Penalising DISCOMs for Net-Metering delays: Might drive growth in Solar Rooftop Industry

Nearly 95% of the solar rooftop plants that we see or install on our rooftops are installed under a scheme by the MNRE called as net - metering. Solar plants installed under this scheme, also called as grid connected, are able to push back excess electricity to the grid and thus store energy there instead of battries set. This saves huge on battery cost, as well as the recurring maintenance cost of these batteries. Current innovations in the field, like availability of the lithium ion battery has certainly reduced the amount of maintenance required and increase the lifecycle of a single battery though increasing the upfront cost substantially.

Looking form solar epc industry point of view, any project is profitable or is able to maintain profit ratio if it is complete in the scheduled timeline. Delays cost money and eat into the monthly revenue expected by the company. There are two categories of delay which generally occur during any solar plant installation:

- Delay by the installation company

- Delay by the DISCOMs and local authorities

As no ethical and working company want’s it’s customers to suffer unnecessarily the delays due to the company are pretty much limited to internal cash flow problems or material availability issues.

A ideal timeline to install Solar PV Plants should be in the range of 20-35 days from the date of order confirmations

But a major delay which occurs and is very much out of reach of the companies is due to the local DISCOMs way of working. It is important to understand here that the very customers who install solar plants to reduce their electricity bills are the premium customers who pay these DISCOMs heavily in electric bills per month. Thus, implementation of Net metering policy from the DISCOMs has been the primary impediment for rooftop growth in the country.

A ideal timeline to install Solar PV Plants from the date of order confirmation from the customers should not be more than 20 days if the DISCOMs and Solar companies work in sync, but due to the lags in the process it easily crosses 50 - 60 days timeline resulting in the customer wasting the electricity produced by the plant during this period. Consider claiming subsidy and the timeline goes haywire ranging from years to multiple years to claim the subsidy.

According to Mercom’s Q2 2020 India Solar Market Report, the share of residential rooftop solar installation was only 3% of the country’s total rooftop installations in the second quarter of 2020.

To combat this issue, Ministry of Power has planned to come up with a penalising scheme of Rs500 per day to the DISCOM if meter is not changed within 30 days of Solar Plant Installation certificate issued by the company.

The ministry also suggested that the distribution licensee should create a very missing consumer grievance redressal forum specifically for net metering. The timeline of addressing these grievances by the distribution licensee is within 30 days, and it should not exceed 45 days from the date of its receipt registration post which the consumers can approach the ‘ombudsman’. (An ombudsman is a government nominated official who investigates complaints.)

This is a very welcoming step though it is important to see first the on ground implementation of this, if and when it happens.