Surplus Solar Power Generated by MSMEs in Gujarat to be Compensated at ₹2.25kWh

The Gujarat Electricity Regulatory Commission (GERC) partly allowed a petition seeking amendments in the tariff framework to procure solar power by distribution licensees (DISCOMs) and others. It passed a series of orders concerning energy accounting, rate of surplus energy receivable by micro, small, and medium enterprises (MSMEs), among others.

The petition filed by the Gujarat Urja Vikas Nigam (GUVNL) had requested appropriate amendments in the GERC (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations, 2016.

The GERC has approved the following amendments to be incorporated.

As proposed in its industrial policy announced in August 2020, for solar projects set up by MSMEs with above 50% of its contracted demand, the power cycle for calculating the consumption has been increased from a 15-minute time-block to 7 AM-6 PM. This means the consumers will be allowed time from 7 AM and 6 PM to consume the energy generated from the solar project, and the rest is banked. Earlier, with the 15-minute block energy accounting, the power that was not consumed during the 15-minute block had to be banked.

DISCOMs would purchase any surplus solar energy not consumed by the consumer as per energy accounting at ₹2.25 (~$0.031)/kWh instead of ₹1.75 (~$0.024)/kWh.

The Commission also approved a switchover option for MSME projects approved before September 2019 to the mechanism mentioned in the September 2020 order.

Gujarat has been making several amendments to encourage MSMEs to go solar. In 2019, the government had relaxed the state’s solar policy to allow MSMEs to install solar projects that are more than 100% of their sanctioned load or contract demand. Later it allowed the third-party sale of open access power by MSMEs by paying 100% of cross-subsidy surcharge and additional surcharge applicable to normal open access consumers.

MSMEs are a huge potential market for rooftop and open access solar but are largely untapped. Mercom has earlier reported that the lack of a required grade of credit rating has kept this market underserved by financiers. The attractive price offered for the surplus power generated, and relaxed energy accounting hopefully will drive the growth of solar adoption by this segment.