Bad News For The Indian Rooftop Segment as A Dozen EPC Players Down Shutters

Tough financial conditions, falling margins, and record-low tariffs have led to a dire situation for the EPC rooftop solar players in India. Almost twelve such companies have either shut down or are in the process of exiting the solar business over the last six months. These companies have said that the going had gone difficult as they were unable to even meet their working capital and other operating expenses. Popular industry names facing the brunt are Ujjas Energy, Kotak Urja and Relyon Solar, among others.

The rooftop solar potential in India is huge as there are a large number of buildings in the urban city jungles of the country. Given, the scarcity of land available in land-locked cities of India, rooftop solar has been promoted in major cities of India. Rooftop solar has the potential of creating 80 million jobs in India when adopted as a binding policy. Indians are generally dissuaded by the high amount of initial investment and fail to look at the long term benefits of going solar. In the west, houses which have rooftop solar systems installed have a higher market value. The same level of awareness is required in the Indian cities.

A pro-renewable energy government at the center and an aggressive renewable energy target are the major tailwinds for the growing rooftop solar segment in India. Improving fundamentals of the rooftop solar technology also prompted increased adoption. All this hype around the rooftop sector led to a large number of players in the segment, causing an increased competition which led to declining margins.

The government of India has tried hard to promote rooftop solar sector in India. However, regressive rooftop solar state policies from states like Uttar Pradesh, Maharashtra, and Tamil Nadu in the recent past have dampened the spirits.

“States like UP have retrospectively cancelled the net metering policy, while Tamil Nadu discom TANGEDCO has not facilitated net metering, CEIG and no objection certificate (NOC) procedures are impacting solar projects in these states,” Rahul Dasari, CEO of Sunshot Technologies, said.

Source: Financial Express

The net metering policy which is supposed to be the biggest driver of the rooftop solar sector is supposed to exist only in the paper in India, though all the states have their respective net metering policies in place. Non-payment of fees by off-takers and of subsidies by the government, which comprises 20% to 30% of the total capital cost have also ked to the downfall of the rooftop solar segment in India.

 “We have decided to focus on our core business of ground-mounted projects as the rooftop segment does not provide the bandwidth or the margins that we are comfortable with,” Ketan Mehta, managing director of Rays Power Infra, said.

Rooftop solar seems to be the only solution for the rising level of air pollution and increasing adoption of solar in India. We hope to hear more encouraging stories around this sector.