Sri Lanka's solar dilemma

Managing growth, grid stability, and fair compensation in the wake of Surya Bala Sangramaya

- BY JEREMY FERNANDO

SRI Lanka’s renewable energy journey saw a rapid boost with the launch of Surya Bala Sangramaya (Battle for Solar Energy) in 2016, a Government initiative to encourage rooftop solar installations.

Enabled by Net Metering, Net Accounting and Net Plus policies, rooftop and ground-mounted solar systems expanded rapidly. By early 2024, rooftop solar installations in Sri Lanka had exceeded 750 MW, and by May 2025, total rooftop capacity reached approximately 1,700 MW. This surge reflects the rapid adoption of distributed solar generation, making rooftop solar the dominant contributor to the country’s overall installed solar capacity.However, this growth came with unintended consequences, particularly for grid stability and financial viability. As solar generation peaked during midday when demand is relatively low, the Ceylon Electricity Board (CEB) faced mounting technical and economic pressures. This has prompted the Government of Sri Lanka (GoSL) to consider reforms aimed at shifting solar exports from daytime to evening hours, mirroring global trends but raising alarm among local stakeholders.

The policy shift

In response, the Government of Sri Lanka (GoSL) is planning to restructure export tariffs to reflect the time-value of solar energy:

■A reduction in daytime export tariffs is being considered to discourage midday overgeneration.

■A premium tariff for evening peak exports is proposed, aligning compensation with the actual grid demand (typically between 6:30 p.m. and 10:30 p.m.).

The rationale aligns with international experience: countries such as Australia, Germany, and California have faced similar issues and are now incentivising energy storage and self-consumption over grid export. This evolution marks a shift toward firm solar energy, renewable energy that can be dispatched reliably, often using battery energy storage systems (BESS).

The unspoken truth:

Grid saturation