Faced with poor performance of the rooftop solar (RTS) programme in the residential space, the government on Friday said that individual households can now opt for a vendor of their choice, and the subsidy amount for purchasing the equipment will be credited directly into their bank accounts.

Simplifying norms

In a review meeting on the performance of the RTS programme in residential areas, on Wednesday, the Power and New & Renewable Energy Minister RK Singh directed officials to simplify the scheme in an attempt to boost its implementation as only about one-third of the allocated capacity has been installed so far. India has significant rooftop solar potential at 1.7 petawatt-hour per year.

MNRE said that now it is not necessary for a household to get the RTS installed by any of the listed vendors of a state Discom. The households can also install the equipment on their own and inform the Discom about it along with a photograph of the system. The Discom will then have to ensure that net metering is provided within 15 days. “Subsidy, which is 40 per cent for RTS of up to 3 kilo watt (KW) capacity, and 20 per cent beyond that, up to 10 KW, will be credited to the householder’s account by the Discom within 30 days of installation. The option of getting the rooftop installed by any of the vendors designated by the DISCOM remains available as earlier. In such cases, the householder may also select the solar panel and inverter of his choice,” it added.

Industry upbeat

Industry and analysts say that simplifying modalities will help address key bottlenecks like high cost of solar equipment, complicated subsidy system, and above all will help meet India’s ambitious targets of arresting climate change and reducing greenhouse gas emissions. Besides, it will open up the market and help generate demand. However, the key would be performance and coordination of the state Discoms. ICRA’s Senior VP & Group Head Sabyasachi Majumdar pointed out that– “One of the factors which has hindered the growth of RTS industry has been the relative slowness in implementing net metering by Discoms, and also timely adjustment of payouts to rooftop plant owners. Government’s proposals will take care of both constraints and incentivise investments in RTS. However, timely implementation at the Discom level will be the key.”  Welcoming the development, CEO of industry body National Solar Energy Federation of India (NSEFI) Subrahmanyam Pulipaka told BusinessLine that the association will soon present a roadmap to MNRE for achieving the target of 100 GW residential RTS. “As a country our solar energy journey was predominantly driven by the government to generate demand, but today we are at a juncture where we are shifting from government-driven to market-driven demand. Today’s announcement will take us closer to this transition. The moment a consumer gets the freedom to choose, the market opens up. The programme will be driven by quality, credibility and will drive growth. We expect a very good uptake in the residential RTS segment,” he noted. “NSEFI will soon propose a road map to the government, in a week or so, for establishing a target of 100 GW of residential RFT solar in India. First, we will suggest policy initiatives and enabling ecosystem measures required to achieve the target. Second, we will run awareness campaigns in 10 states every year. We will meet Discoms, RWAs and consumers. We will have 100 sessions every year for these awareness campaigns,” Pulipaka added.

High costs

The Parliamentary Standing Committee on Energy in a report on MNRE’s demands for grants for FY21 said that it feels that RTS are not attractive for consumers due to high maintenance cost and complicated procedures of disbursement of subsidy. The report was placed in Parliament in March 2021. The panel suggested that the Ministry focus on this programme on a mission mode . At present, the discovered rates for solar panels are around ₹38,000-50,000 for 1-10 kw (kilowatt) and ₹32,000-52,000 for 11-100 kw depending on the states.

RTS prog status

Under the Intended Nationally Determined Contributions (INDCs), India has committed to increase the share of non-fossil-fuels in installed power capacity to 40 per cent by 2030, which was raised to 50 per cent at COP 26. The Government also set the target of 100 GW of solar power capacity by 2022, of which 40 GW is to be achieved through RTS, and of this 4,000 MW is for residential RTS. In December 2015, Phase-1 of the RTS programme was approved targeting 2,100 MW capacity addition by FY20 through central financial assistance (CFA). Against this, as of December 5, 2021, an aggregate capacity of 2,098 MW has been sanctioned of which 1,319 MW was reported to have been achieved.

Incentives for Discoms

Subsequently in March 2019, phase-2 of the RTS programme was launched with two components. Under component A, the ministry aims to set up 4,000 MW capacity in the residential sector with CFA, while under component-B, the target is to incentivise Discoms based on achievement towards initial 18,000 MW of grid-connected rooftop solar plants. As of December 5, over 3,339 MW capacity has been sanctioned to various DISCOMs, while around 1,070 MW capacity has been reported to be installed. Cumulatively, more than 5,570 MW RTS capacity is reported to be installed in the country and the Ministry has released around ₹3,147 crore as CFA .

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