In a move set to spark fierce debate, a proposal is being prepared for Cabinet approval to dramatically cut the tariffs paid for renewable energy sources connected to Sri Lanka’s national grid. The sweeping changes aim to reduce costs for the Ceylon Electricity Board (CEB) by revising the rates paid per unit of electricity generated from solar, small hydro, wind, biomass, and municipal solid waste projects.
For the first time, a distinct tariff structure has also been proposed for rooftop solar installations and photovoltaic systems equipped with battery energy storage signaling a bold shift in how homegrown solar power is priced and incentivized.
While the proposal outlines lower rates moving forward, authorities emphasize that previously signed agreements will remain honored, with payments continuing at the contracted rates. However, the renewable energy sector has already raised strong objections, warning that further reductions could jeopardize the viability of ongoing and future projects.
Under the proposed rates, owners of rooftop solar systems that generate up to 500 kilowatts would receive Rs. 37 per unit if contracts were signed before July 2024. Those who entered contracts after the July 2024 revision will see their rates drop to Rs. 27.06 per unit.
But the real shake-up comes with the new tariff structure:
- Rooftop solar systems up to 20 kilowatts: Rs. 19.61 per unit
- Between 20 and 100 kilowatts: Rs. 17.46 per unit
- Between 100 and 500 kilowatts: Rs. 15.49 per unit
- Between 500 kilowatts and 1 megawatt: Rs. 15.07 per unit
- Over 1 megawatt: Rs. 14.46 per unit
These cuts, if implemented, could have a lasting impact on investment in the renewable energy sector and raise concerns about Sri Lanka’s commitment to a sustainable energy future. As solar and renewable energy producers brace for the potential fallout, all eyes are now on the Cabinet’s final decision.
