There are now inexpensive and workable solutions to increase the uptake of rooftop solar power in the residential sector in India. They need a nudge through suitable government schemes
Households in India can save up to 95% of their electricity bills if they install solar photovoltaic cells on the roofs of their houses, a recent study has found. Even those who may not have roof space and those who live in apartments can save up to 35% on power bills if they subscribe to a community rooftop solar photovoltaic plant, says the report by the Council on Energy, Environment and Water (CEEW), a New Delhi-based think tank.
These savings have been estimated over the 25-year lifetime of these systems. The study, titled Scaling Rooftop Solar: Powering India’s Renewable Energy Transition with Households and DISCOMs, puts forward a strong case for increasing the uptake of rooftop solar in the residential sector, which despite a 30% government subsidy and a national target of installing 40 GW of rooftop solar by 2022, has been lagging behind so far.
Although costs of solar power systems are dropping every year, Indian households have installed only about 400 MW of rooftop solar across the country. Out of this, New Delhi, which has a robust solar policy to boost residential rooftops, has installed just 60 MW.
The main obstacles for households to adopt rooftop solar power are lack of access to finance, lack of trust and awareness, unavailability of suitable roofs or issues with the ownership of roofs. Further, a lock-in period of 25 years and peoples’ lack of willingness to block roof spaces that they use for various purposes has added to the challenges. People have also expressed concerns about designs of existing buildings that may not support the weight of the solar panels. See: Residential solar rooftop fails to shine
The study that was released at the recent CEEW Renewable Energy Dialogue presented three models that can help address these key impediments in deployment of the technology. The fact that the study has been done in collaboration with BSES Yamuna Power Ltd (BYPL), a utility that supplies electricity to 1.6 million consumers in east and central Delhi, makes it more relevant, as involving electricity distribution companies and incentivizing them can play a key role in adoption of rooftop solar in the residential sector.
“Every Indian citizen has an opportunity to participate in India’s clean energy transition by adopting rooftop solar to meet their rising energy needs. Scaling-up rooftop solar is a major part of India’s renewable energy ambitions. Understanding and resolving the challenges faced by households, developers, DISCOMs, and financiers will be crucial to speeding up residential adoption of rooftop solar,” said Praveen Kumar, Additional Secretary at the Ministry of New and Renewable Energy (MNRE). “The government’s proposed scheme SRISTI will provide the much-needed impetus to the sector.”
SRISTI, short for Sustainable Rooftop Implementation for Solar Transfiguration of India, is a scheme proposed by MNRE to incentivize the installation of rooftop solar projects in India. According to the ministry’s proposal, the total incentive for the residential sector would be INR 90 billion (USD 1.3 billion) for 5 GW of installations. It has proposed a total outlay of INR 234.5 billion for 40 GW of rooftop solar installations.
The CEEW study has stressed on looking for innovative business and financial interventions to bring a solar revolution in households, ranging from low to high income, and has also factored in residential consumers living in gated colonies and in high-rise buildings. It has recommended three utility-led models — community solar model, on-bill financing model, and a solar partner’s model — to cover a range of households under rooftop solar.
The community solar model is a solution for those customers who wish to switch to solar power but do not have access to suitable roof spaces like those dwelling in high-rise buildings. This group of customers can jointly own a solar photovoltaic system or buy electricity from community solar plants. Individuals can also subscribe to get a share of solar power from the plant.
The on-bill financing model allows individual consumers with roof ownership to install rooftop solar systems by eliminating the need for huge upfront payments. In this model, consumers can take a loan and repay through savings in their electricity bills.
The solar partners model mimics the reverse auction model deployed for utility-scale large solar plants. Under this, power utilities can aggregate rooftop owners in their licence area, tender the capacity through reverse auction and sign power purchase agreements (PPAs) with developers, who would then install systems on the aggregated rooftop space. Utilities can aggregate both demand and supply. This model allows tenants as well as flat owners without roof access to avail solar electricity by paying an annual subscription fee.
Solutions for customers
Both community solar model and solar partner model are solutions for those customers who wish to derive benefits of solar but who don’t own rooftops or have exclusive rights to it. According to the study, these models can be made financially attractive to customers who are in high consumption slabs (above 400 units per month). They can also cater to those in lower consumption brackets through customized designs.
If implemented, it can bring a big solar uptake in middle- and low-income households. In the areas served by BYPL, 84% of domestic customers consume less than 400 units per month.
“A large portion of our BYPL consumers is in the residential segment. Through the CEEW-BYPL collaboration, we are happy to have created fit-for-purpose business models that will help to lower electricity bills in this segment,” said P.R. Kumar, CEO of BYPL. “For these models to realize their true potential, regulatory support would be crucial.”
The proposed business models could extend the rooftop solar market to all residential consumer segments across India. Bringing the utilities to the forefront and incentivizing them to take the lead can go a long way in achieving the rooftop solar targets.
“Rooftop solar is not only crucial to meeting India’s renewable energy targets, but will also facilitate a civil society movement to support the energy transition,” said Arunabha Ghosh, CEO of CEEW. “However, conventional rooftop business offerings have failed to spur household demand or incentivize solar developers to focus on residential consumers. Ensuring greater discom participation and adopting innovative business models is key to scaling up rooftop solar for households.”