“Revision of tariff in respect of new Solar Rooftop Photovoltaic Units of 1kW to 10kW capacity installed by domestic consumers”.

Suggestions and opinions on Revision of tariff in respect of new Solar Rooftop Photo-voltaic Units of 1kW to 10kW capacity installed by domestic consumers

  

Preamble :

The Karnataka Electricity Regulatory Commission (KERC), in exercise of the enabling powers conferred under the Electricity Act, 2003 and provisions of the National Electricity Policy, 2005 and Tariff Policy, 2016 has issued a discussion paper proposing revision of tariff in respect of new Solar Rooftop Photovoltaic Units of 1 kW to 10 kW capacity installed by domestic consumers.

The Commission has invited suggestions/comments/ views of the stakeholders and the general public on the following issues:

A.  The normative parameters that could be adopted for determination of tariff for smaller capacity SRTPV plants .

B. Any other modification/change in the operational procedures that could be adopted for encouraging SRTPV installations.

C. Any other issue considered relevant.

With regard to the above, I submit below my suggestions and opinions on betterment of processes and procedures .

Tariff or Feed in Tariff :

 Scenario :

Most of our customers argue that feed in tariff is too low. The argument definitely has water. The fact is “BESCOM is buying power from the ‘rooftop solar’ owner at a much lower rate than what they are selling to them or other conumers”. That is, the current feed in tariff is rupees 3.56 per unit while the average selling price of BESCOM is well above rupees 5 or 6 a unit (or even more) . Also, there is no escalation clause in the power purchase agreement (PPA).

This is  an unfair proposition. On the other hand BESCOM revises its selling rate almost every year at an average rate of about 7 to 8 Percent year on year. In the net metering scenario, The SRTPV (solar rooftop photo-voltaic) consumer buys at a rate higher than the rate he sells power to BESCOM.

Given that any excess feed in from a SRTPV consumer is consumed within the radius of the distribution transformer or in most cases by the immediate neighbor, it will be prudent to assume minimum or nil T and D losses from the power generated from a SRTPV unit. So, a SRTPV owner is giving clean power to BESCOM with almost Nil T & D losses with capex coming in from the SRTPV Owner.

Not only that the SRTPV consumer and the installer goes around pillar to post for all the approvals and commissioning.

SUGGESTION:

• The details of the cost incurred by BESCOM for purchasing power is given in their website (https://bescom.org/2018-7/)
• As per the details available in the website, average cost incurred by BESCOM for purchasing power in the year of 2018 is as follows

Sl No	Month	PP Cost (INR/KWh)
1	Jul-18	₹ 5.42
2	Jun-18	₹ 5.73
3	May-18	₹ 5.51
4	Apr-18	₹ 5.23
5	Mar-18	₹ 4.67
6	Feb-18	₹ 4.98
7	Jan-18	₹ 4.82
	Avg	₹ 5.19

• Average power purchase cost by BESCOM is rupees 5.19 rupees per unit.
• At an inflation of 3% year on year, the cost of power purchase by BESCOM for the next 20 year will be as follows

YEAR	PP Cost (INR/KWh)
1	₹ 5.19
2	₹ 5.35
3	₹ 5.51
4	₹ 5.68
5	₹ 5.85
6	₹ 6.02
7	₹ 6.20
8	₹ 6.39
9	₹ 6.58
10	₹ 6.78
11	₹ 6.98
12	₹ 7.19
13	₹ 7.41
14	₹ 7.63
15	₹ 7.86
16	₹ 8.09
17	₹ 8.34
18	₹ 8.59
19	₹ 8.84
20	₹ 9.11
AVG	₹ 6.98

• So in the most optimistic of scenario , the average power purchase cost by BESCOM over the next 20 years will be rupees 6.98 a unit.
• Any consumer who wishes to install SRTPV will be a middle class consumer falling in the second or third slab or BESCOM tariff .
• Currently Bescom tariff varies from 3.5 rupees to 7.65 Rupees a unit depending on the tariff slab.
• Given that Solar is still an expensive proposition, it will be safe to assume that any person who wishes to install solar will fall in the middle slab say who pays an average cost of rupees 5 per unit of electricity.
• So in a scenario where the consumer does not have SRTPV unit in his premises, BESCOM is charging him or her rupees 5 a unit (This is a very safe assumption since most domestic consumer who can afford SRTPV units fall in the higher slabs) .
• In other words, BESCOM charges at a rate of 5 rupees per unit for any domestic consumer.
• At an escalation of 4% every year, the unit rate of BESCOM power for the domestic consumer is as follows .

YEAR	Tariff (INR/Kwh)
1	₹ 5.00
2	₹ 5.20
3	₹ 5.41
4	₹ 5.62
5	₹ 5.85
6	₹ 6.08
7	₹ 6.33
8	₹ 6.58
9	₹ 6.84
10	₹ 7.12
11	₹ 7.40
12	₹ 7.70
13	₹ 8.01
14	₹ 8.33
15	₹ 8.66
16	₹ 9.00
17	₹ 9.36
18	₹ 9.74
19	₹ 10.13
20	₹ 10.53
AVG	₹ 7.44

• So in a 20 year time scale scenario, assuming ambitious very little inflation, BESCOM is buying power from KPTCL , NTPC and others at rupees 6.98 a unit and selling to the consumer at 7.44 rupees a unit.
• So ideally, BESCOM must pay any producer of electricity a minimum of rupees 6.98 a unit.
• However, BESCOM would say that the SRTPV consumer is using the BESCOM infrastructure free of cost. This is however not true. In a NET metering scenario, BESCOM recovers the infrastructure costs as demand charges. So, notwithstanding SRTPV, the consumer is paying for the infrastructure. For example, with or without SRTPV a consumer having sanctioned load of 5 KW pays (1x50) + (4x60) = 290 rupees a month. This is also subject to revision every year.
• BESCOM recovers its T and D losses in the profit earned. In a SRTPV scenario, the SRTPV owner is giving good clean power at nil T and D.
• BESCOM however loses a paying consumer, so to be fair to BESCOM and to account for cross subsidy, rupees 1.25 or 125 paise per unit of electricity can be pegged to account for losing a paying customer and for cross subsidy.
• So Rationally, any SRTPV consumer injecting excess energy into grid must be paid a rational price of (698-125) = 573 paise a unit or rupees 5.73 a unit.
• Competitive tariff for SRTPV owners will also encourage more installations and at the same time bring pressure on KPC and other companies to reduce rates and increase efficiency. 

Ease of application and Approvals:

Every installer and every SRTPV consumer is irritated by long and lengthy procedures and series of approvals required for SRTPV installations. There is an urgent need for rationalization of processes.

Plenty of precious time is wasted waiting at BESCOM offices for concerned officials.

Suggestions :

• Bescom website gives a timeline for various approvals. But it is nowhere mentioned what must be done or what is the next step if the time line is not adhered to.
• As per BESCOM website, it says all SRTPV applications must be done Online Only. In that case, why is format 1 Still there in the website? BESCOM officials are insisting on format 1 inspite of applying online. Format 1 must be abolished.
• Submission of completion report (Format 5) must be made online. Submission to commissioning timeline must be strictly adhered to.
• If BESCOM officials find any deviation or discrepancy in installation, the same must be put up online within a time frame.
• The delay in commissioning (If any) after submission of work completion report (Format 5) must be documented and monitored.
• Hybrid inverter empaneled by BESCOM by name Studer has a different grid interconnection Topology. Many BESCOM officials are not accepting this grid interconnection Topology though the inverter is empaneled. This is causing many delays and cost and time overrun.
• Best is to have a single point of contact for all SRTPV approvals. That is notwithstanding the sub-division, there must be a single point of contact in BESCOM office for all SRTPV approvals.

Billing issue:

Almost all SRTPV consumers are having tough time with billing. Following are few of the major issues regarding billing :

• Most consumers are not receiving the SRTPV bills on time.
• Some consumers are not receiving bills for months together.
• Payment is not happening on time.
• Meter readers are unable to take the EXPORT and IMPORT readings.
• In Spite of installing SRTPV system, consumer is receiving normal bills with arbitrary readings.
• Meter reader is sometime confused with the check meter (Abolishing check meter is a welcome move by BESCOM )

Suggestions :

• BESCOM must pay interest if there is delay in payment or even delay in meter reading.
• Meter reading along with meter serial number must be available online for customer to cross check.
• Call center (1912) must also handle SRTPV complaints.
• ALL SRTPV bills must be only online.

NOTE :

Consumers who are putting their hard-earned money for SRTPV are in a way doing a great service to nation and environment. If they cannot be incentivised, at least they must not be troubled or harassed or made to run from pillar to post for billing issue. Their due must be paid on time.

sanctioned load issue:

• If a rational feed in tariff is determined, then there must not be any capping on Capacity of SRTPV installation.
• Overloading of distribution transformer will be taken care at the technical feasibility stage.
• But at the application stage for installations less than 10 KW, the consumer must be allowed to install SRTPV system greater than the sanctioned load. (If the distribution transformer is not capable of taking load, then the application will be rejected at the technical feasibility stage).
• If tariff policy is rational, BESCOM will not make a loss.