Rooftop Solar Installations

According to Mercom Research India, rooftop solar capacity installations in India fell 29% to 320 megawatts (MW) in July-September 2022.

What are the Results?

• Cumulative Installations: As of the end of the third quarter of 2022, cumulative rooftop solar (RTS) installations stood at 8.3 GW.
• Gujarat overtook Maharashtra and Rajasthan as the state with the most rooftop solar installations.
• The top ten states accounted for roughly 73% of total rooftop solar installations.

Installations are declining:

• Installations were also down 11% from January to September, totaling 1,165 MW, compared to 1,310 MW in the same nine-month period in 2021.

Decline Causes:

• Solar installations are declining as their costs have risen.
• The market is experiencing supply issues as a result of the Approved List of Module and Manufacturers (ALMM), and installers are finding it difficult to operate in general.

What is rooftop solar?

• Rooftop solar is a photovoltaic system with electricity-producing solar panels mounted on the roof of a residential or commercial building or structure.
• Rooftop-mounted systems are small in comparison to ground-mounted photovoltaic power stations with megawatt capacities.
• Rooftop PV systems on residential buildings typically have capacities ranging from 5 to 20 kilowatts (kW), whereas those mounted on commercial buildings frequently have capacities of 100 kilowatts or more.

Challenges:

Policy Flip-Flopping:

• Although many businesses began to use solar energy, policy flip-flopping (a sudden real or apparent change in policy) remained a major barrier, particularly for power distribution companies (discoms).
• The Goods and Services Tax (GST) Council of India recently increased the GST on many solar system components from 5% to 12%.

Inconsistent Net and Gross Metering Rules:

• Net metering regulations are one of the most significant challenges facing the industry.
• According to a report, the Power Ministry's new rules that exclude rooftop solar systems (RTS) with capacities greater than 10 kilowatts (kW) from net-metering would stymie the adoption of larger installations in India, thereby affecting the country's rooftop solar target.
• Net metering is required for rooftop solar projects up to 10 kW and gross metering for systems with loads greater than 10 kW under the new rules.
• Net metering allows Roof Top Solar systems(RTS) to feed excess power back into the grid.
• State DISCOMs compensate consumers with a fixed feed-in-tariff for solar power supplied to the grid under the gross metering scheme.

Low-cost financing:

• The Union Ministry of New and Renewable Energy (MNRE) has advised banks to provide RTS loans at reduced interest rates. However, nationalised banks rarely lend to RTS.
• As a result, many private players have entered the market, offering RTS loans at higher rates such as 10-12%.

What are the Schemes for Promoting Solar Energy?

• Rooftop Solar Scheme: The Ministry of New and Renewable Energy is implementing the Grid-connected Rooftop Solar Scheme to generate solar power by installing solar panels on the roofs of houses (Phase II).
• It aims to achieve a cumulative capacity of 40,000 MW from Rooftop Solar Projects by 2022.
• Kisan Urja Suraksha evam Utthaan Mahabhiyan: The scheme covers grid-connected Renewable Energy power plants (0.5 – 2 MW)/Solar water pumps/grid connected agriculture pumps.
• International Solar Alliance (ISA): The ISA, is an Indian initiative that was launched by the Prime Minister of India and the President of France on 30th November 2015 in Paris, France on the side-lines of the Conference of the Parties (COP-21), with 121 solar resource rich countries lying fully or partially between the tropic of Cancer and tropic of Capricorn as prospective members.
• One Sun, One World, One Grid: It has been taken up under the technical assistance program of the World Bank. Its objective is to aid in developing a worldwide grid through which clean energy can be transmitted anywhere, anytime.
• National Solar Mission a part of the ( National Action Plan on Climate Change).

Way Forward

• The RTS requires simple financing, unrestricted net metering, and a simple regulatory process. Public financial institutions and other major lenders may be required to lend to the segment.
• Some existing bank credit lines could be adapted to meet the challenges of the Indian RTS market, making it more appealing to developers in this space.