Solar and net-metering regulations in Bihar

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It has been a while since the draft net-metering regulations came out in Bihar and has not yet been followed by the final guidelines. That’s not a good sign for the BJP government to project in the state especially with the new target of 100 GW set to be achieved through solar by 2022.

On speaking to an undisclosed source in BERC about when the final guidelines would be out, I was told that I should just keep a look out on the website. I quote the official “Abhi tak toh feedback nahi mila hai. Jab final ho jaayegi, website pe upload kardenge” (We have received no feedback from the government so far. Once the regulations are final, they will be uploaded on the website).

Before we go on to assess the utility of the metering policy, let’s re-visit the regulations in brief. What’s striking is that, Bihar does not have a gross metering policy so it’s not following the trend started by Andhra Pradesh and Uttar Pradesh (inspired by Gujarat). The net-metering regulations for Bihar has the same basics such as that for Maharashtra and Delhi. Following are the highlights:

  • Eligibility: Rooftop system size has to range from 1 Kwp- 1 Mwp capacity
  • Provision for net-metering would be provided on a first come first serve basis since
  • 15% transformer capacity can be made available for this purpose in every area
  • In the area of supply of the distribution licensee, not more than 10 MW can be made available under net-metering annually

Bihar has a demand of 2,700 MW in peak hours and the allocation currently is 2,500 MW (refer). Of this, the installed capacity is only approx. 2,100 MW bringing Bihar to a shortfall. Hence, the need for solar. However, the electricity tariff this year has been increased only marginally by 10-15 paisa per unit to meet the revenue gap of 2,540 crore the DISCOMs have projected for the year 2015-16 (refer). So, it can be comfortably said that DISCOMs have no incentive to encourage use of solar nor do end customers want to sway from paying higher tariffs for electricity.

For developers, there is definitely a push for setting up projects as per unit cost being offered by the government is INR 8.75, an attractive tariff. This could help resolve the power outages in Bihar (refer to page 20).

Now, looking at it from private EPC Company’s point of view. The solar tariffs for Bihar are as follows:

Commercial tariffs:

 

Commercial tariff-Bihar

Industrial tariff:

Industrial tariff-Bihar

Domestic tariff:

Domestic tariff-Bihar

Over this, tax would be levied causing per unit cost of highest slab to go at least up to INR 6.44. Installing a solar power plant on a PPA basis would cost an end customer only INR 6.5 per unit with the price escalating slower than per unit cost from thermal power plants leading to savings. And if an end customer buys it on CAPEX per unit cost is between INR 5.7- INR 7. This would probably be a win-win situation for projects for industrial and commercial customers. Looking to reduce your power costs in your factory in Bihar? Going solar might be a great option.

Here is a comparison between CAPEX Vs. PPA for 20 years for a 100 KW solar plant:

PPA vs. CAPEX graph

Finally, putting net-metering into context, you may not have to pay electricity bills at all if you compensate using net-metering. Of course, gross metering would have been better giving you an option to treat solar as a business (read this analysis on UP metering regulations). To also understand briefly the process of application, look at the process flow the UP article. We assume, Bihar would also follow the same process once the final guidelines are out.

Do let us know if you have more questions about solar in your state, we’ll try to cover it in the next article. You can e-mail your question to info@sunkalp.com.

Tanya Batra

Tanya keeps a close track of policy updates in the field of Rooftop Solar in India and likes to write blogs on its application for the end customer