Rooftop Solar Projects in the Uttar Pradesh Solar Policy 2017

Posted on Leave a commentPosted in Knowledge Center, Solar Facts

The Uttar Pradesh Solar Policy (Draft) highlights a few important figures on capacity of Solar Energy in India. It states that the potential stands at a whopping 23.8 GW in the state out of which the MNRE target is 10.7 GW (4.3 GW in Rooftop) by 2022. The current installed capacity however, stands at 0.269 GW (as of January 2017) which is only 2.5% of the target (refer).

UP
Among the types of Solar Projects for which the Solar Policy is applicable for (see below), only Rooftop Projects have a definite target to achieve:

  • Utility Scale Solar Power Projects
  • Rooftop Projects (4.3 GW)
  • Off-Grid Applications

The regulations that would be followed for Net-Metering & Gross-Metering of grid connected rooftop projects would be the same as before (refer). Among Rooftop Projects installed on government/ public institutions, push would be given to RESCO Projects where investor invests in the project and the institution pays a tariff. Security of payments in such a scenario remains under question. Also, it would largely depend on the framework of the contract that would be designed by UPNEDA.
The policy interestingly states, that the Government of Uttar Pradesh would allocate funds and payment security for CAPEX and RESCO projects respectively. However, with our past experience, we can say it remains under question. For projects done on CAPEX, the institutions will avail benefit of ‘Achievement Linked Incentive’ (refer) which is a cost compensation depending on the percentage of target achieved.

Residential and Private Institutions
An incentive of a maximum absolute amount of INR 20,000 rupees would be disbursed in subsidy/customer; below which it would be disbursed at the rate of INR 10,000/ kW. This is similar to what Haryana had proposed in its 2014 Solar Policy and thereafter removed it in the policy that came out in 2016 (refer). This subsidy is over and above the subsidy provided by Ministry of New and Renewable Energy and would be disbursed only after the completion of the project. Let’s say, disbursement is not a problem. Let’s see how the viability of the project will be increased.
Example case:

  • 3 kW project priced at INR 2.25 lakhs
  • Subsidy by the central government~ INR 75000
  • Subsidy by the state government= INR 20000
  • Cost after subsidy= INR 1.30 lakhs
  • Cost of the net meter~ INR 15,000

So the subsidy will merely just absorb the cost of the net meter. But, that’s a decent difference made for a small project. The project payback period will be reduced by a full year! However, that depends on two major factor:

  • Availability of funds with the State
  • Seamless process of application disbursement of subsidy

From the directional stand point, the policy is definitely sound. We hope, from an implementation stand point, some schemes/ orders follow. Till now, the issues in Uttar Pradesh that have remained are: lack in training support for implementation of net-metering, subsidy disbursements etc. We hope these are resolved with the new policy and new government in place in Uttar Pradesh.

Standardizing Solar PV in India: MNRE

Posted on Leave a commentPosted in Knowledge Center

Our last few blogs have been about analyzing some of the announcements and clarifications by Ministry of New and Renewable Energy and yet again, the organization has some more news for us. The gazette was signed on 30th August, 2017 itself, however, was published on the website only recently.

MNRE-3

This gazette (refer) focuses on standardizing quality of material used and hence the Solar PV projects executed. It aims to address the larger concern in the market of “who takes responsibility if my solar power system doesn’t work”. MNRE takes that responsibility.

Three main steps have been taken in this direction- Requirement of an Indian Standard Mark for the product being sold, power to inspect and power to conduct physical testing at any time.

Requirement of an Indian Standard Mark
⦁    An application needs to be made for use of the Indian Standard Mark to the Bureau of Indian Standards
⦁    No one shall be allowed to use this mark unless approved by the Bureau
⦁    Defective goods that don’t conform to the standards prescribed by the Bureau need to be deformed beyond use and disposed as scrap to the manufacturer in India or overseas
⦁    The prescribed standards are as shown below:

table1
This is a first step in the direction of establishing trust among buyers and investors who have been wary of investing in the sector due to the long term risk involved in the technology. Also, this takes a closer look at cheap material which was so far being used for some solar projects in order to cut costs at the cost of long term plant performance.

Power to Inspect
⦁    The Appropriate Authority (someone from MNRE) may require sellers/ manufacturers to furnish samples
⦁    The authority will also be authorized to inspect components and material in possession of the seller manufacturer
⦁    Finally, it can also search premises and seize goods if it believes problems in compliance of the order

Drawing and Testing
⦁    Testing of components would happen at least once in two years at any of the manufacturing/ selling units selected randomly
⦁    Series approval for similar components with small variations such as rating etc would be allowed by the authority, where MNRE will have the final say
⦁    The Bureau may intervene if required for testing of these components
⦁    After testing is performed in a laboratory recognized by the bureau, the test report is retained by the authority if it conforms to the standards and if not, sent to the bureau for further action
⦁    The status of this would be updated on MNRE website

A crystal clear order leaves no scope for escape for sub-standard manufacturers raising the level of Solar PV in India hopefully. Third part testing companies will have now align themselves with the new standards required in order to keep catering to the manufacturers. This also protects the interest of the end customer who does not know much about technicalities of Solar PV.

Apart from technicalities, what’s also important is standardization in prices of Solar PV and delivery of best prices from manufacturers. Ezysolare has now launched a reverse auction platform, EzyBidding, to give you the best Solar Inverter and Panel prices. Click here to try it for free.

Who’s eligible for Solar Subsidy: MNRE Clarifies

Posted on 2 CommentsPosted in Knowledge Center

MNRE is actively putting out clarifications that the industry has been seeking. The last one was on Concessional Custom Duty Exemption (refer) and now, there is one on who’s eligible for subsidy (refer). We hope that this clarifies the mess about who really is eligible for subsidy. A brief of the clarification is as follows:

MNRE-3

  • All rooftop solar power plants, whether net-metered/ gross-metered or not, are all eligible for Central Financial Assistance or Subsidy of 30% provided by Ministry of New and Renewable Energy. Of course, this has a restriction that it is only for those of the Institutional, Domestic or Social Sector (refer)

(more…)

The birth of something new: Ezy-Bidding

Posted on Leave a commentPosted in Knowledge Center

Yes, the industry has progressed. Solar Energy is booming, it’s the future! We just hit a record low tariff of INR 2.44 for Solar Energy- proving that grid electricity won’t be here for long. Yet, there is something extremely important that has lacked in the industry: Efficiency. It’s ironical that we speak of ‘energy efficiency’ when the industry is not able to deliver efficiency in work completion itself.

Ezybidding1

Sometimes, it’s about approvals and sometimes about lagging timelines for equipment delivery or high prices offered by equipment suppliers. Of course, we all get bothered by it, yet, we have not been able to address this issue since our hands had been tied. After a lot of thinking and brain-storming, we came up with an idea which we thought may address part of the problem. (more…)

Net-Metering in Madhya Pradesh

Posted on Leave a commentPosted in Knowledge Center

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.

Regulations - Image

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

(more…)

Concerns over Madhya Pradesh Net-Metering Policy

Posted on 2 CommentsPosted in Knowledge Center

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)
(more…)

Input Tax Credit(ITC) of GST

Posted on 2 CommentsPosted in Knowledge Center

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.
(more…)

HSN & SAC CODES of GST

Posted on 10 CommentsPosted in Knowledge Center

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.

image

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.
(more…)