Cabinet nod to nearly double tariffs for rooftop solar systems

• Tariff hike only applies to new rooftop solar systems

In a bid to incentivise more households and the private sector to invest in rooftop solar sector, the Cabinet nod has

been granted to nearly double the feed-in tariffs (FIT) offered for new rooftop solar systems in the first tariff hike in six years.

Power and Energy Minister Kanchana Wijesekera this week sought the approval of the Cabinet of Ministers to revise the prevailing FIT for new rooftop solar projects, in accordance with the recommendation of a committee appointed to revise the electricity purchase rates for the Ceylon Electricity Board (CEB). 

“The Cabinet approval was granted to revise the rooftop solar tariff rates. The two-tier current tariff rate of Rs.22.00 and Rs.15.50 will be revised to a flat rate of Rs.37.00 for less than 500KW and Rs.34.50 for above 500KW rooftop solar for 20 years. The tariffs will be adjusted annually, based on a formula,” Wijesekera announced.
With the steep depreciation of the rupee, abnormally high interest rates, rising inflation, restrictions on imports and the CEB’s failure to settle payments to rooftop solar producers, new investments into the rooftop solar industry have come to a standstill at the moment. 

In particular, 90 percent of the solar system setting up costs are linked to imports.
However, Wijesekera stressed that the new tariff rates would only be applied to new rooftop solar systems. 
“There will be no change of rates for already signed Power Purchasing Agreements and systems in use,” he stressed.

According to the Government Information Department, the rooftop solar sector contributes 580MW to the national grid by way of installed capacity.
The CEB has identified the potential to obtain another 1800MW of electrical capacity through the rooftop solar sector in its latest draft long-term Generation Expansion Plan. 
However, Sri Lanka’s Solar Industries Association believes that the country could add 1GW of solar rooftops per year for the next three years, which could save foreign exchange worth over US $ 3 billion over the same period by cutting down fossil fuel imports.