Kerala Exempts Duty on Solar Power Generation

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Kerala Exempts Duty on Solar Power Generation

This decision comes just a day after the Kerala State Electricity Regulatory Commission (KSERC) increased the rate paid for solar energy sold to the grid.

The Kerala government has announced an exemption on energy duty for solar power generation to encourage increased adoption of solar energy. This decision comes just a day after the Kerala State Electricity Regulatory Commission (KSERC) increased the rate paid for solar energy sold to the grid.

This policy shift follows criticism from residents who installed solar panels at home. The initial budget proposal to hike energy duty on all self-generated power threatened to negate the benefits of solar adoption. Finance Minister K.N. Balagopal confirmed the solar power exemption during the assembly session.

Increased Rates for Domestic Solar Power Producers

The KSERC also announced a revised rate for solar power producers. The new rate of ₹3.15 per unit reflects the Average Pooled Power Purchase Cost and represents a 46 paise per unit increase for home-generated solar energy. This revised rate applies retroactively from April 2023, ensuring fair compensation for past contributions.

The revised policy addresses concerns raised by producers regarding the payment structure for solar energy. Previously, producers felt they received a lower price for electricity sold to the grid than the cost of using grid power for their remaining needs. This “dual payment system” resulted in higher overall electricity bills for some producers.

The Kerala government’s exemption on energy duty and the KSERC’s revised rate structure combine to create a more attractive environment for solar power generation in the state. They are expected to encourage greater adoption of solar energy.

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