Image Source: Vikram Solar, 3.4 MW Rattan India Project, MP
Indian solar growth has received commendations globally. MNRE’s pursuit to reach 40 GW capacity from grid connected solar rooftop installations by 2022 has been a primary driver behind this incredible growth. From 525 MW installations in 2015, to crossing the 1 GW mark in 2016, explains what Government departments and private players working in unison can achieve for the country. The growth rate for Indian rooftop solar industry sums up to approximately 113 per cent in the last 12 months, strongly supporting the hopes of reaching the 40 GW mark within 2022. The picture may seem perfect at a glance, but there are still challenges that present themselves upon closer inspection. However, to draw a comparison we must put the present scenario and challenges side by side.
The Growth Rate is Undeniable
Facilities like- custom duty concession, excise duty exemption, tax holidays, and accelerated depreciation, for commercial and industrial sectors, have spurred a growth trend of 72 MW per year to 227 MW per year since 2013. Setting up a US$1.5 billion fund for grid connected rooftop installations was a decisive action taken by the State Bank of India (SBI), Indian Renewable Energy Development Agency (IREDA) and Punjab National Bank (PNB) in collaboration with World Bank. Investments pouring in have helped states in India to install rooftop solar plants with ease. Tamil Nadu, currently leading rooftop installations, followed by Gujarat and Maharashtra, prove that financing and Government initiatives are working well. Drastic decline in solar energy tariff from INR 17/kWh in 2010 to INR 4.63/ kWh in 2015 and below INR 3 per unit recently; and 17 out of the 19 largest states in India reaching grid parity for commercial and industrial consumers, paves the path for rooftop solar growth.
At the beginning of the Indian rooftop solar growth, the Government focused on industrial and commercial installations. However, with foreign investments pouring in (US$1.5 billion), Government has decided to offer 30 percent capital subsidy to residential and not-for-profit institutional investors. For special category states, this subsidy has been hiked to the tune of 70%. Such initiatives will surely bring the common-man in the fold. New growth trends are encouraging MSMEs to opt for rooftop solar installation, as we have seen when a Muzaffarnagar based MSME successfully installed grid connected rooftop solar plant at their facility. However, challenges still exist.
Image source: Vikram Solar, St. Xavier’s rooftop plant, WB
Hurdles in Road to Success
Government policies have done a great job in supporting Indian solar growth. Primarily, subsidy based policies have helped residential, charitable, hospital institutions to select rooftop solar, and Commercial & industrial consumers are getting AD benefits. However, lack of fund generation is still an issue. Indian states developing their own rooftop policies following the central guidelines is commendable, but the variation in the policy framework has complicated the growth evaluation system. Government needs to develop and enforce policy standards depending on technological availability, and demands in the state.
Indian rooftop solar needs more focus on net metering. This model offers end-consumers an opportunity to reduce their energy expense, which can encourage more people to opt for solar. Although, 30 of the total 36 states and UTs in India have net-metering policies, lack of clarity in model implementation, requiring multiple permissions, untrained utility staff, and lack of awareness stops the country from getting expected results.
More effort is required in raising consumer awareness. Providing information about quality, cost, and benefits of going solar, clearing confusions regarding interconnecting with the grid or metering, etc. can help the common man choose rooftop solar. Although, National Solar Energy Federation of India (NSEFI), and MNRE are trying to raise awareness through television and radio media, bringing in State Nodal Agencies to work with consumers can work wonders.
Indian rooftop solar industry needs more clarity in rooftop policies. While there are lots and lots of policies at play, there are some confusions regarding their functionality. For example, Haryana has mandated solar installation for the Government buildings since 2014. However, the development part hasn’t progressed as the initiative promised. There is a confusion regarding whether the capital subsidies are still 30 per cent or to be reduced to 15% from 30%. Moreover, talks of AD benefit being revised down from 80% to 40% from April 2017, is creating tension among the consumers. Lack of clarity in KW unit scaling, and unavailability of skilled professionals in handling or explaining net-metering model has created problems in the road to solar success.
Clarity in large-scale MW policies have successfully attracted developers, so Indian Government should make the rooftop policies more clear for solar growth. Yes, Indian solar industry is growing and the country is winning. But, to reach the 40 GW target by 2022, we need more efforts in bringing the common man in the fold to ultimately succeed as a nation.