Solar puzzle

There is a policy dichotomy at work in the energy realm solely meant to discourage solar power consumers. The jugglery of math suggests that the government will now buy back electricity for Rs10 per unit from new net-metering consumers, a slash of Rs17 from the previous tariff, whereas those purchasing power from the grid will continue to pay from Rs42 to Rs65 per unit, excluding taxes and duties.

The new net metering policy has met with a difference of opinion among the cabinet stalwarts themselves, as many disapprove of it as a bad signal to the market, as well as those on off-grid solarisation and agricultural tube-wells. A simple one-liner explanation for this change of heart is that there is a significant increase in the number of solar net-metering consumers, resulting in strain on national exchequer.

The new framework has also scrapped net billing, and the existing consumers will gradually come under this dictum as their seven-year contracts expire. Moreover, consumers will no longer be allowed to install solar capacity exceeding their sanctioned load, except for a 10 per cent cushion; and imported and exported units shall be treated separately, apart from denying consumers the privilege to encash credited units.

The decision has come close on the heels of a measure to reduce circular debt by obtaining a loan of Rs1.25 trillion from the commercial banks, in an earnest attempt to appease IPPs with outstanding payments, and to stay afloat on a lower interest rate for ensuring timely payments for new energy purchases. Thus, the new calculation in the solar sector will save the government a staggering Rs545 billion by the year 2034, as the cost of net-metering will escalate to Rs3.6 per unit.

This decorum is not only puzzling but highly unrealistic, and will result in lower investments in future on solar panels. It also defeats an earlier policy of mushrooming renewable power generation avenues. Perhaps, the intention is to compel consumers to stay on the expensive grid, which sells electricity at an exorbitant, scuttling growth and exports.