Solar tariffs to be further reduced?

Why Is the CEB Limiting Rooftop Solar?

For years, the CEB has been trying to reduce the solar tariff. In July 2024, they pushed through the price cut—specifically targeting rooftop solar users—despite PUCSL’s resistance. In 2025, the clearance process for new solar installations has also become significantly harder, with many applicants facing rejections due to stricter requirements.

On March 3rd, 2025, the Cabinet of Ministers approved the transfer of 219.72 hectares of land to the Sri Lanka Sustainable Energy Authority (SLSEA) for a 100 MW solar power project in Siyambalanduwa. Meanwhile, ordinary citizens who want to install just 5 kW of rooftop solar are being rejected. 

The CEB claims that too much solar power in the grid during sunny days leads to phase balancing issues, which supposedly contributed to the countrywide blackout in February 2025. However, this is not the fault of consumers. It is the CEB’s responsibility to implement solutions to store excess energy, such as battery storage systems. To their credit, they have begun working on a 600 MW “water battery” project to address this issue.

‌Could There Be Another Reduction in Solar Tariffs?

The earlier decision to cut the rooftop solar unit price stemmed primarily from the electricity tariff reductions in early 2024, coupled with the continuous decline in solar installation costs since 2023. With additional tariff reductions occurring in the latter half of 2024 and again in January 2025, there is growing speculation that another decrease might be on the horizon. Given the ongoing PUCSL-CEB conflict and the lack of a definitive explanation for maintaining the Rs. 27 tariff, a further reduction remains a distinct possibility. Here’s why:

• Without government intervention, the CEB may continue to impose restrictive measures on small-scale solar, making it increasingly difficult for new users to enter the system.

• The IMF’s concerns regarding the January 2025 electricity tariff reduction could place additional strain on solar rates, potentially prompting the CEB to seek further adjustments to stabilize revenue.

With these factors in play, the prospect of another tariff reduction cannot be ruled out.

What Should You Do?

If you’re considering investing in solar, now is the time to act. Solar prices in China have already begun to rise, and it’s only a matter of time before those increases are reflected locally. Additionally, there’s a real possibility that the unit price could be reduced due to external pressures—especially from the IMF—which could negatively impact returns for solar investors. Acting now ensures you lock in better financial benefits before any policy shifts.

If you’re interested in earning through solar, I highly recommend checking out the The Ultimate Guide to Earning with Rooftop Solar page. It provides a detailed breakdown of the process, along with my personal experience and financial returns from installing a solar system.

Thanks for reading!