Colombo, Oct. 15 (Daliy Mirror) - Sri Lanka’s solar power industry has warned that a new Government policy could undermine the country’s energy security, increase electricity costs for consumers and businesses, and discourage investment in renewable energy at a time when the country faces the prospect of an electricity shortage in 2027.
The concerns centre on a Ministry of Energy circular issued on September 11, 2026, which discontinued the previously available Net Metering and Net Accounting schemes for new connections and extensions of existing agreements, requiring them to operate under the Net Plus scheme. The maximum agreement period has also been reduced from 20 years to 12 years.
Industry representatives raised their concerns during a panel discussion titled “Affordable Clean Energy – A Right, Not a Privilege,” held at the National Chamber of Commerce of Sri Lanka auditorium.
The Public Utilities Commission of Sri Lanka (PUCSL) and the National System Operator (NSO) have warned of a potential electricity shortfall of 450 MWh by the first half of 2027. A severe drought associated with an El Niño event could further affect hydropower generation, increasing pressure on the country's electricity supply.
Against this backdrop, rooftop solar has become an important component of Sri Lanka's energy mix, with more than 2,600 MW of capacity connected to the national grid.
The solar industry estimates that rooftop solar installations help save approximately Rs. 20.4 billion in foreign exchange each month by reducing dependence on imported fossil fuels. Replacing the same volume of electricity with diesel-generated power could cost around Rs. 2.5 billion per day, with diesel-generated electricity costing approximately Rs. 170 to Rs. 180 per unit, according to industry estimates.
Industry representatives warned that the new policy could weaken the financial incentive for households to invest in rooftop solar systems.
A typical rooftop solar installation costs between Rs. 1.5 million and Rs. 2 million. Under the previous Net Metering arrangement, a 5 kW system generating approximately 550 units could offset an equivalent amount of electricity consumed by a household, potentially eliminating its electricity bill, depending on consumption and applicable conditions.
Under the Net Plus arrangement, the same 550 units would be sold to the Government for approximately Rs. 13,000, while the household would have to purchase 550 units for its own consumption at a cost of around Rs. 47,000 to Rs. 48,000, industry representatives said.
They argued that the difference between the payment received for solar generation and the cost of electricity purchased from the grid could significantly reduce the financial benefits of rooftop solar investments, particularly as electricity tariffs continue to rise.
The implications could extend to businesses that depend on solar power to manage operating costs and improve long-term energy security. Industry representatives warned that reduced investment in rooftop solar could also affect employment and the financial viability of companies operating in the sector.
More than 800 companies operate in Sri Lanka's solar industry, supporting over 21,000 jobs, while approximately 166,000 consumers have obtained bank loans to install rooftop solar systems, according to industry figures. A contraction in the sector could affect new investments and the maintenance of existing installations, they warned.
Dr. Lakmal Fernando, Vice President of the Sri Lanka National Chamber of Commerce, proposed strengthening the electricity grid and considering battery storage installations at between 1,000 and 2,000 of the country's approximately 33,000 transformers.
Such systems could store excess electricity generated by rooftop solar installations during the daytime and release it when required, helping improve grid management and accommodate renewable energy, he said.
Industry representatives also called for upgrades to transformers and distribution networks, greater adoption of Battery Energy Storage Systems, the introduction of smart-grid technology and streamlined procedures for connecting rooftop solar systems to the national grid.
They questioned whether making Net Plus compulsory would resolve concerns over grid stability, arguing that electricity generated under the scheme would still enter the national grid.
The Sri Lanka National Chamber of Commerce has called for the September 11 directive to be revoked, Net Metering and Net Accounting to be reinstated, and future policy changes to be independently evaluated by the PUCSL.
Industry representatives said a balanced policy approach was necessary to protect consumer choice, maintain investor confidence and ensure that Sri Lanka could continue expanding its renewable energy capacity while reducing dependence on expensive imported fossil fuels.
They warned that, as the country continues its economic recovery and prepares for possible electricity supply constraints, discouraging rooftop solar investment could increase pressure on the national electricity system and undermine efforts to provide affordable energy to households and businesses.
Seated from left is Moderator Eng. Parakrama Jayasinghe with panelists Vice President Sri Lanka National Chamber of Commerce Dr. Lakmal Fernando, Managing Director First Energy Eng. Prabath Wickramasinghe and President Solar EPC Association Dr. Shyam Pathiraja.