For years households were encouraged to spend their own money putting solar panels on their roofs, partly on the promise that generating electricity could dramatically reduce their monthly bills. New installations will now operate under Net Plus instead. The panels can still generate electricity. What has changed is the economics for the person who paid for them.
There was something particularly attractive about rooftop solar as public policy.
The State needed more renewable electricity. Instead of the Government finding all the capital itself, thousands of households and businesses were prepared to invest their own money, put generating equipment on their own property and feed electricity into the national system.
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For the consumer, the attraction was equally straightforward. Generate electricity during the day, offset electricity consumption and reduce the monthly bill.
Sri Lanka has now changed an important part of that arrangement for new installations.
Net Metering and Net Accounting will no longer be offered for new rooftop solar systems connected after the new policy took effect. New customers will instead enter the Net Plus system. Existing agreements continue under their present arrangements until they expire.
That sounds like an obscure change in electricity terminology.
For somebody considering spending around Rs 1 million on a domestic solar installation, it is anything but obscure.
Under Net Plus, the electricity generated by the rooftop system is effectively treated separately from the electricity consumed by the household. The generated electricity goes to the grid and the owner receives the applicable payment for it. Electricity consumed by the household is billed separately under the normal tariff structure.
The roof has therefore become, in effect, a tiny generating station.
The problem is that a household does not live like a generating station.
It may consume substantial electricity at night. It may charge an electric vehicle. Air-conditioning, appliances and other household demand can push consumption into expensive tariff bands. The solar system may be producing electricity during daylight hours, but under Net Plus that generation no longer simply cancels the household’s consumption in the way many consumers understood rooftop solar to work.
The Government has an argument of its own.
Solar electricity arrives abundantly during daylight hours. Demand does not conveniently disappear when the sun sets. Without sufficient storage, the electricity system can find itself with plentiful solar generation during the day and then needing more expensive generation to meet evening demand.
That is a genuine engineering and economic problem.
The answer increasingly lies in storage. Batteries can capture cheap daytime electricity and release it when demand rises after sunset. Sri Lanka is consequently moving towards battery energy storage, and authorities are considering measures intended to make storage more attractive.
But that still leaves a policy question.
Who should carry the cost of the transition?
Thousands of Sri Lankans responded to years of encouragement to invest in rooftop solar. The proposition was powerful precisely because it aligned private interest with national interest. The homeowner wanted a lower electricity bill; the country wanted more renewable generation.
Changing the financial equation risks weakening that alignment.
The issue becomes even more important as electric vehicles increase. A household may reasonably imagine that owning both solar panels and an electric vehicle creates an elegant energy loop: sunshine on the roof eventually powers the car.
Under a system in which generation and consumption are separately priced, that calculation becomes considerably more complicated.
This does not necessarily mean Net Plus is bad policy. Electricity grids must remain stable, and the cost of balancing intermittent renewable generation cannot simply be wished away.
But neither should the discussion be reduced to engineers explaining why the grid requires change.
Consumers require an explanation too.
If a family is being asked to invest perhaps Rs 1 million of its own capital in equipment that contributes to a national renewable-energy target, it is entitled to know the likely return, the payback period and what happens if tariffs or policy change again.
Sri Lanka still wants renewable electricity. It still wants private investment. It still wants less dependence upon imported fuel.
The question is whether the new arrangement gives an ordinary householder sufficient reason to keep supplying all three.
Because governments can set renewable-energy targets. They cannot order homeowners to spend their savings achieving them.
