Will rooftop Solar Finally Succeed in India

Rooftop Solar in India has been the Achilles heel of the government’s renewable energy strategy. This segment has failed to take off despite the numerous policies and subsides enacted by the central ministry. The main reason is that rooftop solar energy requires support from the local distribution utilities which are infamous for their sloth, red tape and corruption. With these organizations failing to perform their normal chores, it is like expecting a miracle for them to support rooftop solar through net metering. It requires regulations and processes to be in place and also is against the interest of the discoms as they would result in lower energy sales and revenues.

The government has finally realized that it cannot push this sector with all the policies unless it gets the discoms incentivized. The government has come out with a concept note in which it plans to give around $50,000 for each MW that a discom puts up in its area. This subsidy it hopes will help push the capacity of rooftop solar energy in the country. As we have earlier written, the economics of rooftop solar energy in India has become extremely compelling. It makes great sense for at least commercial and industrial customers to use rooftop solar energy as it has become much cheaper than the grid electricity. However, cumbersome regulations and the approval of the discom for net metering has proved to be the biggest hurdle. While the government has gotten great response from solar companies when it has put out large tenders for rooftop solar, the free market has not developed as rapidly.

All Discoms are eligible for the proposed grant, however, they must fulfill a range of conditions. For example, the Discom must have a well-defined and functional implementation process for rooftop PV and create a special ‘Cell’ dedicated to this technology. It must also reach its annual rooftop targets and provide a year-on-year plan for the requirement of the proposed grant funds.

The government has also put forward 20 mandatory reforms to be undertaken by the Discoms. These included defining rooftop solar to include small plants on the ground, within the boundary of a facility of up to 2,000 kW. The time between a consumer application and plant commissioning should also be no more than three months.