Thiruvananthapuram: The Kerala State Electricity Regulatory Commission (KSERC) has rejected a demand by rooftop solar power prosumers (producer-cum-consumers) to increase the payment for surplus electricity supplied to the grid to Rs 4.34 per unit. The Commission also dismissed a petition seeking a hike, alleging that the Rs 3.26 per unit rate fixed for 2023-24 was contrary to regulations.

Under Kerala's net metering system, the Kerala State Electricity Board (KSEB) pays consumers with rooftop solar installations for surplus electricity supplied to the grid after deducting their own consumption. The tariff for such surplus power is determined annually by the KSERC.

As per the regulations, prosumers are entitled to receive the average price paid by KSEB for purchasing electricity from external sources during the relevant year. However, in 2023-24, KSEB's average procurement cost rose to Rs 4.34 per unit due to lower rainfall and the cancellation of long-term power purchase agreements, forcing it to buy electricity at higher prices.

The Commission declined to match the higher procurement cost and instead revised the previous year's tariff from Rs 3.15 per unit to Rs 3.26 per unit, taking inflation into account.

Challenging the decision, petitioners James Kutty Thomas, V. Suresh Kumar, Mohan Varghese and Sabu T. Kumbalakkal approached the Commission, arguing that the lower rate was unfair.

The Commission reiterated that the spike in procurement costs resulted from exceptional circumstances and could not be used as the basis for fixing the rate for surplus solar power. KSEB also opposed the demand, arguing that it was unreasonable to pay prosumers such a high rate when electricity is often available during the day for less than Rs 2 per unit.

For 2024-25, the Commission introduced new regulations governing surplus solar power and fixed the payable rate at Rs 3.60 per unit. However, prosumers challenged the decision before the Kerala High Court, which has stayed its implementation. As a result, payments for surplus electricity supplied during the last financial year remain uncertain.

Also read: Kerala faces electricity crunch: KSEB seeks extended central power allocation 

Commission clears second SECI power purchase agreement

In a separate decision, the Commission approved KSEB's second power purchase agreement with the Solar Energy Corporation of India (SECI) for the procurement of 200 MW of solar power.

The agreement provides for 100 MW of power with a four-hour energy storage system during the night at a tariff of Rs 2.86 per unit. Although Kerala often has surplus electricity during the day, KSEB opted for the agreement as it would ensure a lower-cost power supply during night-time hours.

Power under the agreement is expected to be available from June 2028.

KSEB had earlier signed an agreement to procure 500 MW of power from SECI at Rs 3.49 per unit, with supply scheduled to begin in September this year. However, the commencement of that project remains uncertain.