Rooftop solar energy is fast accounting for a more significant percentage of our country’s energy mix. As more and more factories, institutions and posh residences adopt solar under net-metering, they are generating their own power but still using the utility maintained transmission. The more power generated by solar plants, the less units sold by DISCOMs and utilities. This transition is making states and DISCOMs anxious about loss of their highest paying consumers.
DISCOMs are fundamentally responsible to ensure that the grid is reliable by maintenance of transmission lines and components. However, as more consumers go solar, there is less revenue for the DISCOM. With less revenue, there is reduced incentive to invest in grid maintenance and up-gradation of infrastructure such as transformers.
Secondly, in terms of net installed capacity (conventional power), many states such as Haryana and Punjab are already power surplus. Increased availability of solar power will imply that many thermal power plants will now be running at less than optimal capacity making them increasingly un-viable. As we add substantial solar on the grid, the daily demand curve is starting to look very different and it will become more expensive to keep the rest of the grid running during the midday hours.
Because of these twin threats, some monopolist DISCOMs are working with state regulators to stunt the growth of renewable energy which is in effect a fast growing competitor.
An example of one such move is where Maharashtra announced that a tax, in the form of electricity duty, will be levied on solar units generated for self use.
However, levying duty on solar power is neither logical nor beneficial in a country that is growing the solar power sector as one of the largest employment generators. Thus, states with high penetration of rooftop solar may need to restructure how the grid is paid for in the near term.
We need to have a conversation about the fundamental role of the DISCOM and who should have ultimate responsibility for providing reliable electricity.