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Karnataka has installed 221 MW on solar rooftops, of which most of the installations are in Bangalore. As per the local Electricity Supply Company in Bangalore, there are only 1800 solar rooftop buildings in the city, even though the cost of solar panels and inverters have come down dramatically in the last four years.
A major part of it is due to the frequent change of state and central solar rooftop policies, which has created confusion among developers and the consumers. Recently, MNRE has announced subsidies for solar rooftop systems for domestic consumers, but the framework to implement the subsidy scheme has not been formulated yet, causing many end-users to differ their installations for future dates.
Second, solar consumers who had experienced long procedural delays during commissioning or getting their monthly billings are reluctant to recommend to their neighbours to go for solar. it’s important to instil confidence in end consumers that there won’t be any administrative hurdles from DISCOM in commissioning and smooth operation of the plant.
Thirdly, for many who are interested in solar, but don’t have a suitable roof should be given an option to go for virtual net-metering, in which group of consumers collectively own a solar rooftop system installed elsewhere, but their electricity bills will be pro-rata credited.
Fourth, all the new service connection meters to be configured for bidirectional energy measurement with or without solar. This could improve solar commissioning from 45 days to 10 days.
Lastly, Indian banks have been reluctant to give loans to the Solar rooftop domestic segment. Most customers expect loans to be collateral-free like that of car loans.
In order to achieve the target of 2022 and beyond, MNRE and state government should take a more comprehensive approach to incentivize the state ESCOM’s and banking sector to promote solar rooftop systems.
First and foremost we need a consistent policy with unwavering support to increase rooftop penetration. This means a longer term policy with a 7-10 year horizon and not a yearly PPA price update that gets invariably delayed by 3-5 months (March to August) which are prime solar months. Solar is seasonal business and typically July to October business is dull in India due to monsoon rains. This leaves very little time in a year to do business. Also the subsidy announcement by MNRE has put the market in flux as the subsidy delivery mechanism, approval process and timelines are still not clear. So the market is now on a wait and watch mode until clarity on subsidy is given.
Meanwhile many MSME solar companies have closed down due to lumpy business and lack of working capital support. Specific support for MSME system integrators need to be
in place to both prevent unqualified players from entering the market and also give the right incentives for qualified players.
Second on the implementation side we need the grit to remove all roadblocks at all cost. This calls for a 100% transparent online process with committed timelines from application to interconnection approvals. This is being implemented now by BESCOM after ironing out several kinks.
We need a policy to be a clearing to let the market forces have it their way rather than a policy and implementation paralysis with stumps growth. The expectations on Karnataka and Central government to fix these kinks are high as the clock keeps ticking. Karnataka government has always been pro-business and pro-environment and needs to continue a leadership role in increasing rooftop installation by closing down these issues as soon as possible.”
Solar Rooftop installations comes in different applications and variants for homes, apartments, offices and industries. Most common are the grid connected rooftop solar system which works in sync with utility or distribution company grid and supports the user through notified policies as net metering or gross metering. Another alternative is off-grid system wherein batteries are used to store the solar energy and then this electricity is utilized any-time during the day or night and is used more in suburbs of cities or interior towns where electricity utility supply is weak.
Future technologies: Newer system technologies are there now, which work without requiring battery reference or grid reference for generating solar power for loads, making them cost effective. These will be the change of tomorrow over time making user independent.
Market drivers: However, to enable this market grow faster newer drivers should be considered for marketing other than government subsidies or net metering/gross metering incentives. The government should only give permission to sync with grid. Thereafter, the driving force should be marketing, with focus on –
- Focus on savings on electricity bills for marketing tool, as return of investment at prevailing tariffs is about 5 to 6 years for residential and under 5 years for industrial.
- Focus on savings against future increase in electricity bills improving return on investment.
- Focus on protecting the environment, reducing carbon emission reduction at power plants important for future healthy life of our children.
- Focus on helping the country’s economy as by making an investment decision it also helps industry
- Focus on enabling such saved energy being made available for use by farmers and other users who are short of it.
- Focus on quality products and services long term and helping Indian companies.
- Focus on using solar for standalone powering of future electric vehicles which is a tremendous opportunity for entrepreneurship and solar industry.
The above will enable this sector grow faster with higher acceptance and making homes and industries self-reliant, and farmers having better access to power as energy saved is energy produced.
The below points are suggested after having faced practical difficulties as a Solar EPC Entrepreneur.
- The solar water heater industry is enjoying a steady business . One of the reasons is that the BESCOM ( EB) doesn’t give an Energy Meter without a tax invoice of a MNRE approved Solar Water Heater. The same should be applicable for Solar Rooftops
- The paperwork should become simple. Just one application form should suffice
- The above rules could be exempted for houses smaller than 1000 sq feet
As a Solar Industry veteran who has seen and participated in the growth of Solar PV in Bangalore and India, I have a few important concerns that have to be addressed to further grow Solar Rooftop.
- Solar industry is not alone in facing the tough credit scenario in the country. Solar Power Systems financing from Banks suffers one important impediment. The impediment is the insistence of Banks for collateral security for the solar loan.This affects both the Industry that wants Solar on its rooftop and a Solar Power provider who can do this as a service. So asking Banks to extend Solar PV systems loans on the system itself as a Primary security and no collateral will be a huge boost.
2. After the above suggestion of Solar Loans without collateral is accepted, then a second factor that will boost Solar Rooftop is the ‘Renewable Power Obligation’ of consumers that will mean that Industry will have an additional reason to install solar Rooftop. Without making available Funding to install Solar rooftop to burden Industry with ‘Renewable Power Obligation’ would be very unfair.
3. The Government has a wonderful scheme called the Phase II- Grid Connected Solar Rooftop Programme by which there is a ‘Central Financial Assistance’ to residential sector, but the building owner has to apply to local Discom for the subsidy and the DISCOM will pay the approved ‘Solar EPC’ (Installer) the Subsidy, the building owner pays only 70% of the cost. The catch here is the approved Solar Provider or installer who has to win the bid for price. The red tape on this and selection based on price alone makes one deeply skeptical that such a scheme will succeed. A switch to “Direct Benefit Transfer” to the building owner based on the “Approved Cost of Solar system up to 3 KW would be the ideal solution.
Karnataka state is a pioneer in introducing policies that encourage renewables and the rooftop solar segment is no different. One of the earliest and most rewarding programs for setting up grid connected rooftop solar began in Karnataka. Despite this great policy incentive, the growth in capacities is nominal compared to the potential available. Karnataka currently has 215 MWs of rooftop solar and Bangalore accounts for 125 MW of that. BESCOM intends to achieve installed rooftop capacities of 1 GW by 2021-22. It seems unlikely at this stage but not entirely impossible. To make that happen BESCOM has to take the lead.
Changing the paradigm The distribution company employees’ outlook has to change with regard to encouraging rooftop PV installations. It is pertinent to note here that a study conducted by CEEW has concluded that there is a net positive benefit in terms of revenues for distribution companies when consumers set-up rooftop projects. For a start, a similar study can be commissioned by CEEW or other research agencies for BESCOM to see how it can help improve operations and revenues for BESCOM. This should bring about a drastic change in the way BESCOM or the other Escoms in the State perceive rooftop additions.
Demand origination The biggest challenge that Banks face in approving loans or RESCO operators face in taking up projects which are sub-scale is the fragmented nature of the roofs and profile of consumers. BESCOM has a natural advantage of being the service provider of first resort to a majority of electricity consumers in its jurisdiction. So BESCOM can take a natural lead to aggregate demand for such RESCO or EPC players. State government buildings, BESCOM’s own buildings including its sub-stations, Courts, Municipalities etc., are all low hanging fruits. BESCOM can also encourage industrial clusters or large apartment complexes to approach it to procure or run a process on their behalf.
Awareness and Policy certainty are the two other very important factors that BESCOM has to ensure. It should conduct awareness programs in different geographies of its jurisdiction. Consumer forums should be provided material to be distributed across, Banks can be encouraged to set-up loan melas near BESCOM offices to provide loans to residential consumers for adopting solar. BESCOM can list and advertise frequently the list of approved service providers or RESCO players through whom consumers can purchase equipment or services for rooftop solar. Policy certainty on net gross metering options and connectivity approvals ensure that all stakeholders know what to expect when they set-up the systems. This will help estimate accurately the benefits both long an short term of setting up such systems and this will encourage consumers to embrace solar more confidently.