Net-Metering in Madhya Pradesh

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The Madhya Pradesh Net-Metering Policy was published on 14th October 2015 by Madhya Pradesh Electricity Regulatory Commission. In this article, we will analyze the regulation and define how it can be used.

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Highlights

  • The maximum permissible limit for interconnection to the grid is 1 MW as per the latest amendment (refer).
  • The project should be in the facility/ premises of the consumer
  • Net-Metering provision would be offered to the consumer on a first-come-first serve basis
  • The cumulative target for Net-Metered Solar projects was defined as 10 MW, however the clause has been omitted completely in the recent amendment
  • Cumulative capacity allowed to be connected at a particular distribution transformer is 30% of its rated capacity
  • Third Party Sale will not be allowed

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Concerns over Madhya Pradesh Net-Metering Policy

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Madhya Pradesh is a state which welcomes Renewable Energy by providing various benefits. One important one among those is Net Metering for rooftop solar plants. The policy is applicable for both LT(415V) and HT (Above 415V) consumers who may have their solar system interconnected at the LT side provided the metering arrangement is done at the HT end for HT consumers. On performing on-ground activities for getting net-metering approval we observed the following pain points during one of our Ezy Permits assignments.

 

Madhya Pradesh Net-Metering

1) HT Net-Metering :

As per the policy the bi-directional net-meter is supposed to have a current rating of 1 ampere and accuracy class of 0.5S whereas the real time scenario in MP is all existing HT meters are bi-directional but with current rating of 5 ampere and accuracy class of 0.1S. Now if you would want to get net-metering for your Solar Power System you will have to change your meters and also your CT/PT arrangement which again demands a separate approval.

Suggestion: Since 1 ampere and 0.5S accuracy meter are costly and the existing HT meters are also capable of dual-direction it would be a great step if the Regulatory Commission looks into this. We hope for MPERC to amend the policy to allow meters of rating 5 ampere and accuracy class 0.1S which are cheaper and fit with the current standards. A picture of the current standards for net meter is shown below (reference)
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Input Tax Credit(ITC) of GST

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GST is a form of Value Added Tax. But the VAT had tax cascading which meant many layers of taxes. Input Tax Credit (ITC) is an amazing tool of GST to avoid tax cascading.

2Manufacturer, Trader and End-User

Let us directly jump into an example to understand this better. Assume that a trader is going to buy a solar Module and sell it to an end user. Let’s view it from the trader’s point of view.
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HSN & SAC CODES of GST

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Though the GST (Goods and Services Tax) is praised by many traders, service providers and manufacturers due to the fact that it replaces all other taxes, no more Entry forms, Input Credit Recovery System etc, this new system of HSN & SAC numbers comes with confusions.

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HSN (Harmonised System Nomenclature) Number and SAC (Services Accounting Code) Number got its place as a new column in invoices for Solar Equipment after the implementation of the GST. Yes, it is mandatory to give a column in invoices for HSN/ SAC. Confused? Here’s an attempt to make it simpler for you.
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Solar Net-Metering Guidelines in Goa

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Now that we have the foundation laid on the Solar Policy in Goa, let’s look into details of a particular procedure which is extremely important for the success of a Rooftop Solar Power plant in India: Metering (Gross and Net).

NetMetering

Why the two are important is simple-

  1. it allows virtual banking of power
  2.  it controls wastage of power by interacting with grid
  3. for areas that don’t have too many power cuts, it avoids the need to attach a battery to the system
  4. It reduces your dependence on the grid

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GST in the Solar Energy Sector

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The schedule of GST for the solar sector and its impact has been studied and discussed by multiple companies and individuals. However, we are here to discuss the basics of GST specifically in the Rooftop Solar Sector and our interpretation of the bill and finally the impact it will finally have on the project cost.

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The entire bill may be accessed here

HS Codes may be accessed here (more…)