ECONOMYNEXT – Sri Lanka will pay 27 rupees a unit for rooftop solar electricity from July 2024, which is good enough for solar operators to install and also make a profit, Power Minister Kanchana Wijeskera has said.
The Energy Ministry and Ceylon Electricity Board raised the price paid to rooftop solar to 37 rupees for a 20 year contract when the rupee depreciated steeply and interest rates were high and global solar panel prices were also high.
Rooftop solar was paid 22 rupees for 8 years and about 16 rupees for the balance period in feed in tariffs before the currency crisis, he said.
To encourage rooftop solar the rooftop solar price was then raised to 37 rupees during the recent currency crisis.
“The price was supposed to be revised every three months based on economic parameters,” Minister Wijesekera said.
“A policy decision was made to continue it for a year.
“Now we see world solar panel prices have fallen steeply, the dollar rate has fallen, and interest rates have fallen.”
“Even though we have revised the price, we think the people engaged in this have some profits and cover costs.
The 27 rupee rate works out to around 8.85 US cents at an exchange rate of 305 rupees to the US dollar.
It is higher than the 8.26 US cents to be given to a wind plant by India’s Adani group.
Meanwhile Minister Wijesekera said, a time when the average generation cost of the CEB has fallen 38 and 39 rupees to pay 37 rupees for 20 years for rooftop solar would not help bring down generation costs in the future.
“It may not be seen today. But it will not contribute to bringing down costs in the next few years.”
Existing contracts will continue at the higher prices, and the lower rate will only apply to new rates, he said.
“The price went up and it has come down on the same formula,” Minister Wijesekera said.
The parameters included the cost of solar panels, the dollar rupee exchange rate, bank interest rates and cost of other raw materials.
There was a target for 150 MW of rooftop solar a year and so far this year 142MW of rooftop solar has been connected.
“We do not think the new rate will discourage rooftop solar,” he said.