Solar prosumers accuse Kerala State Electricity Board of continuing to levy duty despite exemption

KSEB continues to levy duty on solar prosumers despite Kerala government exemption, leading to demands for refunds or adjustments.

The Kerala State Electricity Board (KSEB) is continuing to levy duty on electricity generated by solar prosumers despite a State government decision to exempt them from it, solar prosumers allege.

The duty is being levied at 15 paise per unit, notwithstanding an announcement by Finance Minister K.N. Balagopal that solar prosumers stood exempted and a subsequent reference to it included in the Kerala Finance Bill, 2024, passed by the Kerala Legislative Assembly in July, the Kerala Domestic Solar Prosumers Community has said.

According to the prosumers’ collective, KSEB officials were claiming that neither the government nor the KSEB management has issued orders on the exemption. Citing the financial loss to them, the prosumers have demanded that the KSEB should either refund the excess amount “unlawfully” collected from them or adjust it against their power bills.

Up till March 31, 2024, the KSEB had collected the ‘self generation duty’ from solar prosumers at the rate of 1.2 paise per unit, although the Union government had directed states not to levy it.

As part of mopping up additional resources, the Kerala government, through the 2024-25 State Budget, increased the electricity duty for “consumers who generate and consume energy for their own consumption” from 1.2 paise to 15 paise per unit.

Soon after the Budget presentation, Mr. Balagopal made it clear that solar prosumers – consumers who generate and consume energy from solar sources – would be exempted, given the thrust on renewable energy sources.

On March 27, 2024, the Chief Electrical Inspector issued an order to all licencees, including the KSEB, asking them to collect the duty at the enhanced rate. Based on this direction, the KSEB launched measures for making the necessary changes in the billing software.