Current Scenario

Success of rooftop solar PV projects in India has attracted many to the Indian market. Entrepreneurs, NBFCs, investors and end users are interested in roof top solar PV market. However, current tariff structure and low benchmark cost of solar rooftop plants have prompted the need for new billing structure. Besides, the capacity limit of 1 MW and consumer centric business models creates low incentives for business houses to develop roof top solar power projects.

DISCOM resisting change

The DISCOM business has simple revenue model – cost plus method of tariff determination. But cost plus tariff are often very high for certain customers who instead of purchasing costly power from DISCOM opt for Independent Distributed Renewable Energy Sources (IDRES) with net metering. Under IDRES with net metering consumers generate power for their own consumption and sell the excess power generated to the DISCOM at feed-in tariff. In this way consumers are able to earn profit and DISCOMs lose out on business of selling power to its bulk consumers. This in turn decreases sales of company and thus results in opposition to net metering.

What is Net Billing?

Net billing has emerged as new model to tackle such challenges. In net billing the energy consumed from the grid is priced at retail tariff and excess energy injected in the grid is compensated at predetermined tariff. Salient features of net billing included interconnection point to be on licensee side. Facilitation of 2 uni-directional meters – one for measuring generation from Independent Distributed Renewable Energy System (IDRES) plant while other for measuring energy consumed from the grid. The DISCOM shall enter into power sale agreement with consumer to sale entire energy generated by DRE plant. Settlement will be according to Average power purchase cost (APPC) or commission determined tariff.

Arrangement in Indian States

Sample Case study of Net billing for consumer