SOLAR POWER: What Has Changed in Practice?

In mid-2025, the Ceylon Electricity Board (CEB) — with Cabinet approval — revised downward feed-in tariffs for solar power for new projects. Rooftop solar rates were cut significantly compared with earlier schemes, with smaller systems now receiving rates around LKR 20.90 per kWh and larger systems LKR 14.46 per kWh. These reflect a 20–40% reduction from the prior regime, reducing potential revenue and investor returns.

Solar developers and industry advocates argue this tariff reduction effectively lowers the financial incentive to install new systems — undermining investor confidence and slowing private sector engagement.

2) New CEB Capacity Limits
A CEB circular issued in September 2025 placed limits on rooftop solar installationsrelative to a customer’s past consumption (e.g., rooftop systems cannot exceed average usage of the past year). Critics say this penalises energy efficiency and discourages larger installations or future growth —

especially for startups or households intending to expand generation or charge EVs.
CEB and government officials justify this as grid- stability management, not discouragement — arguing that line and grid upgrades are needed to safely absorb excess generation without affecting frequency or voltage stability. The SLSEA has indicated it is still reviewing the rules and their implications.

Net Metering vs. Reality on the Ground

Net Metering — Not Cash-Pay

Under true Net Metering, you don’t receive direct payment for exported power; you merely offset your bill by the amount you feed into the grid. Excess can be banked for future consumption. This is the official framework already in place.

But in practice today:
Net Metering remains active in principle but is being reshaped into alternatives like Net Plus or Net Accounting with payments at fixed rates — not pure credit against bills.
Proposed tariff frameworks would scrap pure net- metering and keep only Net Plus, where solar energy is sold at a fixed price to the utility rather than credited against a consumer’s own usage. This would effectively reduce the benefit of self-consuming solar power.

This has two practical effects:
Consumers may lose the simple benefit of offsetting their nighttime grid usage with daytime solar generation.
Instead, they might be paid a lower, predetermined price per kWh sold — separating export revenue from personal consumption credits.

Grid-Stability Actions vs. Incentives

There have also been operational actions (not just tariff decisions) that have feltdiscouraging to solar owners:
The CEB asked rooftop solar owners to temporarily switch off systems during periods of low demand in 2025 to maintain grid stability, leading to criticism that solar is being curtailed rather than integrated. This curtailment ended after the holiday period.

Industry reporting suggests some developers were told to disconnect or reduce output without clear regulatory documentation — perceived as arbitrary curtailment rather than transparent policy.

This creates the perception that solar adoption is not being fully embraced, even if the official position is supportive.

What It Means Overall

Official Position

The Government supports solar and net metering in policy documents.

Net Metering, Net Accounting, and Net Plus are formal connection schemes under Soorya Bala Sangramaya.

CEB grid connection standards provide for two-way meters and billing under these schemes.

Practical Realities

• Feed-in tariffs and compensation rates have been significantly reduced, lowering private investment incentives.

• The pure net-metering benefit (1:1 credit) is being rolled back toward paid tariffs under different schemes.

• New capacity limits based on historical consumption constrain bigger installations.

• Temporary grid stability directions to solar owners have been interpreted by the public as discouragement.

In Summary

The Government’s official stance remains supportive in principle, but recent CEB tariff adjustments and capacity restrictions have dampened the financial attractiveness of rooftop solar. Rather than actively discouraging solar power outright, the current approach alters the economic incentives — resulting in a de-facto slowdown of aggressive net-metering uptake. The effect is less about ideologically opposing solar, and more about balancing perceived grid stability concerns with renewable targets, albeit in ways that industry and consumers see as limiting rather than enabling growth.