Power & Net Metering Policies

Net Metering is a concept that has got the potential to revolutionize the usage of Solar power in India in the coming days. It’s a proven technology and has helped in popularizing solar power from California to Germany. Government of India took note of it and the Central Electricity Regulatory Commission (the central policy think-tank of Downstream Power sector) issued a policy directive to all states in India to implement Net metering within the next 12 months of this policy directive issuance.

What it is

It’s a technology that lets electricity consumers to not only draw power from the Grid lines (owned by the private or state managed distribution companies) but also feed power back into it.

Net metering comes into play when Residential, Commercial or Industrial consumers install power generation units, such as rooftop solar power plants, within their premises. Some of the electricity generated by these power generating units get consumed instantaneously while the rest is fed to the Grid using the Net metering interface.

In case of a rooftop solar power plant, this becomes essential as electricity is only produced during the daytime, when the sun is out. Thus, all that electricity that the power consumer is not able to consume instantaneously in the daytime is fed into the Grid for night time use. On the contrary, without Net metering in place, a power consumer would only be able to install a solar power plant with enough capacity to power his/her daytime needs.

The other option is to have power plant that generates enough electricity for both day time and night time consumption and store the night time power in batteries. But then the batteries can be expensive and need to be replaced on regular intervals apart from incurring additional maintenance costs. Net metering thus essentially serves the purpose of a large battery at no additional investment or operational cost.

How it works

Consumers can install a rooftop solar power plant that generates enough electricity for both day time and night time consumption. All the electricity that they don’t or aren’t able to consumer during the daytime can be fed into the Grid. Later, when the sun in down, the consumer can draw the exact amount of electric power that was fed in the daytime free of cost.

A Net meter records both the amount of electricity that’s fed into the Grid as Import and the amount of electricity that’s consumed from the Grid as Export. Additionally, the Net meter will show the net consumption of electricity from the Grid as Import – Export. Power consumers are billed at end of a billing cycle for only the Net consumption.

Advantages for the Power Distribution Company

  • The Power distribution companies stand to gain the most from the technology. They get electric power free of cost from their own consumers during peak daytime hours. Later, they can save by giving back this power during non-peak nighttime hours
  • Electric power during peak daytime hours cost much as much as 14% more as compared to nonpeak nighttime hours in some of the industrialized states such as Maharashtra and Tamil Nadu. Net metered rooftop solar power plants can thus bring in bigger windfall profits for the Power distribution companies
  • Power Shortage is encountered mainly during peak daytime hours. Extra power from consumers during peak hours can help Power distribution companies to cover this peak hour shortage without making any new investment
  • India records an average of 22% to 27% transmission losses. Power from Net-metered power consumers sourced locally can lower this number to less than 2%. Reducing transmission loss simply means more money in the Power distribution company’s accounts
  • Net metering has been a success worldwide, e.g. California in US and Germany in Europe with no known disadvantage or challenge.

Advantages for the Power Consumer

  • The consumer can have a rooftop solar power plant with enough capacity to power both daytime and nighttime consumption and benefit more from the cheaper and greener solar power
  • This technology saves the consumer the battery back-up cost completely. On the hindsight, the consumer gets to substitute the Grid as a battery-back-up where extra power is stored and metered for future use
  • The consumer gets to save also on the maintenance and replacement cost. This is substantial as other than batteries all other components of a rooftop solar power plant have really long usage lives and require very less maintenance (in fact allow real time remote monitoring at very low costs)
  • The overall system efficiency is improved. Batteries eat up some of the power stored and don’t give back all that’s stored in them. Net-metering, on the other hand, lets a consumer get back the exact amount to power that was fed into the Grid in the daytime

Net Metering configuration approved by Central Electricity Regulatory Commission of India