Reading Time: 6 minutes
SolarQuarter India magazine had a chat with Saurabh Solanki – Associate Director & Head – On-site Business Development, Amp Energy and learned about the rooftop segment and the likely trends. He also gave us insights on distributed energy generation, solar+storage, and the synergy required between rooftop solar and storage.
How have things shaped up for the rooftop segment in India in the year 2021? What trends are we likely to see this year?
Year 2021 was challenging for the overall solar industry including the rooftop segment. External factors like steep increase in the metal index and polysilicon price had impacted the overall capacity addition. The situation was worsened due to the 2nd pandemic wave which delayed project execution and the sudden steep change in the input project cost had been a double whammy for the developers. Also, on the regulatory front there were new changes proposed under MOP consumer rights amendment, which restricted the Net metering up to 500KWp and on other hand opened new avenues for Feed in tariff and net billing mechanism, which regrettably slowed down the overall capacity addition last year. However, this year we foresee that Industry is ready to adapt to the changing landscape and with the regulatory changes further growth of the segment is dependent on the positive and effective implementation by state regulators, so that an overall conducive ecosystem is created for the Roof-top Sector. Further Battery storage is also going to play a vital role in behind-the-meter roof-top projects and will be a key growth factor.
What is your view on the current distributed energy generation in India? Do you think it will help India in reaching its ambitious targets?
So far Distributed generation capacity addition was always restrictive in nature due to the overall regulatory framework. Although the market has evolved over the years but not on a consistent basis. There are some states which are more conducive, but there are other states that were more conservative in their approach. It is quite certain that Distributed Generation projects combined with On Site (Rooftop/Ground within premises) and Offsite (Open Access) projects can contribute towards the overall capacity addition to achieve the ambitious targets set out by the government given the fact that Distributed generation projects have a higher scalability potential and faster execution rate. In order to scale it to its true potential, the need of the segment is to have a more favourable regulatory and policy environment which should have incentives for all the stakeholders.
How has the focus on solar+storage been at your company?
Storage is one of Amp Energy India’s key product offerings and we have been actively working in this space. Globally, we have a pipeline of more than 2 GWh of storage projects. In India, we are executing a couple of storage projects that will come online this year or early next year. We are also working with our customers across diverse segments to assess their requirements and proposing the right storage solution to them.
How important is the synergy required between Rooftop solar and storage? What potential can this combination offer?
Storage is key to supplementing the growth of Rooftop Solar. Combined together it significantly enhances the overall value proposition to the consumer, improves application flexibility. and provides answers to the grid stability issues. With the increase of Rooftop capacity integration with the low-voltage distribution grid, there was substantial stress on the already inadequate infrastructure. Energy storage systems will play a key role in providing this flexibility by acting as a load when there is a surplus generation, as well as generating a source when there is a supply shortage. It will, thereby, stabilize the grid and smoothen the output of the solar rooftop. Also, there is a vastly untapped market where large warehouses and industrial rooftops are available but due to lower consumption in the daytime and net metering restrictions, they have not yet adopted Solar Rooftop solution, and hence Solar + Storage present a great opportunity here.
What is your view on the progress that rooftop solar has made in comparison to utility‑scale solar in India? What needs to be done to scale it up even more?
With ~6GW capacity addition to date from ~600 MW in 2015, the growth of the Solar rooftop is impressive on a stand-alone basis but nowhere close to achieving the 40 GW by 2022 target. The 40 GW rooftop solar target is part of India’s aim of installing 100 GW by 2022. But as things stand today, only utilities are expected to be nearing the finish line target and not rooftop solar.
There were multiple reasons for such slow growth in the solar rooftop sector. DISCOMS were no longer enthusiastic about Solar rooftop due to multiple factors like losing out on the quantum of power being bought by high-paying Commercial & Industrial consumers, variability of power, and the commercials in comparison to buying green power at a much lower tariff available. However, Rooftop solar currently occupies less than 3-4% of India’s total generation capacity and the losses to DISCOM from the rooftop were relatively marginal if other benefits to DISCOMs such as reductions in transmission and distribution losses, reductions in peak demands, and contributions to Renewable Purchase Obligations (RPO) have not been quantified or included in the assessment.
In the present changing landscape of the Indian power sector, the dominance of DISCOM’s as the sole energy provider will go away and co-existence will be the mantra to move forward where all stakeholders like power producers, DISCOMS, financiers, and consumers will have to collaborate to create the right environment for the growth of the sector.
What have been some of the factors behind low tariffs? Do you think these tariffs are sustainable?
The industry has seen lower tariffs due to a combination of multiple factors involving commercial and technical aspects of the overall project value chain. The Govt entities and international developers have access to very low-cost financing. Whereas on the technology front Developers are considering Bifacial modules with trackers for achieving higher CUF in Utility-scale projects. Also, there were a lot of forwarding calls on Module prices taken by Developers. Though prima-facie given the way commodity prices have changed in 2021, the tariff seems to be a bit aggressive. Additionally, a lot of policy-level changes including the push towards Make in India, BCD applicability and also change in GST rates on Solar Modules mid-year, have pushed developers on the edge to sustain the returns anticipated. Particularly, we have seen tariffs have increased in the C&I space and are likely to stabilize given the present policy and market scenario.