Climate is not changing, it has changed. Today, the world faces an Energy Paradox, wherein more energy is required to ensure fast-paced economic growth, while rampant use of energy is causing catastrophic climate change. Nearly, 80 to 85% of our energy needs are being fulfilled through fossil fuels. Coal, crude oil and natural gas take a very large share in our energy mix. Together, they stand as the major cause for global warming.
World is already warmer by more than 10C. As per the Intergovernmental Panel on Climate Change, we need to ideally limit global warming to 1.5 Degree Celsius, if not 2 Degree Celsius. And, as per the remaining carbon budget, there is only 6 to 7 years left before we touch the global warming of 1.5 Degree Celsius. This is a target that looks unachievable now – and therefore many countries are setting their Net-Zero emission year to achieve the “well below 2 degrees Celsius” target.
A new approach is essential
The remaining time is so short and the target is so hard, that business-as-usual approach is not going to work. If India has to set its target for net-zero by 2050, a completely fresh approach towards adoption of renewable energy has to be adopted. India has set the target of renewables in power generation from 175 GW by 2022 to 450 GW by 2030. However, that will need a lot of innovations in policy. Satisfying all the stakeholders like consumers, DISCOMs, Energy Regulators and the Government itself will not
To produce 175 GW power from renewable energy sources by 2022, distribution is done as 100 GW from solar power (60% through ground level panel installation method and the other 40% is to be recovered by rooftop panel installation), 60 GW from wind energy and 10 GW from biomass and 5 GW from small hydro projects.
In India, because of geographical advantage, average solar radiation present in most parts of the country is 4-7 kWh/sq.m/day. Also, the cost of solar energy technologies is rapidly declining and will continue to decline in the near future. Decentralized distribution of energy can empower people at the grassroots level. However, there are many hurdles in the solar sector, making it difficult to reach its target, especially the simplifying and befitting policy incentives.
The need of the hour
If India has to cut down its GHG Emission using clean energy technologies, then this is the time to fill the gaps and strengthen the solar policies. One of the key elements recently in discussion, which can increase the growth in solar rooftop installation is – Net-Metering. Not implementing the Net-Metering scheme for all types of consumers in Solar Policies of all states is highly criticised and argued that it will hinder the adoption of solar rooftops.
Net-Metering scheme can be taken as a major tool to motivate people towards solar installations. Mostly, distribution companies (DISCOMs) are vehemently opposed to net metering across states since it’s affecting it financially by depriving them of the opportunity to earn more revenue from premium consumers due to lower sales and ending up paying stranded power purchase costs. Also, it is affecting the subsidies balance – since generators’ fixed cost and infrastructure cost recovery are passed on to other consumers
Role of Net-Metering
The Ministry of Power (MoP) has issued No Net-Metering for Rooftop Solar Systems over 10 kW. In many states gross metering schemes are there for above 10kW Rooftop Solar Systems. States like Rajasthan are not allowing Net-Metering for Commercial and Industrial (C&I) Projects. This rule is making Solar rooftop unviable for C&I consumers. The target for solar rooftop panel installation is 40 GW up to 2022 and till now the installed rooftop capacity is 6 GW only, most of which was developed by C&I consumers. It seems that the government is trying to financially save DISCOM by limiting to 10 kW Net-Metering. However, this is the time to achieve the solar rooftop target to save the planet by achieving the “well below 2 degrees Celsius” target.
Under the Net-Metering Scheme, the rooftop solar power used for self-consumption and excess energy fed back to the grid is credited at a net feed-in tariff determined by the state that is still cumbersome. Also in many states, consumers have to get self-registered for Net Meter and the paperwork process is very confusing and lengthy.
In gross metering, the entire energy generated by the solar PV system is fed back directly into the utility grid and the owner gets incentives based on feed-in tariffs proportional to the energy fed back to the grid. The Utility Company will decide the tariff for both import and export of power. Generally, import retail tariff is used to be higher than the export feed-in tariff to cover the revenue lost by DISCOMs in Net Metering Scheme.
Gross-metered consumers were compensated for the export of solar power to the grid at rates of Rs 2-4 per kWh. However, current rooftop power purchase agreements signed by tier-1 developers have tariffs in the range of Rs 3.5-4 per kWh. This will increase the payback period for gross-metered consumers and also, they cannot self-consume the units generated by their own system. This is pushing back the C&I Consumers to install solar rooftop.
India has to think about some innovative path to achieve “well below 2 degrees Celsius” target by achieving solar rooftop installation target and also financial health of all consumers and DISCOMs.
Some recommendations to propel the rooftop solar market
Let there be no money transaction between DISCOM and solar rooftop user, in either direction. Even the monthly fixed charges should be abolished to encourage net metering consumers. No incentives of such kind (capital or tariff based) are provided to consumers so that the policy is open to everyone, without having any limit on number.
Instead of taking monthly fixed charges from consumers, the DISCOMS can charge a one time high connection fee. After that there will be no transaction between the consumer and DISCOMs remaining. Also, the getting net-metered connection should be easy and on demand.
The net metering connection should provide only on condition of being Net Positive Use (NPU) on a monthly basis. This implies the user has to install enough solar PV capacity on the roof to generate more than he consumes in a month and has to get NO bill to pay at the end of the month. Users will be happy that there is no monthly electricity bill, and in efforts to be net positive users, they will end up generating more units than they consume. These extra units will be free electricity for DISCOMS, which will help them financially.
In special cases, like marriage function at home, if a consumer needs electricity from the grid apart from its own generation then DISCOMs can charge a penalty for being net negative or at a rate higher than normal electricity rate like Rs. 15 to 20 per unit. This will be beneficial for DISCOMs to get some revenue. Also, consumers will try to use electricity in a constrained manner that will help in further decreasing its own carbon footprint.
DISCOMs are the integral parts of the power sector – and should also be the part of adopting solar rooftop installation and part of supply kitty. They should help people in installing a solar rooftop in a much easier way by making flexible paperwork.
DISCOMs can make some provisions for ground level education for the consumers to make
more efficient operation for Net-Metering Scheme.
Above is a very green scenario and dream scenario in our views. It is less likely to happen in real life, because climate change is only for activists, for policy makers and consumers only growth is most important.
We believe that there is a net problem in net metering. It seems that implementation and simplification of policies will take a lot of time – and will not be in pace with the rate at which climate is changing. The main reason for using solar energy should be to decrease the CO2 release and save our natural climate to ensure human survival without hardships.
Therefore, due to advancement of solar PV technology and cost reduction, we at Energy Swaraj Foundation believe that instead of net-metering, people should start surrendering their electricity connection and become ‘atmanirbhar’ on solar energy. An ‘atmanibhar’ individual is required for ‘Atmanibrhar’ Bharat.
Chetan Singh Solanki is a Professor at the Department of Energy Sci. and Engg., in Indian Institute of Technology, Bombay. He is also the founder of Energy Swaraj Foundation.
Nikita Lihinar is associated with the Energy Swaraj Foundation in the capacity of Vice President – Research & Policy and has a postgraduate degree in Economics.
Bhumika Parihar is associated with the Energy Swaraj Foundation as Technical Consultant and has a postgraduate degree in Electrical Engineering.