Renewable energy sources, such as solar energy, are a cleaner and more sustainable replacement for traditional energy sources such as natural gas, oil, coal etc. Several other factors, like considerable price drops and government policies and incentives, have encouraged more organisations to invest in solar power systems in India. However, it is expensive to store electricity; hence, the solar systems are connected to the power grid, where excess, unconsumed electricity is exported.
While designing the regulations for these solar power systems in India, the government has defined two arrangements – gross metering and net metering. Let us understand how these systems have played their part in boosting the solar revolution in our country.
The net metering policy was introduced in 2015 to make renewable energy more accessible and economical. This solar power system in India allowed owners to gain extra revenue by selling the excess power generated by their systems to the grid.
This utility billing mechanism essentially calculates the difference between the total energy consumed by the owner and the excess energy exported back to the grid. If the energy generated is more than the energy consumed, the owner earns ”credits” from the electricity distribution company (DISCOM) and is compensated for the same. On the other hand, if the energy consumed is more than the generated amount, the extra energy required is imported from the utility grid, allowing the owner to only pay for the net amount.
Another solar power system in India is gross metering. It does not allow the owner to use the power generated by the solar panels directly. The energy generated is exported directly to the power grid, which, in turn, supplies the power that the solar system owner requires. The owner is compensated at a ”fixed feed-in tariff” for the total energy units generated and exported to the grid.
An extra meter is installed that measures the outflow of electricity (from the solar power system to the grid) while the regular meter records the customer’s consumption. This solar power system in India allows the customer to pay DISCOM at the retail supply tariff for the electricity consumed from the grid.
The feed-in tariff and retail tariff are different rates.
Advantages of net metering
Both these solar energy systems in India are applicable for rooftop and ground-mounted solutions. For the consumer, a power purchase agreement (PPA), a legal agreement between the consumer and DISCOM, is necessary to implement either of these systems.
Here are some of the advantages of net metering –
Extra revenue through credits
As mentioned above, the owner is compensated with ”extra credits” for the excess energy sent back to the grid. It allows them to not only save on their increasing electricity bills but also earn from this system.
Cost-effective and minimum maintenance
Solar panels need little or no maintenance; the only parts that may require maintenance would be the battery and generator. A net metering system allows the owner to eliminate these parts and ensure further savings.
No requirement for battery storage and backup generator
Net metering does not require battery storage systems since the extra energy is stored at the utility grid. The grid also acts as a backup generator; hence, the owner does not have to invest in expensive generators for their solar energy systems.
Advantages of gross metering
Gross metering has several pros and allows the person providing the space for system installation financial benefits.
Utilisation of space
Solar power systems in India can be installed in property spaces to generate electricity for personal use or financial gains. It puts up the space for good use and increases the property value.
The energy generated by the panels is exported to the grid, for which the consumer is compensated. Property owners can gain financial benefits by exporting the entire power generated by the panels at their property.
Nimbus Solar: Driving India ahead
As one of the top players in the industry, Nimbus Solar Solutions has been an active contributor to the ongoing solar revolution in the country. Keeping the customer as the fulcrum of all its activities, the company employees an empowered workforce driven by passion and purpose. Denoting the values of trust, reliability and tremendous experience in the sector, Nimbus Solar is committed to delivering world-class solar power systems in India and services across all businesses. Its strong financial relationships and in-depth knowledge of tax implications facilitate every investor to receive the maximum return from their solar power purchase.
For more details, visit www.nimbussolar.in