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					</table>The Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) has expanded net metering for distributed solar photovoltaic (DSPV) projects to all consumer categories and raised the maximum permissible capacity to 1 MW from the 500 kW <a href="https://www.mercomindia.com/karnataka-proposes-new-regulations-for-distributed-solar-projects" target="_blank" rel="noopener">proposed </a>in its draft regulations.
The Commission has also dropped its proposal to mandate energy storage for solar projects above 10 kW, making battery storage optional under the final KERC (Grid Interactive Distributed Solar Photovoltaic Plants) Regulations, 2026.
Net Metering Expanded
All consumer categories can now install DSPV projects under net metering. Projects must have a minimum capacity of 1 kW, while the maximum capacity is the consumer&#8217;s approved load or contracted demand, or 1 MW, whichever is lower.
The draft had proposed a maximum net metering capacity of 500 kW and restricted eligibility to specified consumer categories.
The expanded net metering provisions will remain in force until the cumulative installed capacity of projects under net metering, virtual net metering (VNM), and group net metering (GNM) reaches 3 GW in Karnataka.
Distribution companies must publish monthly data on cumulative approved and commissioned DSPV and solar photovoltaic capacities. Karnataka Renewable Energy Development Limited must consolidate and publish statewide data every month.
The final regulations also allow net metering consumers to switch to net billing, gross metering, or behind-the-meter arrangements once during the project&#8217;s life.
Mandatory Storage Dropped
KERC has removed the mandatory energy storage mandate for certain distributed solar installations.
The draft regulations had proposed that DSPV and solar projects above 10 kW, except behind-the-meter systems, must install energy storage equivalent to at least 20% of their generation potential.
Under the final regulations, consumers can instead opt to use hybrid grid-tied inverters with batteries and utilize stored electricity for self-consumption.
KERC will review the requirement for distributed energy storage at the prosumer level two years after the regulations are notified or when the cumulative installed capacity under net metering, VNM, and GNM reaches 3 GW.
Net Billing
The Commission has also relaxed capacity restrictions for net billing.
While the draft proposed capping DSPV capacity under net billing at the sanctioned load, contracted demand, or 500 kW, whichever was lower, the final regulations remove the 500 kW ceiling. Projects can now be installed up to the consumer&#8217;s sanctioned load or contracted demand. The new regulations also opened net billing to all consumer categories.
Gross metering will also available to all consumer categories for projects from 1 kW up to the sanctioned load or contracted demand.
Eligible consumers under the net metering, gross metering, or net billing mechanisms may install a DSPV plant with a capacity of up to and including 10 kW of sanctioned load. A tolerance of up to 10% is permitted for the applied DC system capacity, provided the inverter’s AC capacity does not exceed the sanctioned load.
Group and Virtual Net Metering
All consumer categories are eligible for GNM, provided the participating service connections are in the same consumer&#8217;s name and belong to the same consumer category.  Such consumers must also be within the same area of supply of the DISCOM.
GNM projects must have a minimum capacity of 5 kW and cannot exceed the combined approved load or contracted demand of participating connections.
VNM is available to domestic consumers, residential apartments, group housing societies, charitable institutions and organizations, government and municipal bodies, government buildings, schools, and buildings belonging to local authorities. VNM projects can range from 5 kW to the consumer&#8217;s approved load.
VNM consumers must install smart meters at their cost at both the generation point and the consumer end.
The distribution licensee will purchase surplus electricity remaining under GNM and VNM at the end of a billing month at 75% of the applicable generic DSPV tariff.
Both arrangements are subject to applicable open access charges. However, consumers are exempt when the electricity is generated and consumed within the same distribution transformer or 11 kV feeder.
Behind-the-Meter
The regulations allow all consumer categories to install behind-the-meter systems without a minimum capacity requirement.
Consumers can install solar capacity above their approved load or contracted demand if suitable generation, storage, or inverter systems enable islanded operation.
Facade-integrated solar panels on the walls of the building, solar panels of mono-facial/ bi-facial or any new solar technology on the rooftop or on one elevated structure can be installed with an eight-foot ground clearance at the lowest point. The eight-foot ground clearance for solar projects on elevated structures does not apply to BTM projects installed for captive consumption.
KERC has retained the provision allowing it to impose grid support charges in future to recover costs associated with energy storage, grid balancing, and facilitating electricity injection into the grid.
Faster Project Approvals
The final regulations simplify procedures for smaller projects.
A separate power purchase agreement (PPA) is not required for low-tension consumers with projects up to and including 150 kW. Submission of an online application will be deemed approval to commence work. The distribution licensee must inspect and commission the project within five working days after receiving the report.
For projects delayed by more than six months, the applicable tariff will be the lowest of the tariff agreed in the application or PPA, the revised tariff prevailing at commissioning, or 90% of the originally agreed tariff.
The Commission clarified that power purchased by DISCOMs under gross metering, net metering, net billing, VNM and GNM will qualify toward compliance with their Renewable Purchase Obligation or Renewable Consumption Obligation.
Recently, KERC <a href="https://www.mercomindia.com/karnataka-cuts-generic-tariff-for-pm-surya-ghar-projects" target="_blank" rel="noopener">approved</a> a tariff of ₹1.96 (~$0.0205)/kWh for rooftop solar systems from 1 kW to 2 kW under the PM Surya Ghar program,; ₹2.14 (~$0.0224)/kWh for systems above 2 kW and up to 3 kW; and ₹2.58 (~$0.0269)/kWh for systems above 3 kW.

Karnataka Expands Net Metering to 1 MW, Drops Mandatory Storage Proposal

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					</table>The Jaipur Vidyut Vitran Nigam (<a href="https://www.bijlimitra.com/custumerLoginPage" target="_blank" rel="noopener">JVVNL</a>) has filed a petition before the Rajasthan Electricity Regulatory Commission (<a href="https://rerc.rajasthan.gov.in/" target="_blank" rel="noopener">RERC</a>) to allow virtual net metering (VNM) and group net metering (GNM) in the state.
The petition, filed on behalf of Ajmer Vidyut Vitran Nigam (AVVNL) and Jodhpur Vidyut Vitran Nigam (<a href="https://jdvvnl.bijlimitra.com/jdvvnlmitra/custumerLoginPage" target="_blank" rel="noopener">JdVVNL</a>), seeks amendments to the RERC’s Grid-Interactive Distributed Renewable Energy Generating Systems (DREGS) Regulations, 2021.
The existing regulations currently <a href="https://www.mercomindia.com/rajasthan-waives-charges-domestic-rooftop-solar" target="_blank" rel="noopener">cover</a> net metering, net billing, and grid-connected renewable energy systems operating behind the meter, but do not provide for VNM and GNM arrangements.
National Policy Alignment
The Government of India issued operational guidelines for the payment security mechanism and central financial assistance, applicable to the renewable energy service company (RESCO) models and utility-led aggregation models under the PM Surya Ghar: Muft Bijli Yojana.
The RERC DREGS Regulations, 2021, already provide for the RESCO models, but do not currently allow VNM and GNM, which are critical for implementing utility-led aggregator models. Other state electricity regulatory commissions, including those of Delhi, Odisha, Maharashtra, and Assam, have already notified enabling provisions for these mechanisms. The Rajasthan distribution companies (DISCOMs) are seeking to align the state regulations with these national and inter-state practices.
Rationale for Amendments
According to the petitioners, the introduction of VNM and GNM will allow broader participation of both government institutions and domestic consumers in rooftop solar adoption. Rajasthan has over 100,378 government electricity connections with a cumulative sanctioned load of 1.19 GW.
At the same time, government departments have accumulated significant unpaid electricity bills, with outstanding dues amounting to ₹15.05 billion (~$179 million) as of May 31, 2025. This has placed financial stress on the DISCOMs, which are forced to resort to high-cost borrowing to maintain operations.
The Rajasthan government has already directed 100% rooftop solar coverage of state government buildings through an order dated February 1, 2024, with the Rajasthan Renewable Energy Corporation designated as the nodal agency.
Proposed Regulatory Provisions
The DISCOMS have proposed that VNM and GNM eligibility be extended only to domestic category consumers and government connections.
For domestic consumers, the maximum sanctioned load under this mechanism will be capped at 10 kW, while no such cap is proposed for government connections. The maximum capacity of individual renewable energy systems under VNM or GNM will be capped at 1 MW.
All applications from government connections will require a mandatory technical feasibility study. In contrast, domestic consumers with a capacity of up to 10 kW will continue to be exempt from such studies, except in VNM and GNM applications.
The petition proposes that government connections opting for VNM or GNM under RESCO mode must pay 50% of the cross-subsidy and additional surcharge. Additionally, 100% wheeling charges must be levied at the 11 kV level or the respective voltage level, based on the sanctioned load, until low tension-level wheeling charges are defined.
Wheeling Charges and BESS
The petition also incorporates incentives for integrating battery energy storage systems (BESS). A 75% waiver on wheeling charges is requested for systems with at least 5% of solar capacity supported by BESS. For higher storage capacities, an additional 1% waiver was requested for every 1% increase in BESS capacity, up to a maximum of 30%.
Systems with BESS capacities exceeding 30% of solar will be eligible for a complete 100% waiver of wheeling charges. The petitioners contended that the proposal aligns with the Government of India’s advisory dated February 18, 2025, which recommends integrating storage with rooftop solar systems to enhance supply reliability.
The petition further states that wheeling losses will be applied based on the voltage level of energy drawal. For low-tension (LT) consumers, approved distribution losses will be applied until specific LT-level wheeling losses are determined.
This approach follows practices adopted in other states, such as Madhya Pradesh, where voltage-wise losses are applied. In contrast, Maharashtra has exempted VNM and GNM connections till the capacity of rooftop solar reaches 5,000 MW.
Financial Implications
The DISCOMs emphasized that government non-payment of electricity bills has created a financial liability of ₹15.05 billion (~$179 million) as of May 31, 2025. This liability compels them to take high-cost loans, which ultimately increases the tariff burden on all consumer categories.
The solarization of government connections through VNM and GNM will reduce reliance on grid purchases for these consumers, lower their bills, and release the DISCOMs from recurring financial strain. Moreover, the surplus solar power generated by government buildings can help optimize state-level power purchase costs.
The proposed levy of partial surcharges and wheeling charges on government connections is intended to allow recovery of infrastructure costs while still incentivizing adoption of rooftop solar.
Recently, RERC <a href="https://www.mercomindia.com/rajasthan-regulator-approves-tariffs-for-488-mw-solar-projects-under-kusum" target="_blank" rel="noopener">approved</a> JdVVNL’s tariffs ranging from ₹2.68 (~$0.030)/kWh to ₹3.66 (~$0.041)/kWh for solar projects with a cumulative capacity of 488 MW to be set up across Rajasthan under Component – C of the Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) program.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

DISCOMs Move RERC to Allow Virtual and Group Net Metering in Rajasthan

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