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					</table>The Rajasthan Electricity Regulatory Commission (<a href="https://rerc.rajasthan.gov.in/" target="_blank" rel="noopener">RERC</a>) has rejected a petition filed by Shree Cement seeking the grant of a load factor rebate by Jaipur Vidyut Vitran Nigam (JVVNL) for electricity consumption at its Jobner cement unit.
The Commission held that the company&#8217;s captive solar project qualifies as a behind-the-meter installation and is therefore not eligible for load factor computation under the applicable tariff order.
The regulator held that JVVNL had acted in accordance with the regulatory framework while excluding captive solar generation from the load factor calculation.
Background 
Shree Cement operates several cement units across Rajasthan, including a grinding unit at Jobner. The Jobner unit has a contracted demand of 7.40 MVA and is supplied with electricity by JVVNL. Within this unit&#8217;s premises, the company has also installed a 7.08 MW captive solar project, commissioned in March 2023.
For the billing month of December 2024, the Jobner unit consumed over 31.6 million units of electricity. Of this, approximately 23.9 million units were supplied by the distribution company, while around 7.75 million units were met through captive solar generation.
JVVNL computed the load factor solely based on grid-supplied power, resulting in a load factor of about 43%. Based on this calculation, the consumer was billed at a higher applicable tariff.
Shree Cement argued that if captive solar consumption were also included, the combined load factor would exceed 57%. The company relied on a provision in the RERC tariff <a href="https://www.mercomindia.com/rajasthan-sets-%E2%82%B96-50-kwh-base-tariff-for-large-industries-voltage-rebates-stay" target="_blank" rel="noopener">order</a> that allows industries to qualify for a lower tariff if they achieve a minimum load factor of 40% from the distribution company&#8217;s supply and a combined load factor of 50% when captive or rooftop solar consumption is added.
According to the petitioner, JVVNL failed to follow the Commission&#8217;s explicit directions by refusing to consider captive solar generation in the load factor calculation. The company maintained that the tariff order did not distinguish between captive solar projects based on location or metering configuration, and that denying the benefit solely because the project was behind the meter was arbitrary and contrary to the renewable energy promotion objectives.
Shree Cement also noted that its captive solar project was operating in parallel with the grid under a permission granted by the state transmission utility. It argued that this approval established grid connectivity and invalidated the distribution company&#8217;s claim that the project was not connected to the grid.
JVVNL opposed the petition arguing that the dispute was essentially a billing matter between a consumer and a distribution licensee and should have been taken before the consumer grievance redressal mechanism rather than under Section 142 of the Electricity Act.
On merits, the distribution company maintained that the tariff provision cited by the petitioner applied only to grid-connected rooftop solar systems under net metering and to captive solar projects connected to the grid with proper energy accounting and settlement. It stated that Shree Cement&#8217;s solar project was entirely behind the meter, did not export power, did not have net metering, and was not subject to grid-level energy accounting. Therefore, captive generation from such a project would not qualify for a load factor rebate.
The distribution company clarified that permission for parallel operation only allows technical synchronization with the grid and does not automatically entitle a consumer to tariff incentives. It noted that behind-the-meter systems typically attract grid support or parallel operation charges rather than rebates.
Commission’s Analysis
The Commission acknowledged that the tariff order was intended to ensure that power-intensive industries installing rooftop or captive solar projects are not denied concessional tariffs merely because of partial substitution of grid power. However, it emphasized that regulatory benefits linked to tariffs are inseparably connected to metering, energy accounting, and settlement at the grid interface.
It ruled that the transmission utility&#8217;s approval for parallel operation was purely technical. Such approval enables synchronization of captive generation with the grid to ensure system safety and reliability. It does not establish that the project meets the regulatory requirements necessary to be treated as a grid-connected captive generating station for tariff-related incentives.
The Commission observed that the tariff order shows that the load factor rebate was intended for rooftop solar systems operating under net metering and for captive solar projects that are grid-connected, typically through open access arrangements.
It clarified that when regulatory instruments refer to captive solar projects without further qualification, the prevailing interpretation in the sector is that they refer to non-co-located captive projects. If behind-the-meter captive projects were intended to be included, the tariff order would have explicitly stated so, as is done in other regulatory provisions.
The Commission also noted that behind-the-meter systems already enjoy structural advantages, including exemptions from open-access charges, transmission charges, and other grid-related levies.
In contrast, captive projects located elsewhere must bear multiple charges to access the grid. Given this fundamental difference, the two categories cannot be equated for tariff incentives unless the regulations expressly provide otherwise.
The Commission also referred to the broader renewable energy regulatory framework, which clearly distinguishes between grid-connected systems that are metered and energy-accounted and behind-the-meter systems that operate internally within consumer premises. Tariff-linked benefits are generally extended only to the former category, unless explicitly stated otherwise.
Based on this analysis, the regulator concluded that JVVNL was correct in treating Shree Cement&#8217;s solar project as a behind-the-meter installation and excluding its generation from load factor computation.
Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.

RERC Denies Load Factor Rebate for Cement Company’s Captive Solar Project

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					</table>The Uttar Pradesh Electricity Regulatory Commission (<a href="https://www.uperc.org/" target="_blank" rel="noopener">UPERC</a>) recently directed a captive power generator to provide details of the energy that had been procured through open access for the financial year (FY) 2018-19 to FY 2021-22, and the renewable purchase obligation (RPO) compliance report.
The Commission directed the petitioner to purchase the required renewable energy certificates (RECs) from the exchange within three months to fulfill its RPO targets.
Shree Cement had filed a petition to allow the carry forward of RPO compliance requirement for FY 2018-19 to FY 2021-22 due to difficulty in complying with RPO targets of its cement grinding unit in Uttar Pradesh.
Background
Shree Cement is engaged in manufacturing cement and electricity generation. It has its cement manufacturing units in Rajasthan, Uttarakhand, Haryana, Jharkhand, Bihar, Chhattisgarh, Odisha, and Karnataka. It has captive generating units in Karnataka, Rajasthan, and Chhattisgarh.
The petitioner also has a cement grinding unit in Uttar Pradesh, which avails 12.24 MW of power under open access.
Shree Cement said that for FY 2018-19, the solar RPO deficit was due to the limited availability of solar RECs, which resulted in pro-rata allocation. This led to the allocation of a lower number of RECs by the power exchange.
Citing Regulation 5.4 of the UPERC RPO Regulations 2010, the company requested the Commission to allow the carry forward of the deficit from FY 2018-19 to 2021-22. It added that there was genuine difficulty in meeting RPO targets due to the non-availability of power.
Commission’s analysis  
The Commission noted that there was a long delay in filing the petition and wanted to know why no petition was filed during FY 2019-20 and FY 2020-21. It also sought details of the transactions that were made on power exchanges and other open access transactions to determine the RPO of the petitioner.
The petitioner submitted that the Appellate Tribunal for Electricity (APTEL) had <a href="https://mercomindia.com/trading-renewable-energy-certificates-postponed/" target="_blank" rel="noopener">ordered</a> a stay on REC trading in FY 2020-21. It was one of the reasons for the petitioner’s inability to meet its RPO targets. It would be able to clear the deficit by FY 2022-23, it said.
Certain restrictions were also imposed in Karnataka on the sale of renewable power outside the state, which made it difficult to meet the RPO targets. It added that it would purchase the RECs required to meet its RPO requirements by the end of this year.
The Commission directed Shree Cement to provide the complete details of the energy procured through open access and the RPO compliance report.
It asked the captive power generator to purchase the required RECs within three months to meet its RPO targets or attract penalties.
Last June, UPERC <a href="https://mercomindia.com/uttar-pradesh-renewable-purchase-obligation/" target="_blank" rel="noopener">directed</a> Uttar Pradesh Power Corporation (UPPCL) to deposit ₹72.45 billion (~$978 million) in the RPO Regulatory Fund, including ₹14.59 billion (~$197 million) on account of a shortfall in RPO compliance until the FY 2020-21 and ₹57.85 billion (~$780.93 million) against projected RPO requirements for FY 2021-22.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Captive Power Generator Directed to Purchase RECs to Meet RPO Targets

Kolkata-based cement manufacturer <a href="https://www.shreecement.com/" target="_blank" rel="noopener">Shree Cement</a> plans to develop 106 MW of solar power projects to meet the captive power needs of its cement manufacturing facilities at various locations.
The proposed capacity is likely to be added by the quarter ending in September 2022. The company will invest around ₹5 billion (~$67.8 million) to develop these solar projects from internal accruals.
The company aims to maximize clean energy usage for its operation by reducing its carbon footprint and fossil fuel dependence.
Earlier, the company had been successful in <a href="https://mercomindia.com/jharkhand-commission-approves-net-metering/" target="_blank" rel="noopener">securing</a> net metering connectivity for a captive rooftop solar power project of 1.99 MW at a 132 kV voltage supply in Jharkhand.
Large power consumers are leaning towards power procurement from open access solar projects to reduce power costs by going green. Most industrial consumers have opted for the group captive and captive model as their manufacturing facilities do not have enough roof space to generate solar power.
Last year, Orient Cement, a subsidiary of Indian conglomerate CK Birla Group, <a href="https://mercomindia.com/orient-cement-buy-solar-from-ampsolar/" target="_blank" rel="noopener">announced</a> that it would acquire a 26% stake in AMPSolar Systems Private Limited for ₹40.5 million (~$549,244) to set up a 13.5 MW solar project for captive power generation.
In July 2021, Mahindra &amp; Mahindra <a href="https://mercomindia.com/mahindra-mahindra-to-buy-solar-renew/" target="_blank" rel="noopener">signed</a> a power purchase agreement with ReNew Sunlight Energy, a subsidiary of ReNew Green Energy Solutions, to procure solar power from its open access project as a captive consumer.
The renewable purchase obligations (RPO) for industrial consumers are also higher, and procuring power from open access solar projects has become the need of the hour.
However, most states have <a href="https://mercomindia.com/multi-year-tariffs-crucial-open-access-solar/" target="_blank" rel="noopener">revised</a> the annual open access charges through one-year tariff orders, leaving these charges unpredictable beyond a year. Open access developers <a href="https://mercomindia.com/uniform-stable-policies-open-access/" target="_blank" rel="noopener">believe</a> that uniform regulations across states, long-term policies without retroactive changes are necessary for the market to scale.
According to Mercom’s <a href="https://mercomindia.com/open-access-solar-projects-q1-2021/" target="_blank" rel="noopener">India Open Access Solar Market India Update Q1 2021</a>, open access solar installations stood at 419 MW in India in the first quarter of 2021, while the cumulative solar installations in the open access market have reached 4.3 GW as of March 2021.
The open access project pipeline under development and pre-construction is estimated to be over 1 GW.

Shree Cement to Develop 106 MW of Solar Projects to Meet its Captive Power Needs

The Haryana Electricity Regulatory Commission (<a href="https://herc.gov.in/" target="_blank" rel="noopener noreferrer">HERC</a>) dismissed the petition filed by <a href="https://www.shreecement.com/" target="_blank" rel="noopener noreferrer">Shree Cement Limited</a> and said that the net metering facility would not be provided to open access consumers.
Earlier, Shree Cements had filed a petition before the Commission for permitting the use of both net metering facility and open access.
Background
Shree Cement Limited had applied to set up a 999 kW rooftop solar power project with a net metering facility at its cement production unit at Assan Kalan in Panipat district of Haryana.
The Uttar Haryana Bijli Vitran Nigam Limited (<a href="https://www.uhbvn.org.in/web/portal/home" target="_blank" rel="noopener noreferrer">UHBVN</a>) had executed a net metering connection agreement with Shree Cement on April 09, 2019.
Shree Cement is also an open access consumer and purchases power from the Indian Energy Exchange (IEX) under open access to meet part of its power requirement.
In its submission, Shree Cement said that if any person whose premises is situated within the supply of a distribution licensee requires open access, he should be allowed non-discriminatory open access as per the Commission’s regulations.
Under net metering, the solar rooftop capacity that a consumer can install at its premises is capped at 1 MW. Taking this into account, the petition argued that, on the one hand, the net metering regulations do not let the consumer install solar system equivalent to its total requirement. On the other hand, it also deprives it of taking up the open access facility.
Shree Cement noted that it would be justifiable to limit the capacity of open access (to the extent of solar capacity installed) on the grounds of technical limitations. However, the denial of open access in totality is not correct and goes against the provisions of the Electricity Act 2003, the petition noted.
The state distribution company, on the other hand, called the petition untenable. As per the net metering regulations, the petitioner may enter into a power purchase agreement with the licensee or go for third party sale, it argued.
The DISCOM further added that currently, the petitioner is getting power from two sources &#8211; open access and DISCOM. If the net metering facility is allowed to an open access consumer, then the consumer would be getting power from three sources, which will lead to complexity in grid security, energy accounting, and billing.
After hearing all stakeholders and considering the merits of the matter, the Commission decided not to provide the facility of net metering to open access consumers, as it would go against the provisions laid out by the state Commission.
Recently, Mercom <a href="https://mercomindia.com/haryana-waives-backlog-surcharges-open-access/" target="_blank" rel="noopener noreferrer">reported</a> that Haryana imposed an additional surcharge on the purchase of open access power. The open access segment in India has remained underutilized on account of inconsistent and unsupportive state policies. Read all about India’s solar open access segment <a href="https://mercomindia.com/adoption-solar-open-access-roadblocks/">here</a>.
The total installed solar capacity in the open access market reached 3.6 GW at the end of the calendar year 2019. The pipeline of projects under development and in the pre-construction phase is estimated to be approximately 1.5 GW, according to Mercom India Research’s report released in March –  <a href="https://mercomindia.com/product/open-access-solar-market-india-key-states/" target="_blank" rel="noopener noreferrer">Open Access Solar Market in India – Key States</a>.

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