Policy for Net-Metering based Renewable Energy Applications, Madhya Pradesh, 2015- 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... 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 (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 Page 1 of 11
bidirectional meter. The consumer, after settlement of energy within the settlement period, shall pay for the net energy purchased by him from power utilities. 1.4 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 1 2015-16 10 2 2016-17 265 3 2017-18 275 4 2018-19 330 5 2019-20 385 6 2020-21 440 7 2021-22 495 1.5 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 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. Page 2 of 11
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, 2015. 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, subject to technical feasibility at Distribution Transformer / Sub- Station Level and fulfilment of laid down procedure under this policy. Page 3 of 11
3. DEFINITIONS (1) Eligible Consumer means a consumer of electricity in the area of supply of the Distribution Licensee who uses or intends to use a Renewable Energy based Power Project, installed on a roof-top or any other mounting structure in his premises, to meet all or part of his own electricity requirement, and includes a Consumer catering a common load such as a Housing Society: Provided that such generating System may be owned and/or operated by such Consumer, or a third party leasing such System to the Consumer. The Eligible Consumer as defined under MPERC Grid Connected Net Metering Regulations, 2014 shall prevail over the above definition. (2) Inter-connection Point means the interface of the Renewable Energy based Power Project with the outgoing terminals of the meter / Distribution Licensee s cutouts/ switchgear fixed in the premises of the Eligible Consumer: Provided that, in the case of an Eligible Consumer connected at the High Tension ( HT ) level, the inter-connection point shall mean the interface of the Renewable Energy based Power Project with the outgoing terminals of the Distribution Licensee s metering cubicle placed before such Consumer s apparatus. (3) Net Metering Arrangement means an arrangement under which a Renewable Energy based Power Project with Net Meter installed at an Eligible Consumer s premises delivers surplus electricity, if any, to the Distribution Licensee after setting off the quantum of electricity supplied by such Licensee during the applicable Billing Period ; (4) Net Metering Connection Agreement means an agreement entered into by a Distribution Licensee and an Eligible Consumer for executing a Net Metering arrangement; (5) Obligated Entity means an entity required to fulfill a Renewable Purchase Obligation ( RPO ) as specified by the Commission in Regulations governing such Obligation ( the RPO Regulations ); (6) Premises means and includes roof-tops or any areas on the land, building or infrastructure or part or combination thereof in respect of which a separate meter has been provided by the Distribution Licensee for the supply of electricity ; Page 4 of 11
(7) 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; 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 2.1 Electricity Act, 2003 has been in force since June 2003. 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 1999. MPERC has brought out draft notification for application of renewable energy resources (RES) as per net metering process vides notification no.g-39 of 2014. 2.3 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. 5.2. To provide further impetus to growth of clean technology in the state of Madhya Pradesh. 5.3. To improve tail-end grid voltages and reduction in system congestion with enhancing share of self - consumption of renewable energy based electricity. 5.4. To reduce carbon emissions. 5.5. To develop sustainable energy solution for future and energy security of the nation. 5.6. To encourage job creation in the downstream Renewable Energy market segment. Page 5 of 11
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. 6.2. APPLICABILITY OF THE POLICY:- All Renewable Energy based Power Projects adopting net-metering mechanism shall be covered under this policy. 6.3. ELIGIBILITY CRITERIA:- In order to promote utilization of Renewable energy, all categories of consumers, who use Renewable Energy based Power Projects (either self-owned or third party owned) installed in the consumer premises, to offset part or all of their own electrical requirements are considered as Eligible Consumers. 6.4. CAPACITY CAP:- 6.4.1. 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 70% of its rated capacity 6.4.2. The distribution licensee shall update on half-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. 6.4.3. 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 Page 6 of 11
6.5. REGISTRATION & PROCESSING PROCEDURE (For Eligible Consumer):- The eligible consumer is required to follow the following procedure for registration under this policy: - (online registration) Filling up and submitting online application form, alternatively download e-form fill up and upload the same at the online portal or submit it to MPUVN.(Format I) Necessary fee and documents, as prescribed in the Format-I, shall be uploaded with online application or shall be submitted with offline application, as the case may be. MPUVN will examine the application within seven working days and will forward to the concerned DISCOM. In case there are any discrepancies in the application or it is incomplete, MPUVN shall inform the customer and the period taken by the customer in completing the application would be excluded from the time available to MPUVN for forwarding the application to the DISCOM. Concerned officer of DISCOM shall visit the premises for checking technical feasibility of the proposed interconnection and conducting overall feasibility analysis within fourteen working days of receipt of application by the DISCOM Applications would be examined by the DISCOM, as regards the capacity available at distribution transformer level, strictly on first come first serve basis, taking the date of filing the application with the nodal agency as the relevant date. If installation is technically feasible, approval letter would be sent to the applicant with a copy to MPUVN. Decision would be taken by the DISCOM within 30 days of the receipt of the application by the DISCOM. If installation of renewable energy project is less than 10kW, intimation to CEIG shall be sent by MPUVN on behalf of project developer. The eligible consumer shall complete installation of the approved system within three months from the date of issue of approval letter by DISCOM. The DISCOM shall provide the commissioning certificate to the eligible consumer as well as to nodal office within 30 days of commissioning. The Distribution Licensee shall ensure that the inter-connection of the Renewable Energy based power projects with its Network conforms to the specifications, standards and other provisions specified in the CEA (Technical Standard for Connectivity of the Distributed Generation Resources) Regulations, 2013, the CEA Page 7 of 11
(Measures relating to Safety and Electric Supply), Regulations, 2010 and the Madhya Pradesh State Grid Code, or as may be specified in future. In case the eligible consumer fails to avail connectivity of the Renewable Energy based Power Project within three months, the registration is liable for cancellation. In such cases, the transformer capacity can be used by some other applicant consumer, again on first come first serve basis. 6.6. 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. 6.7. ENERGY ACCOUNTING AND COMMERCIAL ARRANGEMENTS:- Provisions for energy accounting and commercial arrangements will confirm to MPERC Grid Connected Net Metering Regulations, 2014 and subsequent amendments thereof. 6.8. 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 notified by the Central Electricity Authority (Measures relating to Safety and Electric Supply Regulations 2010 and subsequent amendments thereof). 6.9. METERING ARRANGEMENT:- Provisions for metering arrangements will confirm to MPERC Grid Connected Net Metering Regulations, 2014 and subsequent amendments thereof. The bi-directional (net) meter shall be installed at the interconnection point of the Eligible Consumer with the network of the distribution licensee for reading the import and export of power, and the bill will be issued by DISCOM on net of import and export of power. Page 8 of 11
Installation & Operation of Meters shall confirm to CEA (Installation & Operation of Meters) Regulation, 2006. Accuracy Class of Consumer Meter: Voltage Limit Up to 650 V Above 650 V and up to 33 kv Above 33 kv Precision of Meters 1.0 or better 0.5 S or better 0.2 S or better 6.10. NODAL AGENCY:- MPUVN Limited, New and Renewable Energy Department, Government of M.P. shall be the nodal agency for Renewable Energy based net metering Power Projects under this policy. 7. INCENTIVES :- Installation of Renewable Energy based Power Project under the policy shall be exempted from banking, wheeling, cross-subsidy and open access charges, subject to MPERC Net Metering Regulations, 2014 and amendments thereof. The energy generated from the system shall be exempted from electricity duty and cess, and the consumers would have to pay the same only for the net energy consumed from the grid. All Eligible Consumers can avail Central Financial Assistance from MNRE, as per the applicable scheme for Renewable Energy based Power Project. The nodal agency shall take necessary action for processing the request accordingly. 7.1. 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. 7.2. PROVISION REGARDING SURPLUS POWER:- Page 9 of 11
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 regulations of MPERC. 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. NET METERING INTER - CONNECTION AGREEMENT Net Metering connection agreement between distribution licensee and eligible consumer is attached at Format II. 10. RPO The quantum of electricity generated 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. In case the Eligible Consumer is an Obligated Entity, the quantum of electricity generated from the Renewable Energy based Power Projects under net metering arrangement, shall be counted towards meeting his RPO. 11. 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. 12. SHARING OF CDM BENEFITS Page 10 of 11
The CDM benefits arising from Renewable Energy based Power Project shall be retained by the consumer. However, arrangements will confirm to MPERC Grid Connected Net Metering Regulations, 2014 and subsequent amendments thereof. 13. ROLES & RESPONSIBILITY:- 13.1. Nodal Agency (MPUVN): 1) Receiving applications under Net Metering arrangement from Eligible Consumers & processing it to concerned DISCOM s. 2) In case Eligible Consumer wishes to avail central financial assistance, the nodal agency shall take necessary action for processing the request accordingly. 13.2. Distribution Licensee (DISCOM s): 1) Due Diligence of applications under Net Metering arrangement received from MPUVN as per the laid down procedure of this policy. 2) Visiting consumer premises for checking technical feasibility of the proposed interconnection with Distribution Tran and conducting overall feasibility analysis. 3) Issuing approval letter to Eligible Consumer for installation of Renewable Energy based Power Projects. 13.3. Eligible Consumer: 1) Filing of application in prescribed format for installation of project under Net Metering arrangement. 2) Installation of project within three months from the date of issue of approval letter by DISCOM. 14. 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 11 of 11