📈 Solar Policy Changes Threaten Sri Lanka's Energy Security & Economy

Sri Lanka’s solar sector faces a severe setback following a new Ministry of Energy circular (issued 11 Sept 2026), which industry experts warn could disrupt $2,600\text{ MW}$ of existing rooftop capacity and heighten risks of a $450\text{ MWh}$ electricity shortage by early 2027. • Policy Revisions & Impact on Consumers: • Discontinues successful Net Metering & Net Accounting; forces all new/extended setups onto Net Plus. • Shortens agreement periods from 20 years to max 12 years. • Disproportionately hurts household economics: a 5 kW setup earning ~Rs. 13,000 under Net Plus would now require repurchasing grid electricity at ~Rs. 48,000. • National Economic & Sector Implications: • Solar energy currently saves Sri Lanka ~Rs. 20.4 Bn/month (Rs. 1.5 Bn/day) in imported fossil fuels; replacing it with diesel would cost ~Rs. 2.5 Bn/day. • Heightens energy costs for manufacturing and businesses, reducing commercial competitiveness. • Threatens 800+ solar firms, puts over 21,000 jobs at risk, and impacts 166,000 loan-funded solar installations. • Industry Requests & Counter-Proposals: • NCCSL urged the President to revoke the circular and restore flexible consumer models. • Recommends Battery Energy Storage Systems (BESS) on heavy-use transformers and smart grid integration rather than restricting renewable feed-in.