"Raising the Net Metering cap from 10 KWp to 500 KWp - a welcome move"

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Posted: May 14, 2021,

The central Ministry of Power finally yielded to the pressure from the solar industry participants & has decided to amend the “draconian” measure of capping the Net Metering system of 10 KWp. The amendment will raise the cap to 500 KWp. The request for comments closed on 30th April & the change will come into effect after the paperwork formalities are completed.

This is a significant victory that has been achieved thanks to rooftop solar industry associations and industry media houses publicizing the preposterous nature of the 10 KWp limit that was proposed in September 2020. We have previously covered this topics in this post.

The 500 KWp limit is more than sufficient for most of Small Medium Enterprises, so this limit will not major affect the order flow for the solar project developers.

Wait, there’s more: The new regulation also mentions that projects over 500 KWp are to be done as “Net billing”. These are more profitable than Gross Metering models. So larger projects also stand to gain from these amended rules.

Thought bubble: If the original underlying motive of the central government behind drafting the 10 KWp limit was to protect the DISCOMS from losing revenues from Commercial & Industrial customers, that objective can be still met by adding a transmission fee per unit. This is currently being done for the ground mounted solar segment and assuming that the fees is minimal, the switching C&I customers should be able to bear this additional cost.