Sri Lanka Scraps Net Metering and Net Accounting for New Solar Power Connections

Sri Lanka's Ministry of Energy has instructed Electricity Distribution Lanka (Pvt) Ltd to immediately cease offering Net Metering and Net Accounting schemes to new solar power applicants, marking a significant shift in the country's residential and commercial solar energy landscape.

What This Means for Solar Users

The two schemes, which have long served as financial incentives for households and businesses to invest in rooftop solar panels, will no longer be available to new connections. Existing users already enrolled under either arrangement are not expected to be immediately affected, but prospective solar adopters will need to navigate a changed policy environment going forward.

Under the Net Metering scheme, solar panel owners were able to feed surplus electricity back into the national grid and receive credits against their consumption, effectively reducing their monthly electricity bills. The Net Accounting scheme operated on a similar principle, offering monetary settlements for excess power supplied to the grid.

A Turning Point in Energy Policy

The directive signals a notable departure from the incentive-driven approach that successive administrations had championed to boost renewable energy adoption among ordinary Sri Lankans. Critics argue the move could dampen enthusiasm for private solar investment at a time when the country is still recovering from its worst energy crisis in decades.

Energy sector observers have expressed concern that removing these schemes without announcing a clear replacement mechanism could leave prospective solar customers in limbo, uncertain about the financial viability of installing rooftop solar systems.

Government Yet to Announce Alternative Framework

At the time of writing, the Ministry of Energy had not publicly outlined what replacement policy or pricing mechanism, if any, would be introduced for new solar connections. Industry stakeholders are calling on authorities to provide urgent clarity to avoid disrupting an already growing market.

• Net Metering allowed excess solar power to offset electricity bills through grid credits
• Net Accounting enabled monetary compensation for surplus energy fed into the grid
• Both schemes have been discontinued for all new applicants by order of the Ministry of Energy
• Electricity Distribution Lanka (Pvt) Ltd is the body tasked with implementing the directive

Industry insiders warn that without a viable alternative, the policy change risks reversing years of progress in expanding Sri Lanka's rooftop solar capacity among private consumers.

Sri Lanka has in recent years positioned renewable energy — particularly solar — as a cornerstone of its long-term strategy to reduce dependence on costly fossil fuel imports. How this latest policy reversal will square with those broader ambitions remains to be seen, and all eyes are now on the Ministry of Energy to provide answers.