Renewable sources of energy, such as solar energy, are a cleaner and more sustainable replacement for other conventional sources of energy. Several factors like considerable price drop as well as government policies and incentives have encouraged more organisations to invest in solar power systems across the country. Since it is expensive to store electricity, the solar plants are connected to the power grid, where the excess, unconsumed electricity is exported.
While designing the regulations for these solar power systems, the government usually defines 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 the renewable energy more accessible and economical and also give solar power system owners the opportunity to gain extra revenue by selling their excess power to the grid. This utility billing machanism essentially calculates the difference between the total energy consumed by the owner and the excess energy exported back to the grid. If the amount of energy generated is more than the amount of energy consumed, the owner earns ‘credits’ from the electricity distribution company (DISCOM) and is compensated for the excess energy. On the other hand, if the amount of energy consumed is more than the amount of energy generated, the shortage is imported from the utility grid, allowing the owner to only pay for the net amount.
Gross metering does not allow your premises to directly use the power that is generated by the solar panels. It is exported entirely to the power grid, which, in turn, supplies the power that is required. The owner is compensated at a ‘fixed feed-in tariff’ for the total units of energy that is generated and exported to the grid. An extra meter measures the outflow of electricity (from the solar power system to the grid) while the regular meter records the consumption of the customer. The customer has to pay DISCOM at 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 systems are applicable for rooftop solar systems as well as ground-mounted ones. For the consumer, a power purchase agreement (PPA), which is a legal agreement between the consumer and the DISCOM, is necessary for the implementation of either of these systems.
Let’s elucidate some of the advantages of net metering –
Extra revenue through credits
If the amount of energy generated by their solar system is more than the amount of energy they consume, the owner is compensated with ‘extra credits’ for the excess energy sent back to the grid.
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. 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.
Nimbus Solar: Driving India ahead
As one of the top players in the industry, Nimbus Solar Solutions has been an active contributor in the on-going Solar Revolution in the country. Keeping the customer as the fulcrum of all its activities, the company boasts of 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 services and products across all businesses. Its strong financial relationships and in-depth knowledge of tax implications facilitate every investor to receive the maximum return from their investment in solar power.
For more details, visit www.nimbussolar.in