The West Bengal Electricity Regulatory Commission (WBERC) has rejected an industrial consumer’s petition seeking net metering approval for its grid-connected rooftop solar projects under the renewable energy service company (RESCO) model.
Brathwaite & Company Limited (BCL), a Government of India-owned engineering firm involved in manufacturing rail wagons, has installed a total of 3.7 MW of grid-connected rooftop solar systems at its manufacturing units. It installed 2.5 MW capacity at Angus Works, 900 kW at Clive Works, and 300 kW at Victoria works.
The company approached Solar Energy Corporation of India to identify a vendor for installing rooftop solar systems under the RESCO model. Both parties had to sign a 25-year power purchase agreement at a tariff finalized by SECI, with the excess power fed to the grid through a net metering system.
In August 2020, BCL requested CESC Limited (the distribution company) to approve net metering for its rooftop solar systems.
However, CESC Limited rejected the request for net metering. As per the Electricity Act, 2003, BCL’s rooftop solar systems do not qualify as captive generating units. They are not set up and owned by separate entities under the RESCO model.
BCL appealed to the Commission to declare their RESCO units at three separate locations within the licensed area of CESC as captive generating units so CESC could provide the net metering facility.
In its order dated March 19, 2021, the company said the Commission allowed consumers to complete the installation of their rooftop solar systems and notify the distribution licensee by June 30, 2021, to be eligible for net metering facilities. However, the Commission has not disqualified or excluded the rooftop solar systems with the RESCO model from net metering benefits.
CESC Limited’s response
In its response, the distribution company informed that BCL would not benefit from the Commission’s order dated March 19, 2021, because its rooftop solar systems are installed under the RESCO model, which is barred under the Regulations.
As per the Renewables Regulation’s First Amendment, CESC said net metering is allowed for agricultural consumers and other eligible consumers with a sanctioned load up to 5 kW. Gross metering would be applicable for a sanctioned load above 5 kW. However, BCL’s rooftop solar capacity is far above 5 kW and would not be eligible for net metering.
CESC contended that the RESCO model is not recognized under the Principle Renewable Regulation, 2013, or the First Amendment to WBERC Regulations. As per WBERC Regulations, rooftop solar under the net metering arrangement is allowed for self-owned systems only.
The Commission observed that BCL owns over 26% of the equity of the rooftop solar systems, and its annual consumption of the power to be generated would be over 50%. The company would become an owner of the rooftop projects after the expiry of the service period.
The Commission also noted that BCL could not prove that the company is a generating unit. Therefore, the company is a consumer of CESC Limited.
The Electricity Act, 2003, does not provide any net metering facility, whereas WBERC Regulations contain a net metering facility for which specific criteria are required to be satisfied for eligibility.
The Commission noted that BCL claimed to be a generator to attract the regulator’s jurisdiction. However, the company also claimed to be a consumer to be eligible for net metering benefits. The contentions made by BCL were conflicting and failed to establish that it could claim net metering under any regulations. Therefore, the company is not eligible for net metering.
In June 2021, the Ministry of Power amended the Electricity 2020 Rules to permit net metering to the prosumers for loads up to 500 kW or up to the sanctioned load, whichever is lower.
Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.