Rooftop solar on India’s homes will help government hit its goals

Reading time: 7 minutes
9 May 2016

Shilpi Samantray, Project Officer, The Climate Group, writes about the findings from a new report, which analyzes how India can harness private investment for residential rooftop solar to help reach the governments national solar power targetsThis article is part of The Climate Group's Home2025 project.

In order to cope with rapid economic growth, a fast-rising population and continued urbanization, India’s power generation must get cleaner, cheaper and more reliable.

Thankfully, since 2005 energy and climate change has slowly taken center stage in both the domestic and international policy arena, with renewables now central to India’s energy planning process.

The government has set aggressive targets to achieve 175 gigawatts (GW) of renewable power by 2022, which includes 100 GW from solar and 40 GW from rooftop solar. And several policy initiatives have since been put in place both for grid connected and off-grid renewable energy. 

But to help reach the government’s goals, private sector investment will also be critical. The recent in-depth analysis "Unleashing private investment in rooftop solar in India," by the UK Department for International Development, Khemka Foundation, The Climate Group, Bridge to India, Meghraj Capital Advisors and the Shakti Sustainable Energy Foundation in partnership with the Ministry of New and Renewable Energy (MNRE), looks at the measures needed to attract enough investment to reach the government’s target for rooftop solar by 2022.

Based on the analysis, India Solar Rooftop Map 2016, India has a total installed solar rooftop capacity of approximately 525 MW. Reaching 40 GW will require increasing the current capacity 76 times, by growing 86% every year till 2022.

ROOFTOP SOLAR GROWTH

Today, 143 MW of India’s 525 MW rooftop solar capacity comes from the residential sector, 172 MW comes from the commercial sector and 210 MW from the industrial sector.

At the most basic level, a key factor for any sector to install rooftop solar is unshaded roof space which is not being used for other purposes and is structurally suitable for mounting the technology. But there are differences between how sectors use the power.

While residential consumers have the option to opt for a mix of completely off-grid, grid connected without storage or grid connected with storage, industrial and commercial consumers largely opt for grid-connected systems.

But based on the new research, the biggest potential for rooftop solar growth lies most evidently with residential consumers, followed by industrial and commercial consumers such as government buildings, schools and institutions.

The analysis estimates that the residential rooftop technical potential in 2014 of 64 GW will reach 71 GW by 2022. Similarly the technical potential for industrial and commercial consumers is estimated to be 30 GW and 8 GW respectively in 2014 – and 45 GW and 12 GW respectively in 2022.

This makes the total estimate of rooftop solar potential in 2022 to be 128 GW, which is much higher than the government’s target of 40 GW.

NATIONAL TARGETS

Because the current estimated cost of INR 250,000 for a 3 kW installation is beyond the reach of many residents, national policy recommendations have been given to include the cost of solar installations in home loans or home improvement loan through public banks – and made available through all commercial banks.

However, a challenge to such growth in India comes from the utilities sector. Currently they work on a cross subsidy model where revenue is generated from higher tariff industrial and residential complexes and bear the losses from the subsidy in lower tariff residential systems.

Installation of solar panels in the former sectors will cut out the revenue source and they will be incapable of bearing the fixed costs itself. So the new model must be implemented in a sequential manner so that the burden on utilities is minimized.

To get round this, key recommendations made in the report include:

  • Net metering should be operationalized to make regulations work in practice. Utilities will need trained staff and guidelines for quick connections. The regulators can then set timeframes for new connections to offer customers a better service.
  • Government should provide utilities with a fair deal that addresses concerns about revenue loss. Utilities can get short-term incentives by sending clear regulatory and political signals.
  • Investor risk can be addressed by making new grid connections simpler and faster to encourage new players to enter the market.
  • High-quality consumer information should be outsourced to neutral, trusted bodies who can help consumers make effective choices about systems and suppliers. State nodal agencies should assist independent consumer bodies to provide this information.
  • Skill development programs for regulators, industry, utilities are urgently required.
  • Policy on rooftop solar should include consultations with urban local bodies, resident welfare associations, industrial area bodies and other local groups, regarding the possibility of maximizing suitable rooftop space. Building regulations should encourage designing of new buildings to maximize suitable roof space.
  • Introduction to mandates can act as a powerful tool to encourage adoption of rooftop solar. This is possible once the viability is established and ecosystem is in place to support additional adoption.

It is clear from India’s current growth that here is tremendous scope for clean, affordable, reliable energy production through residential rooftop solar. But it is only through increasing private investment, awareness and policy level changes that we will see the real boost this sector needs – and help the Indian government achieve its ambitious 2022 targets.

Back to Home2025. For information please contact us at home2025@theclimategroup.org

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