Rooftop Solar Growth in Pune

Pune which is situated in the western state of Maharashtra in India has the highest amount of rooftop solar capacity installed at 130 MW. The city which is a major IT and industrial hub has seen high amounts of rooftop solar capacity installed, despite the opposition faced from the state distribution utility MSEDCL. Maharashtra has the highest electricity tariffs for commercial and industrial consumers in India mainly due to the huge subsidies it gives to the agricultural sector. This makes rooftop solar quite attractive to the industrial consumers who can see their overall power charges fall by more than 50% if they install rooftop solar.

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So despite the utility which stops/opposes rooftop solar, the city has seen many consumers moving away. However, this growth may come to an abrupt halt as the regulator is trying to remove net metering for commercial and industrial consumers. As per a draft regulation, industrial and commercial consumers are only able to connect their rooftop systems to the utility under a gross metering model and not through the net metering model.

This will not only stop rooftop solar growth in Pune but the entire state as the economics of putting rooftop solar will become too low or even negative for rooftop solar owners. Under gross metering, the consumers will have to pay very high tariffs (more than INR 10-12/kWh) for the electricity that they buy from the utility but they will get only a fraction (around INR 3-4/kWh) for all the power that is generated from their rooftop solar systems. This will mean that no industrial owner will have any incentive left to put the rooftop solar system as they may not even get a 10% return on his investment besides having to take the headache of getting the system installed, getting approvals and monitoring the system.

India’s rooftop solar target of 40 GW is going to be missed big time even if things go well but with states like Maharashtra and Uttar Pradesh actively working against rooftop solar, this will mean that this target may not be met by even 2025. While economics is currently massively in favor of rooftop solar, active opposition by utilities who do not want their “cash cow” industrial and commercial consumers switching away, means rooftop solar will find a hard time growing. While the Indian central ministry is trying to incentivize distribution utilities to encourage rooftop solar, this clearly is not working.