Recently, President of India launched 2nd phase of grid-connected rooftop solar energy photovoltaic (PV) program, which is a promising news indeed. According to the plan, 38 GW of rooftop solar power capacity will be targeted for installation. Government has also announced support to provide ₹118.14 billion financial assistance to promote this initiative, which will surely speed up the solar energy growth within rooftop solar sector.
Government of India had already shown intent towards improving residential solar rooftop sector since 2018, and now the 2nd phase of rooftop growth initiative is expected to aid in the matter by offering special subsidies through central financial assistance (CFA). Case in point, Government has announced to offer 40% support for rooftop solar energy systems up to 3 kW capacity and 20% for beyond 3 kW (to 10 kW) capacity plants in residential rooftop solar sector.
Although, this new initiative is expected to bring new opportunities, we need to analyse the current state of rooftop solar power sector to measure required effort and align priorities.
Indian rooftop solar growth trajectory showed 72-113% y-o-y growth from 2016 to recent years. Planning ‘rent a roof’ policy to encourage solar panels adoption and Government approving nearly INR 118 bn for rooftop solar projects are promising a bright future for this sector. This growth trajectory is estimated to raise rooftop capacity addition by 49% in the present year from 2018.
Although there is growth, it is important to highlight that this sector only accounts for 12% of total grid connected solar panels installations in India. Current installed rooftop solar capacity is ~3 GW and the country has only 4 years to reach its 40 GW target. On the other hand, there are challenges like- lack of clarity regarding Net-metering, lack of information on benefits of solar power adoption, delays in getting subsidies, lack of clarity on policies, lack of flexible financing facility, falling rooftop solar tariff (INR 3.56/per kWh from 9.56/per kWh in 2016) stand as the biggest hurdles in front of Indian rooftop solar growth.
Impact of the New Initiative
Although, 2nd phase of grid-connected rooftop solar photovoltaic (PV) program promises growth and job creation, at the same time we need to highlight that the first phase of rooftop solar programme was able to install only ~3 GW of solar energy capacity. Besides other challenges (as listed above), first phase of Rooftop solar initiative faced issues due to lack of participation from DISCOMs, due to their financial burden. This delayed the process of Net-metering, which discouraged consumers to opt solar power. 2nd phase of this initiative have identified this issue and allocated a fund of INR 4950 Crores to aid DISCOMs. This will clearly help rooftop solar energy growth and involve residential customers, which stands at meagre ~500 MW out of total installed rooftop capacity. Additionally, this initiative is estimated to bring very positive environmental impact by reducing 45.6 tonnes of CO2 emission per year.
Therefore, it is clear that this new initiative brings forth an opportunity for job creation, climate improvement and growth in green energy revolution. However, to realize the full potential of this opportunity, India still needs favourable policy creation, strong on-ground implementation of policy, process driven approach from DISCOMs and more flexible financing options to see the second phase of grid-connected rooftop solar power programme become a success.