Net Metering – Solar Roof Top Solution

Outline Current Context Current situation of existing solar system What is the current energy scenario and where the opportunities are Current situation of existing solar system Many stranded solar rooftops that are not utilized Potential of solar rooftop What is the potential of solar rooftop in Kathmandu Support Required from government level How can government support to scale on grid solar Financing and Incentivization Innovative financing and incentive models/structure Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Present Situation

Current Context Reliable Grid Supply Stranded Solar Rooftops Increasing Cost of Electricity Grid supply has improved a lot in recent times. There is almost no power outages Almost 50MW in roof top solar are stranded in Kathmandu alone due to end of load shedding With improved supply and high cost of import from India the cost of electricity is on the rise Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Solar as back-up In recent years, urban Nepal adopted solar powered battery back-up energy solution The solution was a direct result of long hours of load shedding. There is an estimated 20-30 MW of roof top solar installed in Kathmandu Valley alone Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Stranded Roof Top Solar In the current context of reliable grid supply, the solar roof tops that were installed are all stranded Some customers are utilizing their solar by manually managing the grid and solar There is a huge potential to bring these stranded system on to the main grid Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Size of Existing Stranded Systems Majority of stranded systems are less than 500W Easy hanging fruits are bigger systems, we should be able to bring them to the grid without much fuss 50 MW Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Grid Connection 50MW Can be grid connected within a year Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid. Innovation in models and effort will be required to get them grid connected, will take longer

The Big Potential for Roof Top Net Metering Solution

Kathmandu Valley Potential Number of roof tops 500,000 Average size of roof tops 684 sq. feet Potential size of each system 5kW Total potential 2,500 MW Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid. Even if 10% of the households adopt the technology in next 5 years, Kathmandu roof tops will generate 250 MW of electricity which is almost equivalent to Indian imports today

Support Required to Accelerate the Process

Ease in Application Process Issues Faced What will be helpful Lack of clarity in NEA on how to process the net metering application Confusion in processing household net metering applications Lack of clarity on which technology will be allowed There is lack of clarity on required documentation Clear Process Step 1 – Step 2 – Step 3 – Step 4 Clarity on required documentation Clarity on technology Ease of Application (online if possible) most people do not adopt the technology due to difficult process Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Application Documents Clear Process Application Documents Technical Documents Submission Follow-up Approval Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Awareness Programs Government level awareness programs will be very helpful as a marketing strategy for net metering Except for people within energy sector, there is little awareness about net metering If government promotes solar roof top net metering solution in a large scale, the adoption rate will be much higher Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Innovative Financing Mechanisms Without financing this sector is not going to scale NEA should partner with Energy Service Company to design innovative financing Should encourage new models and opportunity Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

Innovative Incentive Programs Fiscal Incentive Generation Incentive Incentive that gives tax benefits to the asset owners Incentive which will be based on generation by the system 100% depreciation benefit in the first year Mechanism to sell depreciation benefit by a household to an institution (happens all over the world) If a certain threshold is hit within a year then the installer gets certain type of benefits High incentive for storage based systems. There a lot of stranded batteries which could be utilized Reliable Grid Supply: Today Nepal has reliable electricity supply from the grid, though unexpected small power cuts still occur occasionally. The power cuts (load shedding) typically doesn’t last very long (unless there are unexpected physical damage to power lines). We expect this new reliability in power supply to continue with power cuts becoming even less frequent. The type of solar system that was previously designed for previous long-shedding hours were for storage and for dealing with load shedding. In the current context of more reliable power supply, the system design must be modified to utilize the reliable grid supply. Increasing electricity tariff: Nepali electricity consumers are likely to witness increasing electricity tariffs in the future. Electricity tariffs are currently too low for NEA. A 20% tariff increase was put in place two years ago. Another proposal for a 20% increase in tariffs is pending before the tariff commission and is likely to announced. With the reduction in load shedding, there will be growing pressure for future increases in tariffs to offset the high cost of imports from India. In this context, solar systems must be designed to help reduce expenditures on electricity. Our analysis reveals that the economics of the proposed solar system is already very compelling. Higher tariffs will only make it even more compelling. Stranded Solar Rooftop: Since the grid is reliable now, 99% of the solar system installed are not being utilized. The inverters are directly by passing the solar and supply electricity from the grid.

We hope to collaborate to make Nepal an energy prosperous country Thank you We hope to collaborate to make Nepal an energy prosperous country