Karnataka solar – Net metering or gross metering?

Karnataka has fine-tuned their rooftop solar policy (memorandum reproduced at the end of this post)

  1. The maximum size of the rooftop solar plant was earlier limited to 150% of the sanctioned load. This has been reduced to 100% of the sanctioned load.
  2. Earlier, commercial consumers were eligible for net metering while Domestic, Hospital and Educational institutions were eligible for gross metering. Now Domestic, Hospital and Educational institutions can opt for either gross or net metering by a one time irrevocable option

The tariffs for buyback of solar power have not been changed.

Capacity of Solar Rooftop and small PV power plants Approved Tariff in ₹/Unit (Without Capital Subsidy) Approved Tariff in ₹/Unit (With Capital Subsidy of 15%)
1 to 10kW 7.08 6.03
Above 10kW and upto 50kW 6.61 5.63
Above 50kW and upto 100kW. 6.14 5.23
Above 100kW and upto 500kW 5.67 4.83
Above 500kW and upto 1MW 5.20 4.43

These rates are fixed for the duration of the 25 year Power Purchase Agreement (PPA).

We have earlier written here and here about how Karnataka residents can take maximum benefit from the rooftop solar policy, and the indicative returns. With the new changes, people wanting to erect solar photovoltaic on their roof will face an additional question:

Net metering or gross metering?

Consider a domestic LT-2(a)(i) consumer having a monthly electricity consumption of 100 units and a capacity to install a rooftop solar plant that would generate 250 units a month.

Gross metering Net metering
Electricity bill before solar ₹ 398 ₹ 398
Electricity bill after solar (1) ₹ 398 ₹ 0
Units eligible for sale to BESCOM 250 150
Revenue from sale @ ₹7.08 / unit (2) ₹ 1,770 ₹ 1,062
Net income (2 – 1) ₹ 1,372 ₹ 1,062

Thus a first look at the calculations suggest that Gross metering is the financially attractive option. However, we at Oorjan recommend net metering as we feel it offers long term benefits:

  • The solar buyback tariff is fixed over the 25 years of the PPA, however the electricity tariffs are not.
  • Private educational institutes and hospitals have an electricity tariff greater than the solar tariff (maximum ₹7.08 / unit), so they do not benefit from gross metering.
  • Domestic connections with a consumption more than 200 units a month pay ₹6.90 per unit. A 3% increase in this tariff will make it greater than the maximum solar tariff.
  • Electricity tariffs in Karnataka have risen 5-10% a year in the past few years.
  • Net vs gross metering is a “one time irrevocable option” – it will not be possible to change from gross to net metering in future if tariffs rise.

Net metering therefore offers a hedge against rising electricity tariffs.

Use our solar sizing and cost estimator to get started on rooftop solar in Karnataka today!

 


Bangalore Electricity Supply Company Limited
(wholly owned Government of Karnataka undertaking)

Office of the General Manager Ele).,
Telephone : 080-2234 1199
DSM, Corporate Office,
BESCOM, K.R. Circle,
Bangalore – 560 001.
Date: 29-09-2016
Email ID : gmdsm@bescom.co.in
Ref No. : BESCOM/BC-51/GNL-039/2015-16/CYS-55

OFFICIAL MEMORANDUM

Sub: Modification to Solar roof top KERC order dtd: 02.05.2016 for determination of tariff and other norms for solar rooftop and solar photovoltaic power plants.

Ref:

  1. KERC tariff order no: 02.05.2016.
  2. KERC tariff order no: S/03/1, 19.09.2016.
  3. T.O OM No: BESCOM/BC-51/7461/2016-17/CYS-49, dtd: 09.08.2016.
  4. MD, BESCOM approved by PLO file no: 8172, dtd: 26.09.2016

****

Preamble:
The Hon’ble KERC vide order dtd: S/03/1 dtd: 19.09.2016 has issued Modification to the order 02.05.2016 in respect of determination of tariff and other norms for solar rooftop and solar photovoltaic power plants with respect to providing one time irrevocable option of either gross or net metering for consumers under Domestic, Hospital and Educational institution categories and limiting installed capacity for 100% of sanctioned load.

Hence this OM;
Following modification are made in the BESCOM Om cited under ref (3) with immediate effect.

  • To allow one time irrevocable option of either gross or net metering for consumers under Domestic, Hospital and Educational institutions categories at the time of application.
  • To limit installed capacity of SRTPV solar PV plant to 100% of the sanctioned load of the installation of the consumer.

The above modified provisions shall be applicable to PPAs that would be executed hereafter.

All the other provisions of the commission’s order dtd: 02.05.2016 and BESCOM OM cited under ref (3) remain unaltered.

(signed) 29/9/16
Director (Technical)
BESCOM, Bangalore.

Copy for kind information and needful to:

  1. All Chief General Managers, BESCOM, Corporate office.
  2. All Chief Engineers (Ele), C,O&M Zone, BESCOM.
  3. The Company Secretory, BESCOM, Corporate office.
  4. All General Managers, BESCOM, Corporate office.
  5. All Superintending Engineers (Ele), C,O&M Circles, BESCOM

Copy to:

  1. All Executive Engineers (Ele), C,O&M, Divisions, BESCOM
  2. All Assistant Executive Engineers (Ele), C,O&M, Sub-divisions, BESCOM
  3. Ps to MD/D(T)/D(F) with a request to place before the chair of MD/D(T)/D(F), BESCOM
  4. MF/OC.

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