India Rooftop Solar Policy Risks being ‘Non-event’, Says Solar Consulting Firm

At the cost of annoying you, I am forced to say “I told you so.”

I had always maintained, in the context of Indian solar power plant targets laid down by the MNRE, that while they are on a good wicket for the grid connected solar power plants (target of 60 GW by 2022) and might even come close to achieving it, they are fairly clueless when it comes to rooftop solar (target of 40 GW by 2022).

Needless to say, while grid connected solar power plants are galloping at about 4500 MW as of Dec 2015, rooftop solar installed capacity is hardly 500 MW!

While the blokes at Bridge to India had maintained my stance as well, it is nice to know that they have come out big and bold with their scepticism.

In a blog, Bridge to India said in the last year from November 2014 to October 2015, India added 240MW of rooftop capacity, up from 154MW in the previous year.

The firm claimed that MNRE is ready to place a new rooftop solar policy in front of India’s Union Cabinet. It is expected to include detail on operational and economic support for rooftop solar in India.

The firm expects the new policy to include a 15% capital subsidy for residential consumers and public buildings, low-cost financing using funding from international development banks, zero import duties on solar equipment and continuation of accelerated depreciation benefits.

Bridge to India said: “Further action on compulsory net-metering by power distribution companies and mandates on building owners to install rooftop solar can provide a significant fillip to the market.”

It added that it will be important for the new rooftop policy to provide added detail on these previously announced schemes, otherwise it claimed the new policy would be a “non-event”.

Source: PV Tech

13 thoughts on “India Rooftop Solar Policy Risks being ‘Non-event’, Says Solar Consulting Firm

  1. Madhavan Menon

    One way to spur demand is to give incentives..

    An example of such an incentive is the Karnataka rooftop Net Metering scheme which gives an attractive Rs 9.56/kWh for every unit exported to the grid by a rooftop. I am convinced that such a scheme will really many 100s of MW to Karnataka

    Other states can also follow similar schemes

    Because nothing talks like money

    1. Narasimhan Santhanam Post author

      Hi Madhavan,

      While giving financial incentives appears like an unsustainable method, I still will have to agree with your hypothesis.

      If not anything else, the history of solar growth in Germany and Japan has clearly shown that it was financial incentives (in the form of high feed in tariffs for rooftop solar) that drove those markets (and conversely, these markets also saw solar growth decrease when these incentives were removed).

      The good news for India is that, while incentives might still be needed to spur the market in the short term, they need not splurge huge amounts of money as did Japan and Germany as the cost of solar power plants have come down significantly in the past few years.

  2. Nitesh Kumar

    Rooftop policy will work only when states also start pushing it, many states are not interested, they just want large solar plants that will provide power at cheap prices like Softbank

    1. Narasimhan Santhanam Post author

      Hi NItesh

      Cannot agree with you more.

      States need to be an integral part of the whole thing for the success of solar policy, be it for centralised or distributed power plants, but more so for rooftop solar as you have correctly pointed out.

      Well, I am not entirely sure if states just want large solar plants. For instance, if you look at just the last few months, many states have come up with excellent Net Metering schemes (Delhi, Karnataka) and more some such as Delhi are even trying to pioneer advanced concepts such as Virtual Net Metering that can enable shared rooftops (eg: apartment complexes) to take off.

      I am especially bullish on rooftop solar taking off in the Delhi / NCR region, Karnataka in the near future, and perhaps Gujarat and Maharashtra soon after.

      Let me know your thoughts, thanks

  3. REman

    MNRE and state nodal agencies should undertake a more comprehensive market understanding and come up with the right policies.

    Right now, they are just having meetings and meeting only the EpCs and module makers, and not the end users who are residences and commercial, industrial units/.

    And as result, MNRE and the state renewable energy depts not getting the right strategy

    1. Narasimhan Santhanam Post author

      I recently heard from some reliable sources that the MNRE is indeed trying to involve more stakeholders to get a better understanding. Right now, it is indeed as you are saying – they are just listening to only a limited stakeholder group

    1. Narasimhan Santhanam Post author

      Thanks Mansarovar for providing data on statewise targets

      The targets certainly look tempting, let us see how these pan out.

  4. Divyadeep Bhattacharya

    The GoI wants 40,000 MW from rooftop solar but right now India solar rooftop is only about 500 MW. so the government wants a almost 100 times growth but is not able to do much because many of the required policies – such as Net Metering – need to come from the states.

    Capital subsidy alone is not enough, IMHO

    1. Narasimhan Santhanam Post author

      Thanks Divyadeep for your comment.

      In fact, more than capital subsidies, it is Net Metering and a good tariff for the Net Metered (or gross metered) units that will spur the rooftop solar market, as these incentivise users to maximise generation instead of just getting an upfront subsidy

      Net Metering and fewer grid outages at least in urban areas will make rooftop solar really attractive to many market segments in the commercial and industrial sectors in many states


    MNRE rarely consults the industry on rooftop solar, it only likes talking to the installers. And installlers have their own vested interests and do not communicate the REAL NEEDS OF THE INDUSTRY. This is the reason why the solar rooftop in India is not taking off at all.

    Look at other countries like USA, where it has picked up because there are lots of consumer friendly policies across many states. Recently, the Investment Tax Credit also got extended until 2021

    1. Narasimhan Santhanam Post author

      Hi Mushtaq – I completely agree with you.

      The MNRE thinks subsidies can get everything done – testimony to this is the recent announcement of Rs 5000 crore subsidy budget for rooftop solar systems. Even after such a massive subsidy, the rooftop solar would only reach an estimated 4 GW by 2020 or so.

      Either the MNRE brings down the rooftop solar targets to a more “realistic” number or gets a clear understanding of ALL the drivers needed to move this sector forward.

  6. Ankur Kumar

    It always feels great to read your posts Mr. Narasimhan & the comments that follow. I particularly notices the comments of Mr. Madhavan & Mr. Mushtaq where they have mentioned about providing incentives.

    To make rooftop solar takeoff, incentives could be a good option, but one cannot ignore the financial distress of Discoms. Most Discoms have ‘red-coloured’ balance sheet. Incentives therefore cannot be incorporated across India. Even if it works, it will be a temporary solution.

    I would therefore like to put my views to reduce the cost of rooftop solar.

    Now a days aggregator model is trending whereby a consumer can buy solar products online or can avail solar services. Solar professional from across the value chain of solar can be encouraged to join these platforms and compete with each other on price to sell their products/services. This will bring competition and consequently bring down the cost of rooftop solar.

    A second and more unconventional view is to create awareness of grid connected rooftop solar under net-metering scheme in terms of intangible/ non-monetary benefits. As I said earlier, not all DISCOMS are in position to give away incentives.

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