Proliferation of grid-connected solar PV solutions would mean that Nepal is able to attain a reliable, diversified energy system capable of providing power to even the remotest parts of the country Nepal is rich in water, solar, wind and biomass resources, but the country is unable to utilise these resources in the absence of innovative technical knowledge and finance. Given that solar is the second most abundant and preferred source of energy for Nepal after hydro, developing the solar PV industry is justifiable. As for the distributed solar home systems (SHSs) and solar micro-grids, Nepal has seen some development in those sub-sectors already, but their impact is limited. Distributed solar home systems took off in the last decade, but the model got limited to just powering a few bulbs in the rural households. Solar micro-grids turned out to be vastly expensive and unsustainable without at least 80 per cent of the total cost in grants. The only other model that can achieve large-scale solar PV development is utility-scale solar system, as in India today. However, as Nepal has significant transmission constraints, this solar system also becomes less feasible. Proliferation of grid-connected solar PV solutions would mean that Nepal is able to attain a reliable, diversified energy system capable of providing power to even the remotest parts of the country. The government plans to achieve 99 per cent electrification rate by the year 2030, and it cannot achieve that by relying on hydro plants that take a minimum of five years to construct. A grid-connected solar system mainly has two components: solar PV panels and an electronic device called an inverter. Apart from these components, there are other minor components, such as switches and fuses, which allow each of the two major components to be completely isolated when repairs are needed. The system does not require any battery, making the cost of the system 60 per cent less compared to an ordinary solar-battery system. Electricity generated is directly utilised for load operation, and surplus energy is fed into the grid, which is eventually balanced through net metering and is paid back through the feed-in tariff (FIT) rate. The technology holds tremendous potential at sites having day loads like hospitals, schools, colleges, hotels, industries/factories, offices, making them independent in energy use and thus lessening the burden on Nepal Electricity Authority (NEA). There are many advantages to using a grid-connected solar system. This technology will give a boost to the total energy supply. Currently, we import almost half of the electricity from India, thereby implying major energy security risks. Large solar PV injection, therefore, has the power to minimise imports. Hydro, the major source of power for the country today, cannot be constructed immediately to offset imports. Supply diversification is another advantage. With climate change impacts getting more visible in the Himalayan region, relying on hydro alone is highly risky. Solar PV complements hydro generation, especially in the winter months when the rivers dry up. Nepal suffers from a worsening trade balance due to high levels of power and fossil fuel imports. Nepal currently imports electricity of about Rs 20 billion, LPG gas of about Rs 30 billion and petroleum products of about Rs 100 billion annually. A stronger local energy generation, therefore, has the power to improve the trade balance significantly. In addition, the current national goal to make electricity the primary source of energy supports the need to develop solar PV industry in the country. Nepal’s transmission network is outdated and is in no position to accommodate large power generation that the government plans to achieve in the next 10 years. On-site solar PV generation, therefore, has the capacity to not only reduce pressure on transmission and distribution but also reduce power losses that occur upon using the outdated infrastructure. One major advantage is that there will be higher energy access for rural consumers. If big consumers consume less energy as a result of on-site solar PV, the rest of the country will have access to more power. In Nepal, a grid-connected solar system is in its nascent phase. A few attempts have been made in this sector, such as a 1-MW system at Singha Durbar, 680 KW system at Sundharighat, 100 KW system at Kharipati, 65 KW at Nepal Telecom and a 1-KW test project at Pulchowk Engineering Campus. However, the technology is yet to gain momentum commercially. Hence, net metering and feed-in tariff (FIT) would be crucial policies. The government has already formulated these policies, but its unwillingness to implement them is causing delay in its commercialisation. In India, in 2011, under the Jawaharlal Solar Mission policy (which is now renamed as National Solar Mission), the Indian government formulated policies to kick-start a grid-connected solar system. One important part was the feed-in tariff (FIT) rate. Narendra Modi, then chief minister of Gujarat, offered IRs 15 per unit (kWh) for solar electricity. This policy attracted so many private investors in the sector that the government’s target to develop 22,000 MW from solar electricity by 2022 was met within 2017. They reformulated the target to 100,000 MW by 2022. Feed-in tariff rate in Nepal is Rs 7.30 per unit (kWh). Economists say at this price, it is challenging for any private investor to invest in this sector. The government should come up with a policy similar to that of India to kick-start this sector in Nepal.