India: Andhra Pradesh introduces net metering for rooftop plants

26 August 2013

PV capacity continues to grow in India. The state of Andhra Pradesh has unveiled a net metering incentive program for both grid-connected and off-grid installations. Across the country, PV capacity grew by nearly 80 MW in July.

The Indian state of Andhra Pradesh is introducing a net metering system to further promote the use of solar power in the region.

The state's energy department said on Friday that households with rooftop solar power installations could either connect their systems to the grid or remain off-grid, according to a report in Indian newspaper Business Standard.

Currently a 1 kWh capacity rooftop system can receive a 50% subsidy that is split between the country’s New and Renewable Energy Ministry (MNRE), which covers 30% of the incentive, and the Andhra state government, which pays the remaining 20%. The state government has extended its 20% subsidy to up to 3 kWh capacity units and the MNRE is now considering a similar proposal, according to the Business Standard.

As part of the incentive, the rooftop units will be connected to the power grid using a new net metering system, which allows PV users to sell leftover power to the utility.

The subsidy will remain available for off-grid units as well, according to the report.

State officials are hoping the MNRE will increase its share of the subsidy.

"We have already written to the MNRE to grant us enough subsidy to support 10 MW capacity, which translates into 10,000 rooftop solar systems of 1 kWh each during this year," said M Kamalakar Babu, vice chairman and managing director of the the Andhra Pradesh government’s Non Renewable Energy Development Corporation (Nredcap).

According to Kamalakar Babu, a household that invests INR 50,000 ($779) in a 1 kWh unit — excluding the subsidy component -- can save up to INR 700 ($11) a month in energy bills or earn a similar amount by selling the same to the electricity distribution companies, which are expected to pay about INR 3 ($0.05) per unit for the power fed to the grid by these rooftop systems.

The subsidy will remain valid for the first seven years of a new rooftop system.

India is experiencing major growth in the photovoltaic sector. According to the MNRE, the country added 79.5 MW of installed PV capacity in July, bringing the total installed grid-connected PV capacity to nearly 1.84 GW. Current off-grid PV capacity in India is at 131.86 MW. For its current 2013-2014 fiscal year, India has set a goal of 1.1 GW of connected PV and 40 MW of off-grid PV.

The Indian government has set an ambitious target of achieving 20 GW of grid-connected and 2 GW of off-grid PV capacity by 2022.