New metering norm hits solar firms

Marred with challenges, smaller solar EPC players raise concern on sustainability

New Delhi: The recent decision of the central government to impose gross metering norm on the solar power installations with capacity of 10kW and above has taken a heavy toll on solar power sector with some small companies saying that the new norm will push them out of business.

According to industry insiders, the central government has restricted net metering up to 10kW and gross metering to higher capacities. While the feed-in-tariff for net metering comes to an average of Rs 8/kWh, tariff for gross metering system comes at Rs 3 per kWh.

"Because of the Covid-19 situation, our output fell to about 30 per cent to 40 per cent since we were not working from March end till May. From June onwards we resumed our operations on the existing orders. It is only September onwards that we started receiving new orders. Then came the government's decision," Aviral Bhatla, Director of Delhi-based solar company GeoSolar, told Bizz Buzz.

The Ministry of Power has issued The Electricity (Rights of Consumers) Rules, 2020 laying down the rights of power consumers to minimum standards of quality. One of the provisions of these rules mandates net metering for loads up to 10 kW and gross metering for loads greater than 10 kW.

GeoSolar, which primarily caters to the Rooftop Solar market in Delhi, NCR region, is also operating in MSME sector with approximately 500kW installations so far in the area.

"The government's latest decision on restricting net metering is crippling. For smaller companies, this is a devastating move. Solar Sector will die down in the next two years and the MSME operations will be left with only big players," Bhatla lamented.

Factories above 10kW will no longer enjoy net metering connection. The ROI, or Return on Investment, the period in which it takes to recover the money for a factory, will double. The government should rethink its decision on this order, he added.

Many Solar EPC companies believe that the new gross-metering norm is to profit the bigger companies, since smaller solar entities will have to shift towards residential sector.

"The government is only enabling bigger companies while EPC companies like ours are finding hard to survive in the MSME sector. Post 2018, the central government hasn't initiated any new policies or scheme to ensure survival of smaller players. At present we have 30 engineers and over 300 on-field employees. If the current trend continues so, I might have to shift my operations, work-staff towards other solar sectors," Harish SM, founder of Seundo Energy, a Karnataka-based Solar company, said.