A case study of how India cuts out middlemen to kill corruption
I may have lost ₹50000 but I’m happy that no one else will
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I live in Kerala, a picturesque coastal state in south India. Malayalis are usually intelligent and enterprising folk. Sadly, corruption is endemic in Kerala, and this makes it hard for an honest person to survive. So most Malayalis migrate out of the state or country and usually flourish wherever they go. Unfortunately, this also means that many older Malayalis live alone. The kids either work or have permanently settled outside Kerala, including abroad.
I am one of those migrants and my mother is one of those lonely parents. When Covid struck, I returned home to keep her company, dividing my time between my two homes; my wife works in the neighbouring state of Tamil Nadu, and my kid studies at a University in the same state.
Anyway, one of the things I noticed on returning home was the bi-monthly electricity bill of ₹5000, as compared to the ₹800 I was paying in my other home in Tamil Nadu. Yes, I had installed an experimental off-grid solar panel of less than 1kW some years ago to generate some extra power for the two-wheeler EV we have. But a bill that was 5X was definitely on the high side for a single lady, even factoring in that my 35-year-old home has lots of old power-guzzling electrical appliances. Now Kerala is a sunny state, and I had been told that the Indian government is giving a subsidy for solar plants. So I applied for a proper 5kW on-grid solar plant via the Soura Scheme of KSEB, the Kerala State Electricity Board. The subsidy is 20% for plants above 3kW, So assuming a cost of ₹3,00,000, the subsidy would be a substantial ₹60000.
A year passed by but KSEB didn’t get around to installing the solar plant. I realised too late what was going on. For KSEB, I was a cash cow, and if they installed the solar plant, they would lose the income from my high electricity bills. So KSEB probably deliberately delayed the solar installation. Whatever money I would have saved on the subsidy was gone in the ₹5000 bimonthly electricity bill payments in those two years.
Realising that I was bleeding money, I decided to forget the subsidy. I contacted a private solar firm and had them install a 5 kW plant with mono-crystalline solar panels. On July 21st, the KSEB technicians checked my installation and activated it.
Meanwhile, India’s central government also arrived at the same conclusion. KSEB was more concerned with protecting its own interest and was deliberately sabotaging India’s plans to go solar. However, the current Indian government is tech-savvy and used that know-how to get around bureaucratic corruption by simply cutting out the middleman.
On July 30, Prime Minister Modi announced a national portal for rooftop solar. Any Indian citizen can now directly avail of a subsidy for a solar plant. We even have the choice to choose the technology and supplier. But there’s an asterisk (see quote below from MNRE website).
Domestic manufactured modules and Solar cells to be used*
This would imply the subsidy is only applicable to the locally made polycrystalline solar technology, which isn’t as efficient as the monocrystalline panels.
Anyway, this online portal enables the central government to neutralise KSEB’s go-slow strategy to maintain the status quo.
That wasn’t all though. KSEB sells electricity to me at ₹7/unit and buys excess generation from me at ₹2.35/unit. That’s daylight robbery considering that Kerala doesn’t generate enough power to meet its needs and regularly buys power from other Indian states at ₹10/unit or more.
However, KSEB isn’t satisfied with ripping me off by delaying the subsidy. Their next bright idea was a plan to switch to gross metering. Currently, on-grid solar rooftop owners pay by net metering: I only pay KSEB if I consume more than I generate. Like if I generate 10 units a day, and consume 10 units, I’m net zero. This means I pay KSEB nothing, except a nominal ₹100 or so for maintaining the electricity meter. With gross metering, I will have to pay KSEB at ₹7 for every unit I consume (10 units a day puts me in the higher slab of ₹7/unit). Meanwhile, KSEB will buy all the power I generate at the lower rate of ₹2.50/unit, and then sell that power to my neighbour at ₹7/unit.
So I end up having to pay KSEB the difference of ₹45/day. This despite having invested in a solar plant that actually generates all the power I consume. This ridiculously exploitative scenario is only possible because KSEB is a monopoly. It’s the only utility I can sell my excess power to.
That’s where the Indian government came up with another masterstroke. It proposes to do away with KSEB’s monopoly by allowing customers to buy (and presumably sell) my power from any utility anywhere in India. Not surprisingly, KSEB immediately protested and went on strike. The usual allegations of the government handing over the country to rich business houses like the Ambanis and Adanis began to happen. But we have heard this story before, haven’t we?
Remember the era when Indians had to pay for incoming calls and ₹300 for 1Gb of data. But then the government opened up the network to more private players. And it was one of these newbies, Reliance Jio that revolutionised India’s telecom market with mobile internet and calls that are among the cheapest in the world. This has been one of the driving factors of India’s outstanding progress in the last few years in diverse fields like e-commerce, banking, education, entertainment and so on.
Competition will make things better, not worse, no matter what KSEB says. It’s not that everyone at KSEB is corrupt. The staff I have met are friendly and helpful and do their best to assist in an emergency. Like when I went to KSEB’s Soura division for a technical issue related to my solar plant, they advised me even though I hadn’t installed my system through them. (My plant shuts down repeatedly during peak production hours of 12 noon to 3 pm and the KSEB engineers’ opinion based on their experience is it could be either a service wire or inverter issue.)
But KSEB has to be accountable. A delayed installation where the customer loses the benefit of a subsidy provided by the central government is just not acceptable. Also, KSEB’s rates are way too high. My wife works just across the state border in Tamil Nadu, and I know that Tangedco provides electricity at far cheaper rates. Customers cannot be penalised for KSEB’s inefficiencies. So KSEB needs to play fair, and there’s nothing like competition to ensure that.
As for me, there was an element of luck in my decision to go ahead with my solar installation in June 2022 after waiting for two years. One month later, and I may have got a subsidy of ₹50000. I say ‘may’ because the company that installed my plant informed me the subsidy isn’t valid for monocrystalline panels as they are not manufactured indigenously. So though I have asked MNRE to apply the subsidy with a retroactive effect, I doubt I will get it.
Whatever. If I postpone decisions because I’m afraid of making mistakes, then I will never make any decisions. Anyway, I would probably have still gone ahead without the subsidy as I wanted the monocrystalline panel for its ability to function in poor light conditions. Win some, lose some.
Still, it’s nice to know that I’m probably one of the last customers that KSEB will rip off. Which makes this a good post for India’s Independence Day.