No energy duty on solar power generation in Kerala

The decision comes in the wake of numerous complaints from producers about higher electricity bills and lesser charges for the solar power sold to the grid.
Image used for representation.
Image used for representation.

THIRUVANANTHAPURAM: In a major move to support a generation of solar energy in the state, the government has decided to exempt solar power from energy duty on power production. The decision comes a day after the Kerala State Electricity Regulatory Commission (KSERC) increased the rate of solar energy generated at home and sold to the electricity board.

Finance Minister K N Balagopal announced the decision on the exemption for solar power generation in the assembly on Tuesday while replying to the discussion over the motion to refer the Kerala Finance Bill 2024 to the subject committee.

The state government had in this year’s budget announced that the energy duty on own power production will be hiked from 1.2 paise to 15 paise. The move was expected to mobilise about Rs 24 crore. However, the government decision invited wide criticism as it affected people who set up solar power panels at houses. The minister said the exemption for solar power generation will be made during the subject committee’s examination of the Bill.

In a move intended to support solar energy producers in the state, the KSERC had on Monday fixed Rs 3.15 per unit as the rate — Average Pooled Power Purchase Cost — payable to solar power producers for settling the surplus energy for the period ending on March 31, 2024.

The new rate will see an additional 46 paise per unit being paid for home-generated solar energy. Previously, the rate was Rs 2.69 per unit. The increased rate, which will have a retrospective effect from April 2023, ensures that producers are compensated fairly for their contributions over the past year.

The decision comes in the wake of numerous complaints from producers about higher electricity bills and lesser charges for the solar power sold to the grid.

One of the main points of disagreement has been the payment structure for solar energy. The solar power producers were of the view that they get a raw deal when the power generated at homes is supplied to KSEB’s grids after domestic consumption.

Additionally, those who have installed solar panels have to pay the tariff amount to KSEB for the electricity used directly. This dual payment system led to higher electricity rates for producers.

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