Formulation of Net Metering Policy for Odisha to boost rooftop Solar Projects
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The document is a detailed report on formulating a net metering policy for Odisha to promote rooftop solar projects, addressing the current challenges and opportunities in distributed generation. It compares net metering with feed-in tariffs and argues that net metering is more suitable for Odisha to encourage investment in renewable energy while reducing dependencies on fossil fuels. The report outlines various policy recommendations and business models aimed at enhancing the state's energy sustainability and security.
Formulation of Net Metering Policy for Odisha to boost rooftop Solar Projects
- 1. An extract of detailed report Formulation of Net metering policy for Odisha to boost rooftop Solar Projects An Initiative by Canyon Consultancy Pvt. Ltd. Canyon Consultancy Pvt. Ltd 2355, Near Indira Maidan, CRP Square, Nayapalli, Bhubaneswar, PIN – 751012 http://canyonconsultancy.com/
- 2. Contents EXECUTIVE SUMMARY............................................................................................................................2 The Policy Options and Net Metering Success stories............................................................................3 Net Metering VS Feed in Tariff for Solar projects...............................................................................4 a) Net Metering...............................................................................................................................4 b) Feed In Tariff...............................................................................................................................5 c) Why Odisha needs NEM policy instead of FIT ............................................................................6 Analysis of Net Metering regulations of Forum of Regulators ...........................................................8 Study of Indian Net meter policies .....................................................................................................9 Net Metering business Models...........................................................................................................9 (a) Self-owned (The rooftop owner owns the photovoltaic system).....................................11 (b) Third party ownership (The developer owns the PV system and enters into a commercial arrangement with the rooftop owner) .........................................................................................11 Net metering for Odisha: Limitations and Possibilities.........................................................................13 CASE STUDY: Techno-Commercial analysis of 2.5Kwp grid connected rooftop system in Bhubaneswar, Odisha.......................................................................................................................14 Grid Stability......................................................................................................................................16 Taxes, duties and surcharges............................................................................................................16 Resource assessment of DISCOMs....................................................................................................17 Drafting of NEM policy for Odisha....................................................................................................17 Conclusion.............................................................................................................................................20
- 3. EXECUTIVE SUMMARY The motivational factor behind this paper originated out of curiosity about renewable energy development in my state of Odisha. The state is witnessing a nascent stage of distributed generation growth and there exists a policy paralysis hampering further adaptability of small scale distributed generation; primarily solar RTPV. The research paper focuses on rooftop solar PV but enough care has been taken, so that the consultations and policy recommendations in the end will cater to all distributed generation technologies. The high cost of Solar PV systems is one of the key factors preventing wide scale adoption of rooftop PV projects. State governments as well as MNRE frequently analyze and roll out policy incentives to bring down both short term and long term costs of installing RTPV systems. India is currently witnessing acute energy deficit while subsidized hydrocarbons put further stress on the fiscal spending thereby weakening the economy and increasing the vulnerability to Oil shocks. Thus it is the need of the hour to facilitate small scale distributed generation technologies like rooftop Solar PV through suitable policy instruments. The current debate on the efficacy of NEM and FIT in USA motivated us to assess the importance and urgency of any of the aforesaid policies in Odisha. The forum of Regulators has also published model NEM guidelines which will be analyzed and considered while formulating NEM policy for Odisha. While most of the renewable power deployment policies aim to increase the installed capacity of renewable energy technologies and the generation of renewable electricity, the policies can target various other objectives as well like Technology cost reductions More sustainable and secure energy system Enhanced public awareness and social acceptance of renewable energy Job creation Sustainable level of domestic production and market share of renewable energy technologies This research paper will try to address all these opportunities in order to develop the roadmap for creation of draft net metering policy for the state of Odisha.
- 4. The Policy Options and Net Metering Success stories
- 5. Net Metering VS Feed in Tariff for Solar projects a) Net Metering NEM is a policy approach where a distributed electricity generator gets an opportunity to sell the surplus energy at its premises after self-consumption. NEM facilitates consumers with grid connected DG to “bank” generation not used immediately, in exchange for Kilowatt-hour (Kwh) and/or financial credits. Those consumers can subsequently draw on their credits at other times to offset consumption and/or charges when the DG system is not meeting their full load , up to the total amount that has been banked within the applicable period.(often 6 or 12 months) The distributed generation system can be allowed to generate electricity through any technological means e.g. bio mass plant, solar RTPV, wind or hybrid systems but the technology should be able to handle implications arose by connecting it to the grid. A special bidirectional meter has to be installed which can measure the import and export data in order to facilitate for calculating consumer’s net import or export. A DISCOM can provide a simple contractual agreement with the NEM consumer so that the implications and responsibilities of both parties can be mutually agreed upon. NEM has been viewed as one of the most successful tools in the USA for the growth of Solar RTPV installations. It has helped both the economy as well as environment by creating jobs, investment opportunities and mitigating substantial amount of carbon emissions. A remarkable number of countries have benefitted from NEM policy and have been able to achieve higher scale of energy independence or security while mitigating carbon emissions. Another fascinating aspect of NEM is “Virtual Net Metering”. Virtual net metering allows multiple home owners to participate in the same metering system and share the output from a single DG facility that is not physically connected to their property (or meter). This scheme goes a step beyond net metering and allows individuals to sell excess energy produced by their onsite Solar system back to the utility grid and receive credits on their electric bill. This will go a long way in carving the Solar story for the state of Odisha. The major benefit of virtual net metering is the opportunity for different individuals to invest and share the risks on the RTPV project. It will encourage communities and colonies to invest together in wasteland and spare rooftop spaces and make use of it to offset their individual electricity bills. For multi storied apartments, it will give opportunity for individual residents of the apartment to make use of the common rooftop space.
- 6. The following schematic shows a basic NEM architecture NEM architecture1 The above arrangement acts as a platform where the consumer can treat the grid as a virtual energy banking facility. This reduces the need for storage solutions but in case of grid failure the Solar RTPV system has to shut down in order to avoid flow of energy to the grid under maintenance. NEM arrangement helps in increasing the CUF (Capacity utilization Factor) of the system as a whole by allowing it to produce as much as it can and export the surplus to the active grid. The major considerations for NEM arrangement are as per below 1. Which consumers of DG are eligible for NEM 2. The size of an individual system eligible for NEM 3. The treatment of net excess generation (whether to be credited to the consumer’s next bill or purchased by utility monthly at retail rate etc.) 4. The process and requirements for interconnection 5. Program size limitations 6. Compensation or commercial settlement 7. Aggregate capacity b) Feed In Tariff FIT is one more policy mechanism to encourage RTPV Solar installations and has been used by a number of countries. Although FIT is used to a limited extent in USA, it is more common worldwide. This arrangement typically guarantees that the consumers who own FIT eligible electricity generation system 1 http://www.eai.in/club/users/aathmika/blogs/23849
- 7. at their premises, such as RTPV, will receive a set price for all the electricity they generate and provide to the grid. Usually the tariff is set much above the retail selling price of electricity to provide the avoided cost of generation to the consumer. In an Indian scenario where DISCOMs are struggling due to financial burdens won’t be able to handle the new payment provisions to the consumers. Several Indian states have also adopted the FIT approach to encourage DG based electricity generation. There are usually three key provisions in FIT mechanism 1. Guaranteed grid access 2. Long term contracts 3. Cost-based purchase prices The guaranteed purchase agreements are usually between 15 to 25 years. The tariff is based on an assumption that it can provide enough scope to the generator in order to run the DG system in the most cost effective way. The distribution utility has to recover additional expenses, it will be incurring by purchasing power under FIT compared to retail price. This additional expense can be distributed among all the consumers or can be recovered by a government subsidy to the DISCOM. c) Why Odisha needs NEM policy instead of FIT The Gainesville Regional Utilities (GRU) program “came to a screeching halt, it’s over,” said The Alliance for Solar Choice President Bryan Miller. “This shows that FITs don’t build a long term durable market,”2 The primary reason behind the demise of Feed in Tariff programs is the declining cost of Solar PV systems. You no longer have to over pay an entity for a definite period of time to get Solar applications built. While the per unit cost of fossil fuel based electricity has been on the rise, Solar is getting cheaper day by day with advancements in technology and economies of scale. This provides an opportunity for the utilities to utilize their consumer base for part of their procurement of Solar energy thereby promoting self-consumption and tackling energy deficit. NEM seems the best policy for utilities as well as consumers and provides a platform where both can benefit from each other. The following graph shows the growth of NEM systems in USA, which clearly testifies the impact of such a policy. While FIT has been accepted by lots of countries like Japan and Europe, in USA NEM is the most dominant policy mechanism. The following graph shows the growth in the number of NEM consumers till 2012. 2http://theenergycollective.com/hermantrabish/326831/solar-s-faceoff-feed-tariff-versus-net-energy-metering
- 8. Growth of NEM customers in USA3 A vague difference between NEM and FIT can be the number of meters, as NEM requires one meter and FIT requires two meters (one for generation and one for consumption)to be installed. Though if GBI is to be claimed instead of AD for the project, then NEM systems will need to have one extra Solar meter to calculate the gross generation by the system. As we have analyzed the electricity sector of Odisha in previous chapter, we can easily state that the DISCOMs should be discouraged to bear additional expenses in terms of payment to consumers under FIT and instead should invest in upgrading infrastructure to improve overall efficiency. But in case of NEM, DISCOMs can simply allow the consumer to carry over the surplus KWHs to the next billing period. It reduces the requirement of regular payments as in case of FIT arrangement. Other noteworthy differences are summarized in the table below. Moreover for larger DG systems which might get excluded from NEM program, a FIT program can be offered. This will create a suitable environment where both NEM and FIT policies can co-exist. While it is assumed that the primary objective behind NEM is to benefit the participating consumers and reduce dependence on fossil fuel, it has several other objectives which affect all parts of the electricity sector. Thus the primary goals while formulating NEM policy should be to a. Encourage substantial investment in renewable energy sector b. Stimulate in-state economic growth c. Reduce demand for electricity during peak demand periods d. Help stabilize Odisha’s energy supply infrastructure e. Enhance the continued diversification of Odisha’s energy resource mix f. Encourage conservation and efficiency g. Reduce interconnection and administrative costs for electricity suppliers 3 http://www.eia.gov/electricity/data/eia861/
- 9. Now let us look at the basic differences between NEM and FIT mechanisms from the consumer point of view. NEM FIT NEM can offset consumer’s bill and the consumer has to pay for electricity used in excess or the consumer gets paid by the DISCOM for excess energy exported after use. Guaranteed contract to sell electricity usually for a long period of time which is usually 20 to 30 years. No binding contract needed. Need a legally binding agreement indicating the rate at which the generator will be compensated. Simple and easy to implement It is complex as the consumer needs to get a contract and this may be a competitive process. Acts like a perfect hedge against rising electricity prices No hedge against rapidly rising electricity prices. Price is usually partly indexed to inflation DISCOM gives the consumer right to the net meter and offset the bills. DISCOM gives right to consumers for getting paid for the electricity sold. Analysis of Net Metering regulations of Forum of Regulators (FoR) The FoR have published a working group report on evolving NEM model regulations for RTPV systems. The report covers energy accounting, commercial and technical arrangements. The report was published in the month of August 2013. The report emphasizes on Solar RTPV segment and takes into perspective different kinds of incentives and metering arrangements around the globe. It provides ample amount of information about global best practices and how they can be adopted in the Indian scenario. As this report has been generalized to give all Indian states a head start for NEM regulations we will be considering all important conclusions and recommendations suggested by the authors of the report. The important features of the report are as below. a. Provides a holistic view on interconnection and commercial arrangements b. Different business models for Solar rooftop PV under NEM(e.g. third party ownership) c. Gives a fair amount of idea on technical challenges and preventive mechanisms d. Also provided a draft model regulation to be used by states e. Gives idea about interconnection voltages and capacity limits f. Clears confusion regarding REC and RPO implications due to NEM g. Provides enough arguments as to why there is need for a cap on grid penetration levels h. It provides answers to metering along with ToD (time of usage) billing methods
- 10. Study of Indian Net meter policies The following table provides details on various parameters adopted by different states regarding NEM. States Date of announcement Capacity target Eligibility Type of metering (net/gross) Financial incentives System size Tariff for surplus energy Gujarat September 2011 Phase 1: 5 MW Phase 2: 60 MW (planned) All rooftops Gross Not specified Rs. 11.21/kWh and Rs. 11.78/ kWh Andhra Pradesh March 2013 50% of distribution transformer capacity 50% of distribution transformer capacity 3 phase customers Net 20% subsidy for residential customer (single and three phase) for rooftop solar systems up to 3 kW of capacity Not specified APPC tariff Tamil Nadu November 2013 30% of distribution transformer capacity All rooftops Net Generation Based Incentive Not specified Uttarakhand Not specified 5 MW by 2015 All rooftops Net 300 W - 100 kW for systems with battery backup and 300 W - 500 kW for systems without battery back up Rs. 9.2/ kWh West Bengal August 2010 16 MW by 2017 Institutional consumers such as hospitals and government Net Not specified Solar injection is permitted only up to 90% of yearly
- 11. departments electricity consumption Kerala (draft) 50% of distribution transformer capacity All rooftops Net Not specified APPC tariff Punjab All rooftops Net System size between 1 kW - 500 kW and less than 80% of the sanctioned load Solar injection is permitted only up to 90% of yearly electricity consumption Delhi 15% of distribution transformer capacity All rooftops Net Sanctioned load of the customer Solar injection is permitted only up to 90% of yearly electricity consumption Karnataka (draft) Not specified All rooftops Net
- 12. Net Metering business Models Two kinds of business models are possible as also discussed in the working group report by Forum of Regulators. (a) Self-owned (The rooftop owner owns the photovoltaic system) In this model the rooftop owner who is also the consumer for the utility installs the rooftop Solar system either on its own or a system supplier and installer. The generated electricity is used first to cover the captive load in the consumer premises. Globally there are several instances of this model working effectively such as Japan. Flow of funds and energy in self owned RTPV model4 (b) Third party ownership (The developer owns the PV system and enters into a commercial arrangement with the rooftop owner) In this kind of arrangement, the developers lease the PV systems to interested rooftop owners. This model has been widely adopted in the United States. In this model the leasing company generates its revenue through collection of rental from the rooftop owner under a contract and through depreciation claims on the capital cost of the PV systems thereby getting tax benefit. The rooftop owner avoids large upfront investment and technology risks associated with it. The savings in electricity bill incurred by the system is shared within the two parties. 4 Source: Deloitte report
- 13. Flow of funds and energy in third party owned RTPV model5 There are several factors which a model regulation will need to address which are Key incentives to be given under NEM (Feed in tariff, Generation based Incentives, Renewable energy certificate, capital subsidy, tax credits and fiscal benefits). Ownership models as discussed above Interconnection requirements (Individual project capacity, System capacity, Connecting voltage levels, standards and certification) Commercial Arrangements (Wheeling and Banking, Open Access, Cross subsidy charges, Lease rentals etc.) 5 Source: Deloitte research
- 14. Net metering for Odisha: Limitations and Possibilities
- 15. CASE STUDY: Techno-Commercial analysis of 2.5Kwp grid connected rooftop system in Bhubaneswar, Odisha This project was implemented by Crux Power Pvt. Ltd. Basic features of the project are a. This is a grid connected wasteland Solar PV project. b. This is Odisha’s first thin-film module and canopy based Solar project for household. c. No battery is used thereby reducing maintenance hurdles. d. The Solar power generated is used in all loads parallel to grid power. e. The project comprises of Odisha’s first pilot based Net Meter configuration. The bi-directional meter is provided by the state DISCOM CESU. 2.5KWP grid tied rooftop system6 This project is a grid interactive household project intended for self-consumption. The project was approved for MNRE subsidy amount of 30% on the benchmark capital cost. It is interesting to note that the project is yet to get the central financial assistance although it has been more than a year since the application. The delay in grant of financial assistance is hampering the growth of the market. About more than 10 Billion Rupees are due for various projects at MNRE.7 6 Source: Crux Power Pvt. Ltd. 7 http://www.efytimes.com/e1/fullnews.asp?edid=133257
- 16. Payback Calculation for Roof-top Solar PV Project8 Particulars Value Unit Capacity of solar power plant 2.50 kWp Assumed Capital Cost of solar power plant 5.20 Rs. Lakhs Approx. 30% capital subsidy 1.56 Rs. Lakhs Investment after capital subsidy 3.64 Rs. Lakhs Average Generation from solar power plant per year (320 Days sunshine) 3,200 kWh Effective savings per unit of solar power generated 5.91 Rs./kWh Total savings due to captive solar power generation 0.2 Rs. Lakhs Per year Payback Period owing to above savings 27.5 Years Generation Based Incentive for each generation of unit(Considering Avg. Pooled Power Cost Rs. 2.77) 0.1 Rs. Lakhs Total savings due to captive solar power generation & GBI 0.3 Rs. Lakhs Accelerated Depreciation Benefit for Individuals 80% of capital cost after subsidy in Year 1 Savings owing to the acc. Dep. (AD) Benefit 27.2% 34% tax on the 80% depreciated value Absolute amount benefit from AD 1.0 Rs. Lakhs Capital Cost of power plant less AD & Capital Subsidy 2.6 Rs. Lakhs Payback period owing to savings + AD + Capital Subsidy 8.8 Years Note: This calculation is based on 100% equity Note: The assumptions regarding GBI and AD are not realized and the project has been approved only for MNRE subsidy. We can clearly see that with MNRE subsidy alone, the payback is not at all interesting for an investor. Hence it is imperative for the regulators to address these issues and provide a clear and agile policy framework for the growth of decentralized generation resources. There is one more option for the state regulators to promote Solar RTPV systems in the state. The state can provide capital subsidy instead of GBI at the rate of 10% on the capital cost. This subsidy amount needs to be paid up front to the DISCOM and DISCOM can release the amount to respective consumers over a billing cycle of five years. This will not create immediate requirement of cash and will help everyone gain. GRIDCO can easily fulfill part of its RPO from Solar RTPV systems and will be able to help making the state energy surplus again through DG. 8 Source: Crux Power Pvt. Ltd.
- 17. Grid Stability Under suitable and effective policy environment, the number of NEM systems might grow gradually and cause inconvenience to the grid which is not equipped with enough arrangements for decentralized generation. Also safety and technical concerns are present which may create a lackadaisical environment for the utilities. Thus enough study needs to be done to assess as to how much amount of local and overall grid penetration has to be allowed. In this context it is interesting to note that current studies and information is not enough to determine local (DTR/feeder) level grid penetration limits with any accuracy for connectivity of distributed renewable energy generation including Solar RTPV. Thus it is advised by the working group report by Forum of Regulators to cap the local level grid penetration at a conservative15% of the distribution transformer capacity. Furthermore the utilities can conduct their own studies and perform network upgrades as and when required. Initially the overall cap on NEM systems can be set as a percentage of the overall load of the state. The percentage can be decided after due diligence on availability of subsidies or incentives. The Odisha power transmission corporation limited manages the transmission network of Odisha. Grid Corporation of Odisha Limited is the bulk purchaser of electricity and the distribution networks are managed four DISCOMs: NESCO, WESCO, SOUTHCO and CESU. Hence it is lot more feasible for Odisha to march on Net metering route as there are several DISCOMs who can offer innovative opportunities for NEM consumers. Due to inefficient billing and other technical and commercial losses Odisha is fast moving towards franchisee based distribution reforms although few sections in the state are against it. Thus appropriate due diligence must be conducted to remove any complications arising by NEM adaptation under franchisee based distribution regime. Financially burdened CESU decided to go ahead with franchisee based model amidst protests from few stakeholders in 2013. This is a welcome sign as the DISCOMs in the state will be able to perform network up gradation and renovation, thereby providing more scope for NEM adaptation amongst consumers. Taxes, duties and surcharges Does Net Metering produce taxable income? This question needs to be answered beforehand to remove any ambiguity in future. Conventionally thinking if a household produces surplus units of electricity and produces corresponding income then the income should be taxable. To remove these hurdles, most of the NEM best practices around the world are designed to perpetually rollover of any surplus Kilowatt credits at the end of the settlement period (12 months) or cancel out the credits after 2 or 3 years. As the primary purpose of NEM is to promote self-consumption, there should not be any encouragement from the utility to the consumer to produce more than the on-site demand. In Europe especially UK NEM implementation is not picking up due to the confusion over how to treat the value added tax.
- 18. In USA there are several states which put a surcharge to NEM consumers to recover the fixed cost component of the lost revenue from those consumers. This argument is valid as the NEM consumers are utilizing the grid as much as non NEM consumers while not paying anything for transmission and distribution infrastructure. This surcharge can also be utilized for network and equipment upgrades required to raise the cap on overall grid penetration. In the context of Odisha these kind of surcharge may be built into the policy once there are enough NEM consumers and the distribution system requires upgrades. Resource assessment of DISCOMs Odisha has four DISCOMs to serve four geographical regions of the state. In order to facilitate the adoption of NEM among consumers, there has to be efficient administrative and technical support to the consumer. Hence the following points have to be looked upon a. OERC should instruct the DISCOMs to plan and execute consumer requests for installation of net meters without causing unnecessary expenses and bottlenecks. b. All the four DISCOMs must produce a set of standard operating procedures to be followed once a consumer applies for a connection of net meter. c. The state NEM policy should mandate the DISCOMs to have online provisions for downloading NEM applications and should conduct feasibility study on their own once the application is received. d. The DISCOMs can charge the consumers for the bi-directional meters as per existing provisions related to conventional meters. e. Both the DISCOM and the consumer must sign a net meter agreement which can cover all issues related to safety and equipment specifications. f. If a person wants to move from one residence to another residence along with the Net Meter what should be the provisions. Drafting of NEM policy for Odisha Let us decide various parameters for the NEM policy for Odisha along with rationale for the same. The objectives behind the policy should be to a. Provide opportunities to the citizens of Odisha to produce electricity from renewable technologies for their own consumption b. Encourage the development and adoption of new individual renewable energy sources to reduce greenhouse gas emissions c. Support ongoing research and development to diversify renewable energy sources d. Promote energy conservation and efficiency
- 19. e. Provide opportunity to GRIDCO to fulfill its renewable purchase obligation The implementation of net-metering based rooftop solar system needs to address Nature of incentives being made available to the net metered schemes Metering arrangements to be finalized Interconnection requirements for net metered projects The commercial framework Nature of Incentives being made available to Net Energy Metering Consumers Formulate a single window clearance system for grant of NEM related incentives Rationale: This will expedite the grant of subsidy and other relevant benefits from the State government and will gain the state much needed investor confidence. Provide assistance to the applicants for grant of MNRE subsidy amount which is 30% on the benchmark capital cost. Rationale: This will increase interest among investors against the negative perception about the delays in grant of MNRE subsidy by the Central Government. Provide a Generation Based Incentive on the entire amount of Solar energy generated by the system to NEM consumers. The incentive can be paid at the rate of Average Pooled Power Purchase Cost. The NEM consumer needs to install one extra Solar meter along with the bi- directional meter for the calculation of gross generation. Rationale: As we have discussed earlier that GRIDCO purchases Solar power at much higher costs than the APPC and often buys RECs at exorbitant prices in order to fulfill its renewable purchase obligation. Thus if there is increase in NEM consumers, GRIDCO will be able to achieve its compliance through the Solar rooftop PV systems in addition to other large scale PV systems in the state and won’t have to rely on other sources. As the utilities will be entitled with RPO grant with respect to the Solar rooftop systems, there is no need of granting RECs to the rooftop system owners. As the primary objective behind NEM is to promote self-consumption, the GBI should be allowed up to systems of size 10KW. Metering arrangements to be finalized Allow for both self-owned as well as third party owned model Rationale: This will help investors invest at rooftops where rooftop owners seem reluctant and are risk averse. Interconnection requirements for net metered projects
- 20. Limit individual project capacity of Net Energy Metered systems to 1MW and payment of GBI up to 10KW. Rationale: This is required to avoid consumers taking undue advantage of the program. Limit level of grid penetration to 15% of the closest distribution transformer. Rationale: This will provide enough time for the DISCOMs to analyze their areas and conduct technical study and market based studies to plan their equipment up gradation and maintenance. All four DISCOMs in the state should define their own local level grid penetration guidelines as the current distribution grid is not equipped to handle large quantum of reverse energy flow. In the Odisha state Solar Policy, it has been pointed out that DISCOMs should allow connections to LT voltage levels as per guidelines of Central Electricity Authority. Thus the DISCOMs should be advised to comply with CEA Technical Standards for Grid Connectivity, 2007, (Distributed Generation Resources) Rationale: The CEA standards cover all issues related to synchronization, anti-islanding, back-feed and voltage and frequency trips. It also provides guidelines on harmonic current injections, DC current injection and flicker. Furthermore Connecting voltages for various capacity ranges should be notified by OERC in line with the Odisha distribution/supply code. Rationale: Since the system of supply (maximum demand for each voltage level, etc.) is already defined under the Supply or Distribution Code in each State, The cost of up gradation of the service line and related infrastructure can be as per the provisions of the state supply code Rationale: The capital expenditure can be borne by the consumer but the cost implications on non-NEM consumers remain a matter of debate. The commercial framework Carry forward of energy exported to the grid should be allowed from one billing period to the next billing period.(1 month) Rationale: This will prevent seasonality in generation and the entire surplus export over a year can be considered for settlement.
- 21. The surplus units at the end of a settlement period (twelve months) should be considered for carrying over to the next settlement period up to five settlement periods. At the end of fifth settlement period the surplus units will expire. Rationale: As NEM should encourage self-consumption, this will prevent consumers to over produce or take undue advantage by putting larger systems than requirement. It will also avoid any commercial complexities for the utilities. The overall target for NEM systems in the state should be capped up to the overall extra amount of Solar required other than large scale Solar PV and Solar thermal projects to comply with RPO. Rationale: As NEM based rooftop projects would be considered for RPO of GRIDCO. Exempt NEM consumers from open access related, banking and wheeling charges Rationale: These charges will put strain on the financial viability of the small scale Solar PV projects. Conclusion The Forum of Regulators have provided a model draft policy format with flexibility for the state regulatory commissions to decide on various parameters related to NEM policy as discussed in the previous chapter. Hence it is advised to follow that format to publish the draft policy. The path forward for distributed Solar is not simply mapped; it must be created by a broad collaboration of educated and creative problem solvers. Odisha has been instrumental in bringing out its best when it comes to betterment of the society. One must not forget the numerous other economic benefits achieved due to small scale RTPV in the form of avoided CO2 emission, job creation and avoided impacts of land acquisition etc. The state can no longer reel under electricity deficits and low level of awareness among citizens on Solar resources. OREDA and GEDCOL have been instrumental in initiating the solar story of Odisha and we hope the days of electricity access to all is not too far. Against this backdrop, all stakeholders in the state must come forward and unleash this unique opportunity to make Odisha a green state.