Prospects and Challenges of Rooftop Solar in India

JUN 14

Mains   > Environment & Ecology   >   Global warming   >   Renewable energy

WHY IN NEWS:

  • To generate solar power by installing solar panels on the roof of the houses, Ministry of New and Renewable Energy is implementing Grid-connected Rooftop Solar Scheme

WHAT IS ROOFTOP SOLAR POWER STATION?

  • It is a photovoltaic (PV) system that has its electricity-generating solar panels mounted on the rooftop of a residential or commercial building or structure
  • Rooftop mounted systems are small compared to ground-mounted photovoltaic power stations with capacities in the megawatt range

TYPES OF ROOFTOP SOLAR SYSTEM:

  • System with storage facility:
    • The solar electricity is stored in the battery and can be utilized during night also when the sun is not available. 
  • Grid Connected SRT System:
    • In these systems the DC power generated from Solar PV panel is converted to AC power using power conditioning units.
    • Homeowners are given the option of net or gross metering.
      • In the case of gross metering, the DISCOMs pays the rooftop solar PV homeowner for the power injected into the grid at the power-purchase agreement rate and charges the homeowner for the power drawn from the grid at rates applicable to all consumers in the category, offering little incentive to homeowners.
      • In the case of net-metering, the prosumer is paid for the surplus power injected into the grid, if her consumption is less than generation. If the prosumer consumes more than what she generates, she is billed by the discom for the power consumed in excess of own generation at the applicable rates.

STATISTICS

  • The Government of India has set a target of installing of installing 175 GW of renewable energy capacity by the year 2022, which includes 100 GW from solar
  • Out of the 100 GW target for solar, 40 GW is proposed to be installed on rooftops
  • At present the Solar Roof Top (SRT) systems account only for 12% of solar power generation.
  • The installed capacity of the SRT system augmented from 117 MW in 2013 to 5.9GW in 2020.

SIGNIFICANCE OF SOLAR ROOFTOP SYSTEM

  • Increasing the accessibility to electricity:
    • Only 87% of Households have access to grid-connect electricity.
    • 13% Indian households are either using non-grid sources for power or "do not use any electricity at all."
    • SRT systems could be game changers for these households.
  • More efficient:
    • There is no transmission loss in utilization of electricity generated through the SRT system.
    • Further, maintenance cost of SRT System is also less as compared to the maintenance of solar parks.
    • Since solar parks are mostly located in arid and semi-arid ecosystems, more water is needed to keep them dust free.
  • No additional space required for installation:
    • One of the biggest advantages of rooftop solar panels is that they can be installed on any type of roof. So, people don’t need to vacate a land or invest in buying additional land.
  • Environment friendly:
    • SRT system could be used as a clean back up for compensating power outages in urban areas. 

CHALLENGES:

  • Apathy of DISCOMs
    • DISCOMs have a fear that if rooftop solar can grow without restrictions, they will lose some of their largest and best-paying customers.
    • Because of this reason DISCOMSs disincentives SRT in commercial enterprise as these enterprises pay higher tariffs (against residential consumers).
  • Issues with obtaining statutory approvals:
    • Statutory approvals vary from state to state.
    • Even within a state, the process of obtaining these approvals is not standardized.
    • Nodal agencies also impose additional clearances not specified in the state’s solar policy
  • High cost of installation:
    • Installation of the SRT system is capital intensive.
  • Credit challenges:
    • Financing continues to be a challenge, especially for smaller consumers or those with lower credit credentials.
    • Also, a large portion of the credit facility for rooftop solar lies undeployed with the banks.
  • Restrictions by the state:
    • Some states have restricted RESCO model in the rooftop, while some have put a restriction on the size of the plant that can be installed at a consumer’s facility.
  • Lack of awareness:
    • Common people are either not aware of Government subsidies or find the process of availing it too cumbersome
  • Import dependency:
    • India lacks a manufacturing base of solar PV as about 90% India’s soar module requirement is fulfilled by imports and a major proportion of it comes from China
  • Frequent policy revisions
    • The Solar Policy issued by the State Electricity Regulatory Commission (SERCs) undergoes extremely frequent changes and revisions.
    • Such frequent revisions de-stabilise the sector and hinder its growth.
  • Taxation issues:
    • Indigenous solar PV industries are grappling with challenges related to duty inversion (zero duty on fully made modules but high duties on raw materials).

STEPS TAKEN TO PROMOTE ROOFTOP SOLAR SYSTEM:

  • SRISTI (Sustainable Rooftop Implementation for Solar Transfiguration of India)
    • It is a type of scheme that will offer with financial incentive to the beneficiary for installing solar power plant rooftop projects within the country.
  • Grid-Connected Rooftop Solar Scheme:
    • It aims to achieve a cumulative capacity of 40 GW from Rooftop Solar Projects by the year 2022.
    • In a grid-connected rooftop or small Solar Photovoltaic (SPV) system wherein the DC power generated from the SPV panel is converted to AC power using the power conditioning unit and is fed to the grid.
    • Under this scheme Ministry is providing 40% subsidy for the first 3 kW and 20% subsidy beyond 3 kW and upto 10 kW.
    • The scheme is being implemented in the states by local Electricity Distribution Companies (DISCOMs).
  • SPIN web portal:
    • It is a National Web Portal deployed by the MNRE to assist in the implementation of Grid Connected Rooftop Solar Programme.
  • State Rooftop Solar Attractiveness Index–SARAL:
    • This index evaluates and ranks all the states according to their performance, growth, level of maturity, policy framework, and implementation environment in the Solar Rooftop sector.
  • Geo-tagging of Rooftop Solar project
    • It is carried out in coordination with the Indian Space Research organization (ISRO), for traceability and transparency
    • It persuades the states to notify the net/gross metering regulations for the SRT projects.
  • Suryamitra Skill Development Programme (SSDP):
    • It aims to develop the skills of youth, considering the opportunities for employment in the growing Solar Energy Power Project
  • Assistance from multilateral institutions:
    • Concessional loans from World Bank and Asian Development Bank (ADB) to the State Bank of India and the Punjab National Bank for disbursal of loans to industrial and commercial sectors, where Central Financial Assistance is not being provided.
  • Steps are taken for implementation of the SRT system projects in the government sector:
    • MNRE is implementing the scheme for setting up grid-connected solar PV power projects by central public sector undertakings (CPSUs) and government organizations with Viability Gap Funding (VGF).

SUGGESTIONS

  • Ensure an equitable distribution of the savings between the DISCOM and the rooftop owner:
    • It is recommended that the DISCOM purchases the entire energy generated by rooftop plants. The entire electricity produced should be metered and exported to the grid.
    • The DISCOM should buy the rooftop solar power at their actual Cost of Supply (ACOS = APPC + T&D costs) and continue to supply electricity as usual to the customer at its regular tariff.
    • Therefore, the DISCOM would not suffer any loss of revenue on account of rooftop solar.
    • Unlike the current scenario where the entire benefit of rooftop solar was going to the rooftop owner at the cost of the DISCOM, this will ensure an equitable distribution of the savings between the DISCOM and the rooftop owner.
  • Bringing uniformity in statutory approvals:
    • Approvals should be standardised, clear timelines should be defined and adhered to.
  • Enhancing capacity in the entire solar value chain:
    • Fragmentation is a major hurdle for the growth of Solar PV manufacturing units as it results in higher cost of production.
    • Steps need to be taken to address the challenges of lack of integrated set up, economies of scale and availability of modern technology.
  • Aiding financing for rooftop solar projects:
    • A credit guarantee scheme should be created to mitigate risk for customers with lower credit rating.
    • This will enable such consumers to avail bank financing for their rooftop solar projects, and also enable developers to offer such consumers the RESCO model, as the inherent credit risk issue will be taken care of.
  • Skill development:
    • To meet the demand of a skilled workforce for installation, maintenance and repairs which are expected to grow with the growth of the sector.
  • Making policy people centric:
    • Processes for approving net metering applications and disbursing subsidies should be efficient and hassle free to motivate consumers to invest in this new technology
  • Removing restrictions on RESCO model and capacity caps by states
    • All restrictions on Rooftop solar plants based on ownership should be removed.
    • Performance measurement data suggests that RESCO plants show better continued performance in the long run.
    • Thus, the policy should encourage the growth of the RESCO model in the rooftop segment, just as it has in the case if the utility segment

PRACTICE QUESTION:

Q. Why the growth of rooftop solar segment in India is lagging despite various steps taken to promote the sector? Give recommendations to expedite the growth of this segment?