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NET Vs. GROSS:- Impact of different billing arrangements & Is there a middle way possible ?

Let's start with analyzing the impact of different billing arrangements on the consumer electricity bills. We are trying to figure out with an example. Since commercial & Industrial sector will be the most impacted by Gross Metering so we are taking here an example of an Industry with constant load and running in 2 shifts?

Let’s say an Industry is having Monthly consumption 12000 Units .

Based on consumption, any EPC player/consultant suggest him the project of 100 KWp Capacity (Considering 4 units/day/KWp), here we assume that he has sufficient shadow free roof available and has suitable sanctioned load required for 100 KWp net metering Rooftop SPV Project. Let say the industry runs in two shifts with constant load!!!

As per the above assumptions, the generation and consumption will go as below:-

Since it runs on the constant load, it will export half of the energy to Discom in day shift & import the same amount during night shift. This import being equivalent to export sets off under net metering arrangement.

Now, coming to the calculation for billing as per different billing arrangements:-

If the billing is done based on the 3rd method, consumer will get the better ROI and smaller payback period than gross metering but if it’s done by method no. 2 consumer will never go for Gross metering and will rather opt for Behind the meter arrangement but while adopting behind the meter system, he should analyze his base load, which is in above mentioned case is 25 KW (25KWh consumption per hour) so with behind the meter arrangement, he could install solar project of 25 KW only.

So the ultimately the solar potential for this type of consumers will reduced to 20-25% of the actual assessed potential. This will surely impact the national target of 40 GW Solar Rooftop Installations by 2022.

The industries who do not have the continuous load could neither install project under gross metering ( Due to lower tariff), nor under behind the meter ( due to fluctuating load, which would lead to wastage of huge amount of power generated from solar).


Proposed Method of Billing by FOR (Forum of Regulators) states about Energy Accounting and settlement for Net Billing as:-

Net billing is the arrangement where DRE plant is:

a. Installed to serve a specific consumer,

b. Connected on the utility side on the consumer meter,

c. Selling power to a distribution licensee under Power Purchase Agreement, and

d. Entire power is consumed by the consumer.

The same has been adopted by most of the states like West Bengal & UP recently. However, RERC Draft regulations is a bit different i.e. it says:-

Net Billing is the arrangement, where the Renewable Energy generating system is:

(a) Installed to serve a specific consumer;

(b) Connected on the Distribution Licensee side or consumer side of the consumer meter;

(c) Selling entire power generated to the Distribution Licensee under the Connection Agreement;

(d) Entire power is consumed by the consumer:

It added or consumer side in to it . The same point has been clarified once again on point No. 11.3 of the draft i.e.

Under Net Billing arrangement, the Renewable Energy generating system shall be connected on Distribution Licensee side or consumer side of the consumer meter:

“Provided that, in case the Renewable Energy generating system is connected on consumer side of the consumer meter, the existing Meter in the premises of the Eligible Consumer shall be replaced by the Net Meter at the cost of the Consumer, in accordance with the provisions of the Electricity Supply Code, as amended from time to time.”

Existing meter shall be replaced with net meter under net billing arrangement.

So it is clear that net meter i.e. bi-directional meter will be used in net billing subject to the condition that the Renewable Energy generating system is connected on consumer side of the consumer meter”

I think it’s clear now that billing would be done by Method No.3 in case Rajasthan !!

All of the stakeholders are free to share their views !!!

Disclaimer: - Any views or opinions represented in this blog are personal and belong solely to the author and do not represent those of people, institutions or organizations. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site.


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