Sri Lanka is making plans to pay power users with rooftop solar panels, going beyond the current system of net metering where excess power will be bought by the state-run Ceylon Electricity Board through 20-year contracts.

At the moment, Sri Lanka's Ceylon Electricity Board has a 'net metering ' system where power produced by rooftop solar panels are deducted from the total bill owed to the utility.

Any excess power, however, is not settled in cash but is carried forward for up to 10 years.

The cabinet of ministers has now approved a proposal to pay users for excess power generated under a 20-year contract.

Under a 'net accounting' system, customers with solar panels will be paid Rs22.00 per unit during the first 7 years for excess power supplied to the grid. From year 8, they will be paid Rs15.50 per unit.

However, if the customer draws power from the grid, he will be charged on the existing tariff.

Under another proposal (net plus), there will be no link between power generated and used. The customer will be paid for all excess power supplied to the grid. He will then pay at the existing tariffs for all power consumed.

The current 'net metering' system is targeted at high-user customers. The regulator has imposed a Rs45 charge per kiloWatt hour, far in excess of the cost on larger customers who consume more than 180 units, making it viable for solar power companies to sell their products to power customers.

The high tariff - perhaps the highest in the world - was imposed supposedly to cross subsidize small users who were sold power below cost. But instead of going to the utility, the money has flowed to solar power companies who supplied the systems through net metering.

The CEB now has to produce peak power in the night to supply households, while getting power in the daytime for which it has to pay.

About 30MW of such rooftop capacity has now been installed.

The new plans will encourage smaller users to buy solar panels.

The state is expected to encourage a credit facility to make it easy for solar firms to get customers.

Solar power, although expensive, is eco-friendly. 

Net metering also breaks the current monopoly on power generation kept by the state. Under Sri Lanka's law, it is illegal for two neighbours to get tighter and produce their own power. 

(ECONOMYNEXT)