Industry Hopes Penalizing DISCOMs for Net Metering Connection Delays Can Drive Growth

Residential rooftop solar developers welcomed the Ministry of Power’s (MoP) move to penalize distribution licensees (DISCOMs) for any delay in rooftop solar systems’ connection agreement.

Last month, the Ministry of Power came out with draft electricity rules 2020 to streamline the process of electricity supply to consumers by DISCOMs. As per the new regulations, DISCOMs need to sign the connection agreement, install the meter, and commission the rooftop system within 30 days from the date of submission of the installation certificate by the consumer.

Speaking on the new rules, Shekhar Thapliyal, Director of Solar Pulse Energy Private Limited, “The move will help the residential solar market. The new policy will help enhance the liquidity and capital infrastructure in the residential solar market as rooftop solar projects will be completed within a particular time frame.”

The ministry proposed that the distribution licensee would be accountable to pay compensation of ₹500 (~$ 6.77) per day for each day of default to the consumer in case of any delay in setting up solar systems.

“This is a positive step for rooftop solar developers as most of their payments are stuck because of the delay in the net metering process. The major delays in rooftop solar projects’ execution timelines are due to the delay in the net metering connection agreement. The new policy will help streamline the procedure of DISCOMs, which can help expand the residential solar market,” said Hitaksh Sachar, Director of Asun Solar Power Private Limited.

The ministry also suggested that the distribution licensee should create a consumer grievance redressal forum. The distribution licensee should address the grievances within 30 days, and it should not exceed 45 days from the date of its receipt registration. The consumers can approach the ‘ombudsman’ if the grievances are not resolved in a specific time. An ombudsman is a government nominated official who investigates complaints against financial institutions or government departments and tries to address the concerns by mediation or making recommendations.

“This is the need of the hour. This will force DISCOMs to train their human resources and to improve its standards to resolve the issues within a particular time frame,” added Thapliyal.

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.

Net metering has been the primary impediment for rooftop growth in the country. Even though the net metering policy exists in most states, implementation has been rocky. Many states hesitate to support rooftop solar, as DISCOMS do not want to sacrifice premium customers.

The net metering approval process has been a challenge in many states. In a market analysis in 2018, Mercom found that In Karnataka, Tamil Nadu, Maharashtra, and Gujarat, developers faced lengthy approval processes from three to six months.

The residential rooftop segment has immense scope for growth in the country, but the momentum is restrained due to the consumers’ lack of awareness. To make power consumers aware of the benefits and savings they can enjoy with rooftop systems, Mercom has introduced a special series to cover all facets of a rooftop installation. Check out the first and the second articles of the series, and stay tuned for the next.