Policy for Net-Metering based Renewable

Energy Applications, Madhya Pradesh,

2015- DRAFT
1. PREAMBLE

1.1 To harness the potential of renewable energy resources in the state, Government of
Madhya Pradesh is in the process of finalising the policy for net metering based
renewable energy applications. In light of technological advantages unfolding in the
sector and achievements made by renewable energy based power projects, a green
source of energy in being considered as one of the alternative to augment the current
sources of generation. Solar being the most favourable and suitable technology for
decentralized and distributed generation, it may be one of the most popular options for
harnessing Net-Metering based Renewable Energy Applications.

1.2 The state of Madhya Pradesh is endowed with high solar radiation with around 300
clear, sunny days. The state offers good sites which have a potential of more than 5.5
kWh/m2 /day. The Madhya Pradesh Solar Policy, 2012 has provided a major thrust to
the installation of grid-connected solar projects in the state. Further Clause 5(b), section
I of the policy brings out its intention to promote decentralised solar energy generation.
Jawaharlal Nehru National Solar Mission (JNNSM) has identified rooftop solar PV as
one of the categories of solar projects. “The Mission will encourage rooftop solar PV
&other small solar power plants, connected to LV/11 KV grid, to replace conventional
power and diesel-based generators. …..”

1.3 The solar power policies followed in the country have registered a great success in
attracting investment in this sector. Bankability of Solar Photo Voltaic (SPV) projects
and trained manpower within the country has also increased substantially. Private
sector has shown huge interest in the sector. As a consequence, the system costs have
plummeted downwards year by year. This has created a highly competitive atmosphere.
SPV installations have vast potential for use at decentralised load locations. SPV small
power plants can be installed on roofs or within the premises of consumers. The power
generated could be primarily used by consumers for own use. The power generated,
over and above the consumer‟s requirement, could be feasibly injected into low tension
(LT) electricity network. The energy thus exported could be adjusted against the energy
purchased by the consumer from electricity utilities by way of installation of
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 bidirectional meter. The consumer, after settlement of energy within the settlement
period, shall pay for the net energy purchased by him from power utilities.

1.4 Central Government has proposed capacity addition of 40,000 MWp among all the
states by 2022.MP share of 2,200 MWp is 7th highest among all the states.

Year Wise target for Grid Connected Solar Rooftop system set by MNRE:

S.No. Year Targets in MW

1 2015-16 10
2 2016-17 265
3 2017-18 275
4 2018-19 330
5 2019-20 385
6 2020-21 440
7 2021-22 495

1.5 In order to have broader community participation, New and Renewable Energy
Department, Government of M.P. is in process of notifying the „Policy for Net-
Metering based Renewable Energy application, 2015‟.This policy has been
structured so as to promote consumption of energy generated from renewable energy
resources by individual users at decentralized locations, primarily to decrease the
burden on conventional sources of energy (From generation to delivery, India incurs
one of the highest electricity losses globally). For India to achieve its energy security
and energy access goals it needs to plug these losses. „Policy for Net- Metering based
Renewable Energy applications, 2015‟ would serve to reduce the T & D losses, which
are a bane for the DISCOMs. It is also envisaged, through this policy, to help the
community realize the importance of judicious use of electricity and involve them in
the process of reducing dependence on conventionally produced electricity.

What is Net- Metering?

Net metering is the process through which a Renewable Energy based Power Plant is
installed on the roof, open space, walls, etc. (within the legal premises) of the building
to generate electricity. Generated power is first used in the building for captive
requirement and the surplus power is fed to the grid of DISCOM. In case power
requirement of the building is more than the power being generated, then extra power
requirement is drawn from the grid.

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 For Example:

Case-I

In case generation of power from Renewable Energy based Power Project equals the
power requirement of the Net metering consumer, there is no export or import of power
from the grid. Hence, net billing units for this type of consumers will be zero.

Case-II

In case generation of power from Renewable Energy based Power Project is greater
than the power requirement of the Net metering consumer, additional power generated
can be supplied to the grid and settled against future surplus or as per regulation within
the settlement period.

Case-III

In case generation of power from Renewable Energy based Power Project is less than
the power requirement of the Net metering consumer, additional power required can be
imported from the grid and settled accordingly.

2. SCOPE AND APPLICABILITY OF NET METERING POLICY

This Policy may be called the Policy for Net-Metering based Renewable Energy
Applications, Madhya Pradesh, 2015. This Policy shall extend to the whole of the State
of Madhya Pradesh. This Policy shall come into force from the date of their publication
in the Official Gazette and shall be applicable for Rooftop and Ground mounted
Renewable Energy based Power Project installations in the State of Madhya Pradesh.

The Net- Metering facility shall also be applicable to such Eligible Consumers who
have installed Renewable Energy based Power Project before notification of this policy,
subject to technical feasibility at Distribution Transformer / Sub- Station Level and
fulfilment of laid down procedure under this policy.

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3. DEFINITIONS

(1) “Eligible Consumer” means a consumer of electricity in the area of supply of the
Distribution Licensee who uses or intends to use a Renewable Energy based Power
Project, installed on a roof-top or any other mounting structure in his premises, to meet
all or part of his own electricity requirement, and includes a Consumer catering a
common load such as a Housing Society:

Provided that such generating System may be owned and/or operated by such
Consumer, or a third party leasing such System to the Consumer.

The „Eligible Consumer‟ as defined under “MPERC Grid Connected Net Metering
Regulations, 2014”shall prevail over the above definition.

(2) “Inter-connection Point” means the interface of the Renewable Energy based
Power Project with the outgoing terminals of the meter / Distribution Licensee‟s cut-
outs/ switchgear fixed in the premises of the Eligible Consumer:

Provided that, in the case of an Eligible Consumer connected at the High Tension
(„HT‟) level, the „inter-connection point‟ shall mean the interface of the Renewable
Energy based Power Project with the outgoing terminals of the Distribution Licensee‟s
metering cubicle placed before such Consumer‟s apparatus.

(3) “Net Metering Arrangement” means an arrangement under which a Renewable

Energy based Power Project with Net Meter installed at an Eligible Consumer‟s
premises delivers surplus electricity, if any, to the Distribution Licensee after setting off
the quantum of electricity supplied by such Licensee during the applicable Billing
Period ;

(4) “Net Metering Connection Agreement” means an agreement entered into by a

Distribution Licensee and an Eligible Consumer for executing a Net Metering
arrangement;

(5) “Obligated Entity” means an entity required to fulfill a Renewable Purchase

Obligation („RPO‟) as specified by the Commission in Regulations governing such
Obligation („the RPO Regulations‟);

(6) “Premises” means and includes roof-tops or any areas on the land, building or
infrastructure or part or combination thereof in respect of which a separate meter has
been provided by the Distribution Licensee for the supply of electricity ;

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 (7) “Renewable Energy based Power Project” means the system to generate
electricity from such source(s) which are recognized as renewable energy source(s) by
the Ministry of New and Renewable Energy (MNRE) or any other agency as may be
notified by the Government / Commission;

Words and expressions used in these Policy which are not specifically defined herein
but are defined in the Electricity Act 2003 shall have the meaning assigned to them in
the said Act; and, if not defined in the Act, shall have the meaning assigned to them in
any Act of Parliament or the State Legislature applicable to the electricity industry.

4. REGULATORY FRAMEWORK

2.1 Electricity Act, 2003 has been in force since June 2003. In accordance with the
provisions of this act, any Government/ Private individual or agency is free to set up a
power generation plant.

2.2 Madhya Pradesh Electricity Regulatory Commission (MPERC) is functioning since

1999. MPERC has brought out draft notification for application of renewable energy
resources (RES) as per net metering process vides notification no.G-39 of 2014.

2.3 In case of any discrepancy between the provisions of this policy and the Act or orders
or regulations of the Commission, presently or in future, the provisions of the Act and
orders/regulations of the Commission shall prevail.

5. OBJECTIVES OF THE POLICY

5.1. To encourage broader community involvement and growth of decentralized Renewable

Energy based Power Projects.

5.2. To provide further impetus to growth of clean technology in the state of Madhya
Pradesh.

5.3. To improve tail-end grid voltages and reduction in system congestion with enhancing
share of self - consumption of renewable energy based electricity.

5.4. To reduce carbon emissions.

5.5. To develop sustainable energy solution for future and energy security of the nation.

5.6. To encourage job creation in the downstream Renewable Energy market segment.

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6. GUIDING PRINCIPLES OF THE POLICY

6.1. OPERATIVE PERIOD:-

The policy shall become applicable from the date of its notification in the Madhya
Pradesh State Gazette.

6.2. APPLICABILITY OF THE POLICY:-

All Renewable Energy based Power Projects adopting net-metering mechanism shall be
covered under this policy.

6.3. ELIGIBILITY CRITERIA:-

In order to promote utilization of Renewable energy, all categories of consumers, who

use Renewable Energy based Power Projects (either self-owned or third party owned)
installed in the consumer premises, to offset part or all of their own electrical
requirements are considered as „Eligible Consumers‟.

6.4. CAPACITY CAP:-

6.4.1. Capacity Limit at Distribution Transformer:

The cumulative capacity of all Renewable Energy based Power Projects under Net
Metering Arrangements connected to a particular Distribution Transformer of the
Licensee shall not exceed 70% of its rated capacity

6.4.2. The distribution licensee shall update on half-yearly basis the capacity available at
distribution transformer level for connecting renewable energy systems under Net
Metering arrangement and shall provide information regarding the same on its website.

6.4.3. Capacity Limit for Individual Installation:

The Renewable Energy based Power Projects have to be connected at the supply
voltage level, which is determined on the basis of the maximum contract demand of the
customer under the MP Electricity Supply Code as outlined below:

Maximum Contract Demand Supply Voltage

3 kW 230 V
150 HP (112 kW) 400 V
300 kVA 11 kV
10,000 kVA 33 kV

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6.5. REGISTRATION & PROCESSING PROCEDURE (For Eligible Consumer):-

The eligible consumer is required to follow the following procedure for registration
under this policy: - (online registration)

 Filling up and submitting online application form, alternatively download e-form fill
up and upload the same at the online portal or submit it to MPUVN.(Format – I)
Necessary fee and documents, as prescribed in the Format-I, shall be uploaded with
online application or shall be submitted with offline application, as the case may be.

 MPUVN will examine the application within seven working days and will forward
to the concerned DISCOM. In case there are any discrepancies in the application or
it is incomplete, MPUVN shall inform the customer and the period taken by the
customer in completing the application would be excluded from the time available to
MPUVN for forwarding the application to the DISCOM.

 Concerned officer of DISCOM shall visit the premises for checking technical
feasibility of the proposed interconnection and conducting overall feasibility
analysis within fourteen working days of receipt of application by the DISCOM

 Applications would be examined by the DISCOM, as regards the capacity available

at distribution transformer level, strictly on first come first serve basis, taking the
date of filing the application with the nodal agency as the relevant date.

 If installation is technically feasible, approval letter would be sent to the applicant

with a copy to MPUVN. Decision would be taken by the DISCOM within 30 days of
the receipt of the application by the DISCOM.

If installation of renewable energy project is less than 10kW, intimation to CEIG

shall be sent by MPUVN on behalf of project developer.

 The eligible consumer shall complete installation of the approved system within
three months from the date of issue of approval letter by DISCOM.

 The DISCOM shall provide the commissioning certificate to the eligible consumer
as well as to nodal office within 30 days of commissioning.

 The Distribution Licensee shall ensure that the inter-connection of the Renewable
Energy based power projects with its Network conforms to the specifications,
standards and other provisions specified in the CEA (Technical Standard for
Connectivity of the Distributed Generation Resources) Regulations, 2013, the CEA

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 (Measures relating to Safety and Electric Supply), Regulations, 2010 and the
Madhya Pradesh State Grid Code, or as may be specified in future.

 In case the eligible consumer fails to avail connectivity of the Renewable Energy
based Power Project within three months, the registration is liable for cancellation.
In such cases, the transformer capacity can be used by some other applicant
consumer, again on first come first serve basis.

6.6. TECHNOLOGY:-
Renewable Energy based Power projects, with or without storage, conforming to the
technical specifications specified by MPERC/MNRE/CEA, will be eligible for
incentives available under this policy.

Provided that, if an Eligible Consumer opts for connectivity with a battery back-up, the
inverter shall have a separate back-up wiring to prevent the battery/ decentralized
generation (DG) power from flowing into the grid in the absence of grid supply, and
that an automatic as well as manual isolation switch shall also be provided.

6.7. ENERGY ACCOUNTING AND COMMERCIAL ARRANGEMENTS:-

Provisions for energy accounting and commercial arrangements will confirm to

MPERC Grid Connected Net Metering Regulations, 2014 and subsequent amendments
thereof.

6.8. INTERCONNECTION NORMS:-

The interconnection of the renewable energy system with the network of the
distribution licensee shall be made as per the technical standards for connectivity of
distributed generated resources regulations notified by the Central Electricity Authority
(Measures relating to Safety and Electric Supply Regulations 2010 and subsequent
amendments thereof).

6.9. METERING ARRANGEMENT:-

Provisions for metering arrangements will confirm to MPERC Grid Connected Net
Metering Regulations, 2014 and subsequent amendments thereof.

The bi-directional (net) meter shall be installed at the interconnection point of the
Eligible Consumer with the network of the distribution licensee for reading the import
and export of power, and the bill will be issued by DISCOM on net of import and
export of power.

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 Installation & Operation of Meters shall confirm to CEA (Installation & Operation of
Meters) Regulation, 2006. Accuracy Class of Consumer Meter:

Voltage Limit Precision of Meters

Up to 650 V 1.0 or better

Above 650 V and up to 33 kV 0.5 S or better

Above 33 kV 0.2 S or better

6.10. NODAL AGENCY:-

MPUVN Limited, New and Renewable Energy Department, Government of M.P. shall
be the nodal agency for Renewable Energy based net metering Power Projects under
this policy.

7. INCENTIVES :-

Installation of Renewable Energy based Power Project under the policy shall be
exempted from banking, wheeling, cross-subsidy and open access charges, subject to
MPERC Net Metering Regulations, 2014 and amendments thereof. The energy
generated from the system shall be exempted from electricity duty and cess, and the
consumers would have to pay the same only for the net energy consumed from the grid.

All Eligible Consumers can avail Central Financial Assistance from MNRE, as per the
applicable scheme for Renewable Energy based Power Project . The nodal agency shall
take necessary action for processing the request accordingly.

7.1. TAX EXEMPTIONS:-

Installation of Renewable Energy based Power Project under the policy shall not be
treated as “construction” and there shall be no additional liability of property tax for
installation of Renewable Energy based Power Projects on their rooftops or premises.

The equipment purchased for installation of Renewable Energy based Power Project
under this policy shall be exempted from VAT and entry tax, as per the exemption
granted to these systems under Madhya Pradesh VAT (Amendment) Act – 2009 and
subsequent amendments thereof.

7.2. PROVISION REGARDING SURPLUS POWER:-

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 If there is surplus power generated after fulfilling captive consumption requirements at
the end of the settlement period, the surplus power shall be compensated as per
regulations of MPERC.

8. EMPANELMENT OF TECHNOLOGY FACILITATORS / DEVELOPERS /

AGENCIES

For standardization of quality and to enable easy installation of Renewable Energy

based Power Projects, MPUVN would empanel technology facilitators/ developers/
agencies for implementing Renewable Energy based Power Project , along with
standards for installation, inverter standards, solar module standards, safety standards,
rates, etc., after thorough due diligence of documents through separate Expression of
Interest. MPUVN shall invite proposals for empanelment from time to time, normally
twice in a year. Interested parties can apply, along with necessary documents, for being
added to the empanelled list as technology providers.

9. NET METERING INTER - CONNECTION AGREEMENT

Net Metering connection agreement between distribution licensee and eligible

consumer is attached at Format – II.

10. RPO

The quantum of electricity generated from the Renewable Energy based Power Projects
under net metering arrangement by an Eligible Consumer, who is not defined as
Obligated Entity, shall qualify towards compliance of Renewable Purchase Obligation
(RPO) for the distribution licensee in whose area of supply the Eligible Consumer is
located. The quantity of electricity generated by a consumer would be ascertained
through the renewable energy meter (Generation meter) installed at the consumer‟s
premises at his own cost.

In case the Eligible Consumer is an Obligated Entity, the quantum of electricity

generated from the Renewable Energy based Power Projects under net metering
arrangement, shall be counted towards meeting his RPO.

11. Many Banks have policies to include cost of Renewable Energy installations in the loan
for houses; there is no need of hypothecation beyond the asset created under the loan.
Such loans are also eligible for relief under IT act.

MPUVN shall give all necessary support in sanctioning such loans from banks.

12. SHARING OF CDM BENEFITS

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 The CDM benefits arising from Renewable Energy based Power Project shall be
retained by the consumer. However, arrangements will confirm to MPERC Grid
Connected Net Metering Regulations, 2014 and subsequent amendments thereof.

13. ROLES & RESPONSIBILITY:-

13.1. Nodal Agency (MPUVN):

1) Receiving applications under Net Metering arrangement from Eligible Consumers

& processing it to concerned DISCOM‟s.

2) In case Eligible Consumer wishes to avail central financial assistance, the nodal
agency shall take necessary action for processing the request accordingly.

13.2. Distribution Licensee (DISCOM‟s):

1) Due – Diligence of applications under Net Metering arrangement received from

MPUVN as per the laid down procedure of this policy.

2) Visiting consumer premises for checking technical feasibility of the proposed

interconnection with Distribution Tran and conducting overall feasibility analysis.

3) Issuing approval letter to Eligible Consumer for installation of Renewable Energy

based Power Projects.

13.3. Eligible Consumer:

1) Filing of application in prescribed format for installation of project under Net

Metering arrangement.

2) Installation of project within three months from the date of issue of approval letter
by DISCOM.

14. The administrative officer may issue clarification & interpretation on the
provisions of the policy and also will be authorized to modify the policy based on
provisions of the MPERC Grid Connected Net Metering Regulations or guidelines
issued by Central Government and State Government.

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