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Published:Thursday, July 25, 2019 3:54 PM

Indian Rooftop Solar Target: Need of the hour to focus

Indian Rooftop Solar Target: Need of the hour to focus

Government of India has set a target of 40 GW of rooftop solar capacity. Recently, administration of India launched the second phase of Grid connected Solar Rooftop program. Till now only 2 GW of rooftop solar capacity has been installed from the target capacity of 40 GW. Now, the Government of India has covered rest 38 GW in phase II of grid connected rooftop solar program and will also provide financial assistance of INR 118.14 Billion. This financial support help to accelerate the process of solar installation and will be in form of subsidy and viability gap funding.
Government of India will provide 40 % subsidy up to a capacity of 3KW and 20% to capacity between 3-10KW. Despite having subsidy from central government, the state government will also be providing some amount of subsidy. Special category states are also getting some additional support.
Present Situation
Currently, India has grid connected solar rooftop Installed Capacity of 2050 MW. Indian rooftop solar growth trajectory showed growth from 2016 to recent years. Main reason of growth is benchmarking of cost by MNRE and tender floated by some government organizations for rooftop solar. Tender Floated by IPGCL and MPUVNL are the largest tender floated for rooftop solar till date. Both the tenders got response from the developers and strike a lower tariff of INR 1.58/KWh.
Total Installed capacity at end of the FY (in MW)
India has installed capacity of 29.5 GW. Grid connected solar rooftop accounts a share of 8% in Total Solar Installation. Off-Grid SPV systems has installed capacity of approx. 950 MW. The country has only 3.5 years to reach its 40 GW target. Challenges like lack of clarity regarding net metering, lack of awareness of benefits of solar adaption are still the stumbling block in growth of solar rooftops. Discoms are also not promoting Rooftop Solar for industrial consumers as they have fear to loss the revenue. Discoms charge higher from industrial consumer so they can met the revenue required for cross-subsidy given. Rooftop solar might be a death spiral situation for discom. But Proper demand management could be a win-win situation for everyone.
What new initiative offered?
Although, Second phase of grid-connected rooftop solar photovoltaic (PV) program will help in creating the job opportunity in India. But despite of subsidy and other support till now only approx. 3 GW of solar rooftop is installed. Discoms are supporting the rooftop solar at large scale as their financial performances are poor. The second phase will help with financial assistance for rooftop scheme. Further which will be also helpful for the discoms in reducing distribution losses by on site generation.
Some state governments are also coming up with idea of solar rooftop systems on the government building, medical institution, schools and other social places. Second phase also help the domestic consumer and boost the installation in domestic sector as well. For industrial consumers this initiative also like a boon as they don’t need to opt RESCO model, they can now directly opt CAPEX model with the financial assistance from government. This initiative is estimated to bring very positive environmental impact by reducing 45.6 tonnes of CO2 emission per year.
Way forward
While India has been a frontrunner with respect to ambitious targets for rooftop solar, the probability of India achieving these targets by 2020 remains low, especially because of the policy hurdles and the current deployment rates. If cities meets the city level Solar City Program targets, these set goals are too modest to add up to what the specific states require in order for India to achieve the over-arching goal of 40 GW by 2020. Cities of Surat and New Delhi, required investment to reach the national target could go as high as INR 38.5 billion and INR 6 billion, respectively at cost-effective terms. Hence, there is an urgent need for innovative interventions to promote and finance rooftop solar deployment.
The access to cheaper finance via municipal bonds would go a long way in promoting renewable energy deployment. In particular, municipal bonds employed for the OPEX business model can take advantage of lower debt costs, which lowers the levelized cost of rooftop solar and makes rooftop solar power cost competitive in many states of India across market segments. Mandate of Solar rooftop in the Special economic Zones (SEZ) could be a push toward target as India has 200+ SEZ. These steps would require a higher level of policy coordination between local and national authorities and financial institutions, with greater financial transparency at the municipal government level. If these steps are taken, they can contribute to India’s goal of 40 GW rooftop solar by 2022.

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