Karnataka Overhauls Rooftop Solar Policy with DSPV Reforms and Flexible Net Metering

In a sweeping policy update aimed at boosting renewable energy adoption, the Karnataka Electricity Regulatory Commission (KERC) has introduced a host of reforms that reframe how rooftop solar is regulated, priced, and approved.

Effective from July 1, 2025, the reforms rebrand traditional rooftop solar systems as Distributed Solar PV (DSPV) and open the door to more flexible installation and metering options for both residential and institutional users.

As per the Commission, "The installation of SRTPV under net metering/gross metering arrangements, is not just limited to Roof of the buildings but now extended to ground mounted Distributed Solar PV projects with elevated Structures, facade integrated solar panels on the walls within the premises and also VNM & GNM. Hence, the Commission decides to rename 'Solar Roof Top PV (SRTPV) plants' as 'Distributed Solar PV (DSPV) Plants' with net metering/gross metering arrangements, applicable from the date of the effect of this Order."

Under the revised guidelines, DSPV systems can now be installed on elevated ground structures with a minimum height of 8 feet or integrated as solar facades on vertical building walls. All such installations must comply with local building bylaws and electrical safety standards. The aim is to unlock new surfaces for solar deployment in dense urban environments and commercial properties where rooftop space may be constrained.

It further noted that the new VNM and GNM models are designed to 'democratise solar access,' especially for consumers who previously lacked viable rooftop space.

The most significant change comes in the form of two new net metering models: Virtual Net Metering (VNM) and Group Net Metering (GNM). VNM will allow groups of consumers, such as residents of housing societies, government buildings, or institutions, to share electricity generated from a single solar plant with a minimum capacity of 5 kW.

Any surplus power exported to the grid will be purchased by distribution companies at 75 percent of the applicable generic tariff. GNM, on the other hand, lets individual consumers offset electricity usage across multiple self-owned connections, provided at least 20 percent of the generated power is consumed at the point of generation. Open access charges will be waived if energy is consumed within the same transformer or feeder network, further lowering the cost for participants.

Tariffs have been revised to reflect the new categories. Ground-mounted megawatt-scale projects will receive a fixed tariff of INR 3.07 per unit, while DSPV systems with sanctioned loads of at least 1 kW will be compensated at INR 3.08 per unit, excluding domestic systems between 1 and 10 kW. For domestic DSPV systems within the 1–10 kW range, the tariff is higher at INR 3.86 per unit, reflecting the added cost of smaller installations and lack of subsidy. For systems installed under the PM Surya Ghar Muft Bijli Yojana, subsidized tariffs have been fixed: INR 2.30 per unit for 1–2 kW, INR 2.48 for 2–3 kW, and INR 2.93 for systems above 3 kW. These rates apply to all projects commissioned between July 1, 2025, and June 30, 2026, and will be locked in for 25 years from the date of commissioning.

To ease adoption further, KERC has removed the requirement of signing a Power Purchase Agreement (PPA) for low-tension domestic consumers up to 150 kW. The terms and conditions will instead be integrated directly into the online application portal, which is now mandatory for all solar-related submissions. To ensure accountability, discoms will face a INR 1,000 per day penalty for failing to meet specified application processing timelines.

Open access consumers now have the choice of net or gross metering, though any surplus energy exported to the grid under open access will be absorbed by discoms at zero cost, a move that could have implications for commercial producers but aims to prioritise grid stability.

Among other key consumer-friendly decisions, KERC has rejected proposals to make battery storage systems mandatory, citing cost concerns. Instead, consumers have the option to install smart meters or retrofit their existing meters with communication modules. Additionally, solar plants may now be relocated within the same discom jurisdiction without renegotiating PPAs, giving consumers added flexibility.

These reforms are expected to significantly impact the state’s solar energy landscape. As of now, Karnataka has around 5,666 MW of ground-mounted solar capacity but only 755 MW of rooftop solar installed. By simplifying rules and expanding deployment models, the Commission hopes to close this gap and make solar energy more accessible to urban households and institutions alike.

Looking ahead, discoms such as BESCOM are required to finalise VNM and GNM agreements within 15 days of receiving applications. Meanwhile, all online portals must be updated to reflect the new procedures and facilitate a smoother user experience.

With these changes, Karnataka is positioning itself to lead the next phase of decentralized solar energy growth in India, promoting clean energy adoption while cutting down red tape for consumers.