Railways’ Plea to Let Azure Install Rooftop Solar Under RESCO Mode in Gujarat Rejected

The Gujarat Electricity Regulatory Commission (GERC) has dismissed an appeal filed by the Indian Railways, which had requested relaxing the state’s net metering provisions.

The petition was filed by the Western Railways against the Gujarat State Electricity Corporation Limited (GSECL), asking for not capping the net metering facility at 1 MW and allow installation of the rooftop system up to 100% of the connected load. Further, permission to install 14 MW of rooftop solar under RESCO mode in its premises by private solar developer Azure Power was also sought.

Background

After the announcement of the Budget 2015, the Indian Railways embarked on a solar mission to install solar projects on the rooftops of railway buildings and platform shelters to meet its obligation to implement 100 MW of rooftop solar projects.


In September 2016, the Railway Energy Management Company Limited (REMCL), a joint venture of the Indian Railways and Rail India Technical and Economic Services Limited (RITES), issued a tender for the installation of 100 MW of rooftop solar systems for the Indian Railways.

In March 2017, a Letter of Award (LoA) was issued to Azure Power for installing 46 MW of rooftop solar for the Indian Railways at various zones—North Central Railways, North Railways, Western Railways, North Western Railways, and Rail Coach Factory. The Railways proposes to install 14 MW of rooftop solar under the RESCO model, and of this, about 7.5 MW is to be installed in Gujarat.

Also, a PPA was signed with Azure Power Forty Four Pvt. Ltd. for 8 MW of capacity under the RESCO model.

According to the petition, the developer, Azure Power, has not been able to install the rooftop solar systems at the Railways as it is facing problems in getting clearance from the state government. This is because the Solar Policy of Gujarat, 2015, permits net metering for rooftop solar systems that are self-owned and not under the RESCO model. According to the policy, private developers are not allowed the installation of rooftop solar systems under the RESCO model.

After repeated requests to remove this restriction, the Western Railways sent a letter stating that due to Gujarat’s non-cooperation in giving the clearance for net metering, Railways could not keep its commitment given in Parliament under the National Solar Mission. The petitioner also informed the state government that such clearances for net metering, which involved solar developers, had already been given by various states like Maharashtra, Madhya Pradesh, and Rajasthan.

Across the nation and even internationally, grid-connected small solar systems are established under two broad frameworks – Ownership Model in which the system is established by the person who owns the premises and rooftop and Third-Party Model in which the solar system is established by third-party that leases the premises. From the operational standpoint, there is no distinction between the two models, the petition underlined.

The provisions of net metering regulations are required to be interpreted, keeping in view the object and purpose, which is to promote the generation of electricity from renewable sources by providing incentives for such power. Grid-interactive rooftop and small solar systems are recognized under the net metering regulations as an important avenue for the promotion of renewable sources of energy. The regulations do not make any distinction between the ownership model and the third-party model. Stating this argument, the Railways added that the regulation should be interpreted considering the objective and purpose of renewable generation.

After reviewing the petition, the Commission said that while other states such as Maharashtra, Madhya Pradesh, have allowed them to go ahead with the project under RESCO model, it should be noted that each state has its own set of regulations and these are notified keeping in view the larger interest of the consumers. These states may have approved the petitioner’s request in line with their regulations, and that approval cannot be quoted as a precedent for seeking approval in another state, where the policies do not permit the RESCO model.

In its order, the state Commission noted that net metering regulations aim to encourage small capacity consumers to set up rooftop solar systems up to 1 MW. As per the submissions of the petitioner and the respondents, they have not arrived at any conclusion on the implementation of their program for which the modalities have been defined. The program proposed has different conditions that do not align with net metering regulations of the state, and therefore it cannot relax or revise the provisions to accommodate their proposal. Further, the net metering regulation does not include the RESCO model, so the Commission cannot allow any relaxation to the petitioner.

The Commission did not find merit in the petition and stating this; the plea was dismissed.

In similar cases recently, Southern Railways was successful in gaining low-tension and high-tension metering connectivity for 4 MW of rooftop solar projects in Tamil Nadu. In Tamil Nadu, high-tension power consumers are not given a net metering facility, but for this project of Railways, an exception was made. Noida Metro Rail Corporation Limited (NMRC) was also allowed to install 10 MW of rooftop solar power projects with a net metering facility in Uttar Pradesh, though the state has a 1 MW ceiling for the net metering facility.

In Gujarat, consumers are not allowed to choose a third party owned installation. This makes things difficult not only for consumers who want a rooftop system and cannot invest their capital but also for rooftop independent power producers (IPP). Almost all states provide for the third party owned or an OPEX based rooftop solar projects in their policy.

Net metering in India has been one of the primary facilitators and also the greatest challenge of the rooftop solar market. Mercom has constantly been reporting on how the net metering implementation has been rocky on the ground. Depending on the state, net metering policies can restrict the development of rooftop solar based on system size, connection type, metering type, developer model (OPEX/CAPEX), and approval time and procedure.

 

Image credit: Jakson Solar