Kerala’s power board has raised a red flag—rooftop solar power, widely seen as a clean, cost-effective energy solution, may actually be draining the state’s finances.
The Kerala State Electricity Board (KSEB) says it suffered a loss of over ₹500 crore in 2024–25, primarily due to rooftop solar systems being operated without battery storage. To recover some of this burden, it is proposing a 19 paise hike in electricity tariff per unit for all consumers.
And that’s just the beginning. According to KSEB, this additional cost could rise to 39 paise per unit by 2034 if current trends continue
Kerala has about 1.3 crore electricity consumers. But only around 2.5 lakh of them generate their own solar power. That’s just 2%.
Yet, KSEB claims this tiny group is causing losses that are now being passed on to the other 98% of users through the common tariff system. The board says the proposed amendments to the Renewable Energy Regulation 2025 aim to fix this imbalance.
As per existing rules, KSEB is required to supply solar users with the same number of units in the evening as they feed into the grid during the day. However, evening power is scarce—and more expensive. So, KSEB ends up buying costly electricity to give it back to solar users, resulting in mounting losses.
And it doesn’t stop there. KSEB says that only 36% of solar electricity is used directly by the producers during daytime. The rest—around 64%—goes into the grid. Of this, about 45% is drawn back by the same producers during non-solar hours under the ‘banking’ arrangement. For the remaining 19%, the board has to pay the average power purchase cost (APPC), even though that energy wasn’t consumed when it was produced.
KSEB is also grappling with technical challenges. Since daytime consumption is low and battery storage isn’t in place, excess power floods the grid, leading to high voltage fluctuations. This not only puts the grid under stress but also increases the risk of damage to household appliances.
The board has warned that if this continues, it may be forced to shut down rooftop solar systems during certain hours to protect the grid’s safety.
