Gujarat Allows up to 4 MW Distributed RE Systems Under New Rules
Gujarat has notified new regulations allowing grid-connected distributed renewable energy systems of up to 4 MW AC under five metering arrangements – net metering, net billing, gross metering, group net metering and virtual net metering, with provisions for BESS, energy settlement and grid connectivity.
November 02, 2026. By Mrinmoy Dey
Notified on October 30, 2026, under Notification No. 11 of 2026, the regulations replace the 2016 rooftop solar net metering regulations and their subsequent amendments.
The new framework allows consumers across categories to install DRES under net metering, net billing, gross metering, group net metering and virtual net metering arrangements. Capacity limits range from 1 kW to 1,000 kW AC under net metering and net billing, 6 kW to 4,000 kW AC under gross metering, 6 kW to 1,000 kW AC under group net metering and 10 kW to 4,000 kW AC under virtual net metering, subject to technical feasibility and connectivity requirements.
The regulations introduce battery energy storage system (BESS) requirements for certain installations. Consumers with contracted demand above 100 kW installing DRES capacity beyond their contracted demand under net metering, net billing or group net metering must provide BESS with at least two hours of daily charging and discharging capability for 50 percent of the excess capacity. Similar provisions apply to non-residential consumers under virtual net metering when installed capacity exceeds the aggregate contracted demand of participating consumers.
GERC has prescribed separate energy accounting and settlement mechanisms for each metering arrangement. Under net metering, residential consumers can adjust their entire exported energy against imports without banking charges. Surplus energy will be purchased by the distribution licensee at INR 2.25/kWh or another rate determined by the Commission. For non-residential consumers, adjustment is capped at 30 percent of electricity drawn during the billing cycle, subject to banking charges, with unused excess energy lapsing.
Under net billing, self-generated electricity will be used for consumption first, while exported energy will be credited at the applicable generic tariff determined by GERC. Under gross metering, the entire generation will be injected into the grid and settled at the applicable generic tariff, while consumer imports will be billed at the retail tariff.
For group and virtual net metering, exported energy will be allocated among participating consumers based on agreed allocation ratios after accounting for wheeling losses. Energy accounting will operate on a 15-minute time-block basis. Residential consumers will be eligible for adjustment of their entire allocated energy without banking charges, while non-residential consumers will face the 30 percent adjustment limit and applicable banking charges.
The regulations also prescribe wheeling charges, losses, banking charges, cross-subsidy surcharge (CSS) and additional surcharge (AS), wherever applicable. Consumers installing self-owned or RESCO-owned systems on their premises under net metering, net billing or gross metering will be exempt from wheeling charges and losses. Residential consumers receiving power from RESCO-owned DRES with allocated capacity of up to 3 kW per connection will be exempt from CSS and AS. A 25 percent concession in CSS and AS will be available to consumers, allowing distribution licensees to use their renewable energy attributes for renewable purchase obligation (RPO) compliance.
GERC has directed distribution licensees to prepare implementation guidelines and standard operating procedures and obtain Commission approval within three months. They must also establish an online application portal within three months and submit software-based energy accounting and settlement procedures for approval within five months.
The regulations prescribe timelines for approvals and project implementation, including three days for technical feasibility processing and 10 days for field technical feasibility reports. Distribution licensees must complete required distribution system strengthening within 15 days of receiving connectivity fees and executing the connectivity agreement. Consumers must generally complete project work within six months of connectivity approval. Delays attributable to distribution licensees will attract compensation of at least INR 500 per day.
Connectivity fees have been fixed at INR 1,500 per connection for capacities from 1 kW to 6 kW, INR 10,000 for capacities above 6 kW up to 100 kW, and INR 50,000 for capacities above 100 kW, subject to the applicable capacity category. Infrastructure strengthening costs for systems up to 6 kW will be included in the distribution licensees' annual revenue requirement, while consumers will bear applicable charges for larger systems.
The regulations also allow DRES owners and consumers to retain 100 percent of gross proceeds from carbon credit benefits without sharing them with distribution licensees. Systems above 1 MW must install remote terminal units (RTUs), while systems below 1 MW must provide SIM-based remote monitoring integrated with a centralised platform.
GERC has further provided for the possibility of peer-to-peer transactions involving surplus DRES electricity through a secure accounting and billing mechanism.
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