and 18:00 hours. The surplus energy not consumed by the user during the period after set-off must be reimbursed by individual DISCOMs according to surplus injection compensation (SIC) rates.

The excess injection compensation rates for projects established by micro, small, and medium-sized (MSM) manufacturers will be 2.25/kWh for the first five years following the project's commissioning. Later, they should purchase it at 75% of the simple average rate determined by GUVNL for non-park-based solar projects in the six months before the project's commercial operation. The rate will stay in effect for the duration of the contract.

The surplus injection compensation rates for non-MSMEs will be 75% of the simple average tariff discovered and contracted through the competitive bidding process undertaken by GUVNL for non-park-based solar projects in the six months prior to the project's commercial operation. The terms will stay unchanged for the duration of the agreement.

For demand-based clients, solar energy consumption will incur banking costs of 1.50/kWh. For MSME manufacturing units and all other consumers, banking charges of 1.10/kWh will apply. Government structures are exempt from banking fees.

Projects for selling to third parties

It is a third-party sale when the owner of solar power installations sells electricity to other consumers. Developers can also build projects on the rooftops of consumers to generate and sell electricity through a lease or power purchase agreement.

The energy set-off for solar rooftop projects installed by HT/EHV consumers and LT demand-based consumers will be permitted between 7:00 and 18:00 on the same day. DISCOMs are required to acquire excess energy after the designated term.

DISCOMs must pay the excess energy not consumed by the consumer 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 prior to the project's commercial operation. The same will remain unchanged for the duration of the contract.

For demand-based clients, solar energy consumption will incur banking costs of 1.50/kWh. A banking charge of 1.10/kWh will be imposed for MSME units and other than LT demand-based clients. Banking fees will not apply to government structures.

Initiatives utilizing the REC mechanism

The Central Electricity Regulatory Commission has determined the administrative method for registration and accreditation for rooftop solar projects under the REC system (CERC)

Energy accounting for projects established using the REC method should be based on 15-minute time blocks.

In the event of installations designed for captive or third-party sale under the REC mechanism, surplus energy should be reimbursed by DISCOMs at 65% of the simple average of the tariff discovered by GUVNL for non-park-based solar projects in the preceding six months. The rate will stay in effect for the duration of the contract.

For DISCOMs agreeing to purchase power using the REC mechanism, the applicable pricing is 65% of the simple average tariff for solar projects located outside of solar parks in the six months preceding the PPA signing. The rate will stay in effect for the duration of the contract.

No banking fees will be assessed. As determined by the Commission, cross subsidy surcharge and additional surcharge will be imposed to projects intended for third-party sale in the same manner as for ordinary open access users. Transmission and wheeling charges and losses will be assessed based on the location of the project and the consumption point.

Projects designed for RPO conformance

Consumers will be permitted to establish projects to meet their RPO requirements regardless of their contracted demand. For such applications, 15-minute time blocks must be used for energy accounting.

The excess solar energy that DISCOM purchases from captive or third-party solar installations will be evaluated for RPO fulfillment. The DISCOM will compensate the surplus 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. This compensation rate will remain in effect for the duration of the contract. No banking fees will be assessed.

Electricity transmission and distribution

When wheeling or transmission of power for captive consumption is permitted with approval for open access, the same transmission charges and losses, wheeling charges, and unit losses that apply to regular open access users will apply.

Cross-subsidy and additional surcharges

In the case of captive projects, neither the cross-subsidy surcharge nor the additional surcharge will apply. Cross subsidy surcharge and additional surcharge will be the same for projects designed for third-party sale as they are for ordinary open access users.

In February, GERC reaffirmed that DISCOMs acquiring surplus energy from rooftop solar installations must use the state's average power purchase cost of 4 per kilowatt-hour for the fiscal year 2020-21 as a ceiling.

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