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India has finally started to put money into providing support for rooftop solar energy, where it has set a very ambitious target of 40000 MW by 2022 from around 500 MW now. While the grid connected target for solar energy of 60,000 MW looks well within reach, with almost 6 GW of tenders being issued and another 4 GW in the pipeline, the rooftop solar space looks in a bad shape. There is no clarity on regulations and policies as the subsidies keep changing. While some states have tried to encourage rooftop solar, they have done so in a ham handed way which has led to disastrous results. Haryana had made rooftop solar compulsory for all public buildings, but this has not worked as there are no subsidies available. Also there is no ecosystem of system developers and installers, while utilities have not prepared themselves to provide bidirectional meters and grid connections for rooftop solar systems.
The government has also done multiple flip flops with capital subsidies going from 30% to 15% and now back to 30% again. They have removed industrial and commercial rooftops from the subsidy, ambit leaving only government buildings and households to receive the subsidy. States apart from Gujarat have failed to spur the sector despite multiple efforts.
The government has finally woken up to the problem for the rooftop solar sector. It has decided to increase the budget allocation from Rs 600 crores ($90 million) to Rs 5000 crores ($750 million). Earlier rooftop solar had failed to take off, as it was almost impossible to avail the subsidies, given the small budget. But with the budget increased, it should be possible for households to avail the subsidies. The government hopes that this will lead to the sector seeing an increased interest and growth. The government plans to provide subsidies to 4200 MW (average of Rs 1.2 crores/MW) of rooftop solar capacity. However I am not sure how this works out as Rs 1.2 crore will be only 15-20% subsidy, given the Rs 6-7 crores/MW cost for rooftop solar energy.
This is a good move by the government, as rooftop solar had become a glaring failure in front of the massive growth being seen in the grid connected utility scale solar energy plants being built across the country. However, the government needs to do much more to encourage unsubsidized rooftop solar energy. It has to streamline the net metering laws and make it easy to get financing. Making laws and policies won’t work unless these are implementable on the ground. This government has done an amazing amount of work in the area of solar energy. So I am optimistic that this increased funding might lead to the growth of the rooftop energy space in India.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has approved the scaling up of budget from Rs, 600 crore to Rs. 5,000 crore for implementation of Grid Connected Rooftops systems over a period of five years upto 2019-20 under National Solar Mission (NSM). This will support Installation of 4200 MW Solar Rooftop systems in the country in next five years.
The capital subsidy of 30% will be provided for general category States/UTs and 70% for special category States i.e., North-Eastern States including Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir and Lakshadweep, Andaman & Nicobar Islands, There will be no subsidy for commercial and industrial establishments In the private sector since they are eligible for other benefits such as accelerated depreciation, custom duty concessions, excise duty exemptions and tax holiday etc,
2 Comments
Subsidies are welcome for promotion. But the methodology of how the subsidy is going to be disbursed and to whom is the big question. The customer will say that he needs to get the reduction in price and the installer will have to shell this out and later claim from some government body. The reimbursement of subsidy has never been smooth and hence this has never taken off. Till the time this is sorted out, any declarations in this regard is prone to failure.
@ Radhakrishnan Mundoli, what you said is exactly correct and this the problem for solar professionals, when we are going to approach a customers they will start to discus subsidyand we cant able to claim the subsidy from the govt. Its like band gap in solar markets especially in commercial tariff power consumers.