Policy for Net-Metering based Renewable Energy Applications, Madhya Pradesh, DRAFT

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1 Policy for Net-Metering based Renewable Energy Applications, Madhya Pradesh, DRAFT 1. PREAMBLE 1.1 To harness the potential of renewable energy resources in the state, Government of Madhya Pradesh is in the process of finalising the policy for net metering based renewable energy applications. In light of technological advantages unfolding in the sector and achievements made by renewable energy based power projects, a green source of energy in being considered as one of the alternative to augment the current sources of generation. Solar being the most favourable and suitable technology for decentralized and distributed generation, it may be one of the most popular options for harnessing Net-Metering based Renewable Energy Applications. 1.2 The state of Madhya Pradesh is endowed with high solar radiation with around 300 clear, sunny days. The state offers good sites which have a potential of more than 5.5 kwh/m 2 /day. The Madhya Pradesh Solar Policy, 2012 has provided a major thrust to the installation of grid-connected solar projects in the state. Further Clause 5(b), section I of the policy brings out its intention to promote decentralised solar energy generation. Jawaharlal Nehru National Solar Mission (JNNSM) has identified rooftop solar PV as one of the categories of solar projects. The Mission will encourage rooftop solar PV &other small solar power plants, connected to LV/11 KV grid, to replace conventional power and diesel-based generators.... Recent smart city guidelines also call for at least 10% of smart city s energy requirement coming from solar. In Madhya Pradesh, 5 cities have been identified to be converted as smart cities. 1.3 The solar power policies followed in the country have registered a great success in attracting investment in this sector. Bankability of Solar Photo Voltaic (SPV) projects and trained manpower within the country has also increased substantially. Private sector has shown huge interest in the sector. As a consequence, the system costs have plummeted downwards year by year. This has created a highly competitive atmosphere. SPV installations have vast potential for use at decentralised load locations. SPV small power plants can be installed on roofs or within the premises of consumers. The power generated could be primarily used by consumers for own use. The power generated, over and above the consumer s requirement, could be feasibly injected into low tension Page 1 of 9

2 (LT) electricity network. The energy thus exported could be adjusted against the energy purchased by the consumer from electricity utilities by way of installation of bidirectional meter. The consumer, after settlement of energy within the settlement period, shall pay for the net energy purchased by him from power utilities Central Government has proposed capacity addition of 40,000 MWp among all the states by 2022.MP share of 2,200 MWp is 7th highest among all the states. Year Wise target for Grid Connected Solar Rooftop system set by MNRE: S.No. Year Targets in MW In order to have broader community participation, New and Renewable Energy Department, Government of M.P. is in process of notifying the Policy for Net- Metering based Renewable Energy application, 2015.This policy has been structured so as to promote consumption of energy generated from renewable energy resources by individual users at decentralized locations, primarily to decrease the burden on conventional sources of energy (From generation to delivery, India incurs one of the highest electricity losses globally). For India to achieve its energy security and energy access goals it needs to plug these losses. Policy for Net- Metering based Renewable Energy applications, 2015 would serve to reduce the T & D losses, which are a bane for the DISCOMs. It is also envisaged, through this policy, to help the community realize the importance of judicious use of electricity and involve them in the process of reducing dependence on conventionally produced electricity. What is Net- Metering? Net metering is the process through which a Renewable Energy based Power Plant is installed on the roof, open space, walls, etc. (within the legal premises) of the building to generate electricity. Generated power is first used in the building for captive Page 2 of 9

3 requirement and the surplus power is fed to the grid of DISCOM. In case power requirement of the building is more than the power being generated, then extra power requirement is drawn from the grid. For Example: Case-I In case generation of power from Renewable Energy based Power Project equals the power requirement of the Net metering consumer, there is no export or import of power from the grid. Hence, net billing units for this type of consumers will be zero. Case-II In case generation of power from Renewable Energy based Power Project is greater than the power requirement of the Net metering consumer, additional power generated can be supplied to the grid and settled against future surplus or as per regulation within the settlement period. Case-III In case generation of power from Renewable Energy based Power Project is less than the power requirement of the Net metering consumer, additional power required can be imported from the grid and settled accordingly. 2. SCOPE AND APPLICABILITY OF NET METERING POLICY This Policy may be called the Policy for Net-Metering based Renewable Energy Applications, Madhya Pradesh, This Policy shall extend to the whole of the State of Madhya Pradesh. This Policy shall come into force from the date of their publication in the Official Gazette and shall be applicable for Rooftop and Ground mounted Renewable Energy based Power Project installations in the State of Madhya Pradesh. The Net- Metering facility shall also be applicable to such Eligible Consumers who have installed Renewable Energy based Power Project before notification of this policy, Page 3 of 9

4 subject to technical feasibility at Distribution Transformer / Sub- Station Level and fulfilment of laid down procedure under this policy. 3. DEFINITIONS (1) Eligible Consumer means a consumer of electricity in the area of supply of the Distribution Licensee, who uses a renewable energy system installed in the Consurmer s Premises to offset part or all of the consumer's own electrical requirements, given that such systems can be self-owned or third party owned; (2) Inter-connection Point means the interface of renewable energy generation facility system with the network of distribution licensee; (3) Renewable Energy based Power Project means the system to generate electricity from such source(s) which are recognized as renewable energy source(s) by the Ministry of New and Renewable Energy (MNRE) or any other agency as may be notified by the Government / Commission; (4) Generation Meter means a meter used for accounting of electricity generated from Renewable Energy based Power Project ; (5) Net Metering Arrangement means an arrangement under which renewable energy system installed at eligible consumer s premises delivers surplus electricity, if any, to the Distribution Licensee after off-setting the electricity supplied by the Distribution Licensee during the applicable billing period; (6) Obligated Entity means the entity mandated under clause (e) of subsection (1) of section 86 of the Act to fulfill the renewable purchase obligation and which is identified under Regulations; (7) Premises means any land, building or structure or part thereof or combination thereof for which a separate meter or metering arrangements has been made by the licensee for measurement of net supply of electricity; Words and expressions used in these Policy which are not specifically defined herein but are defined in the Electricity Act 2003 shall have the meaning assigned to them in the said Act; and, if not defined in the Act, shall have the meaning assigned to them in any Act of Parliament or the State Legislature applicable to the electricity industry. 4. REGULATORY FRAMEWORK Page 4 of 9

5 2.1 Electricity Act, 2003 has been in force since June In accordance with the provisions of this act, any Government/ Private individual or agency is free to set up a power generation plant. 2.2 Madhya Pradesh Electricity Regulatory Commission (MPERC) is functioning since MPERC has brought out notification for application of renewable energy resources (RES) as per net metering process vide notification no.g-39 of In case of any discrepancy between the provisions of this policy and the Act or orders or regulations of the Commission, presently or in future, the provisions of the Act and orders/regulations of the Commission shall prevail. 5. OBJECTIVES OF THE POLICY 5.1. To encourage broader community involvement and growth of decentralized Renewable Energy based Power Projects To provide further impetus to growth of clean technology in the state of Madhya Pradesh To improve tail-end grid voltages and reduction in system congestion with enhancing share of self - consumption of renewable energy based electricity To reduce carbon emissions To develop sustainable energy solution for future and energy security of the nation To encourage job creation in the downstream Renewable Energy market segment. 6. GUIDING PRINCIPLES OF THE POLICY 6.1. OPERATIVE PERIOD:- The policy shall become applicable from the date of its notification in the Madhya Pradesh State Gazette APPLICABILITY OF THE POLICY:- All Renewable Energy based Power Projects adopting net-metering mechanism shall be covered under this policy ELIGIBILITY CRITERIA:- In order to promote utilization of Renewable energy, all categories of consumers, who are consumer of electricity in the area of supply of the Distribution Licensee, who uses a renewable energy system installed in the consumer's premises to offset part or all of Page 5 of 9

6 the consumer's own electrical requirements, given that such systems can be self-owned or third party owned are considered as Eligible Consumers CAPACITY CAP: Capacity Limit at Distribution Transformer: The cumulative capacity of all Renewable Energy based Power Projects under Net Metering Arrangements connected to a particular Distribution Transformer of the Licensee shall not exceed 15% of its peak capacity The distribution licensee shall update on yearly basis the capacity available at distribution transformer level for connecting renewable energy systems under Net Metering arrangement and shall provide information regarding the same on its website Capacity Limit for Individual Installation: The Renewable Energy based Power Projects have to be connected at the supply voltage level, which is determined on the basis of the maximum contract demand of the customer under the MP Electricity Supply Code as outlined below: Maximum Contract Demand Supply Voltage 3 kw 230 V 150 HP (112 kw) 400 V 300 kva 11 kv 10,000 kva 33 kv 6.5. TECHNOLOGY:- Renewable Energy based Power projects, with or without storage, conforming to the technical specifications specified by MPERC/MNRE/CEA, will be eligible for incentives available under this policy. Provided that, if an Eligible Consumer opts for connectivity with a battery back-up, the inverter shall have a separate back-up wiring to prevent the battery/ decentralized generation (DG) power from flowing into the grid in the absence of grid supply, and that an automatic as well as manual isolation switch shall also be provided ENERGY ACCOUNTING AND COMMERCIAL ARRANGEMENTS:- Page 6 of 9

7 Provisions for energy accounting and commercial arrangements will confirm to MPERC Grid Connected Net Metering Regulations, 2015 and subsequent amendments thereof INTERCONNECTION NORMS:- The interconnection of the renewable energy system with the network of the Distribution licensee shall be made as per the technical standards for connectivity of distributed generated resources Regulations to be notified by the Central Electricity Authority. Until such time, the interconnection of the renewable energy system of a particular capacity, with the network of the Distribution licensee, shall be made on the contracted load and/or respective voltage level applicable to the consumer as per the provisions of Madhya Pradesh Electricity Supply Code, METERING ARRANGEMENT:- Provisions for metering arrangements will confirm to MPERC Grid Connected Net Metering Regulations, 2015 and subsequent amendments thereof. 7. INCENTIVES :- Installation of Renewable Energy based Power Project under the policy shall be exempted from banking, wheeling and cross-subsidy, subject to MPERC Net Metering Regulations, 2015 and amendments thereof. All Eligible Consumers can avail Central Financial Assistance from MNRE, as per the applicable scheme for Renewable Energy based Power Project. MPUVN shall take necessary action for processing the request accordingly TAX EXEMPTIONS:- Installation of Renewable Energy based Power Project under the policy shall not be treated as construction and there shall be no additional liability of property tax for installation of Renewable Energy based Power Projects on their rooftops or premises. The equipment purchased for installation of Renewable Energy based Power Project under this policy shall be exempted from VAT and entry tax, as per the exemption granted to these systems under Madhya Pradesh VAT (Amendment) Act 2009 and subsequent amendments thereof. Page 7 of 9

8 7.2. PROVISION REGARDING SURPLUS POWER:- If there is surplus power generated after fulfilling captive consumption requirements at the end of the settlement period, the surplus power shall be compensated as per MPERC Net Metering Regulations, 2015 and amendments thereof. 8. EMPANELMENT OF TECHNOLOGY FACILITATORS / DEVELOPERS / AGENCIES For standardization of quality and to enable easy installation of Renewable Energy based Power Projects, MPUVN would empanel technology facilitators/ developers/ agencies for implementing Renewable Energy based Power Project, along with standards for installation, inverter standards, solar module standards, safety standards, rates, etc., after thorough due diligence of documents through separate Expression of Interest. MPUVN shall invite proposals for empanelment from time to time, normally twice in a year. Interested parties can apply, along with necessary documents, for being added to the empanelled list as technology providers. 9. RPO The quantum of electricity consumed from the Renewable Energy based Power Projects under net metering arrangement by an Eligible Consumer, who is not defined as Obligated Entity, shall qualify towards compliance of Renewable Purchase Obligation (RPO) for the distribution licensee in whose area of supply the Eligible Consumer is located. The quantity of electricity generated by a consumer would be ascertained through the renewable energy meter (Generation meter) installed at the consumer s premises at his own cost. 10. Many Banks have policies to include cost of Renewable Energy installations in the loan for houses; there is no need of hypothecation beyond the asset created under the loan. Such loans are also eligible for relief under IT act. MPUVN shall give all necessary support in sanctioning such loans from banks. 11. ROLES & RESPONSIBILITY: Nodal Agency (MPUVN): 1) In case Eligible Consumer wishes to avail central financial assistance, the nodal agency shall take necessary action for processing the request accordingly. Page 8 of 9

9 11.2. Distribution Licensee (DISCOM s): 1) Due Diligence of applications under Net Metering arrangement received from Eligible Consumer as per the laid down procedure of this policy. 2) Issuing approval letter to Eligible Consumer for installation of Renewable Energy based Power Projects. 3) Finalising the agreement and providing connectivity to the consumer Eligible Consumer: 1) Filing of application in prescribed format for connection of project under Net Metering arrangement. The administrative officer may issue clarification & interpretation on the provisions of the policy and also will be authorized to modify the policy based on provisions of the MPERC Grid Connected Net Metering Regulations or guidelines issued by Central Government and State Government. Page 9 of 9

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