Millennium Post

Rooftop hurdles

Rooftop hurdles
Rooftops of houses and offices in Gujarat’s capital Gandhinagar got a makeover last year. Over 280 houses and private buildings, and 50 government offices were fitted with solar panels. More are being added. The installed panels are together feeding 4.6 MW of electricity into power grid every day. The energy generated is enough to power around 1,000 households with an average load of 5 kWh.
Gujarat has adopted the gross metering model of rooftop solar generation in which the entire solar power generated is directly fed into the grid. A metre records the solar energy generated. The project developers, Azure SunEnergy India Ltd and SunEdison, are getting a tariff of around Rs 11 per unit. The tariff is higher than conventional power tariff and is called feed-in-tariff (FiT), which is given to promote renewable energy. Torrent Power, the distribution company (DISCOM) serving Gandhinagar, buys the clean energy and fulfils its renewable purchase obligation (RPO), a requirement that every state has to meet by buying a certain per centage of renewable energy every year. This arrangement will continue for 25 years, and the tariff will remain fixed. The 5 MW project is a pilot by Gujarat government to demonstrate the functioning of rooftop solar power system. While Gujarat has been able to execute the rooftop solar power project, such examples are few in India. Financial hurdles, coupled with policy and technical glitches, are hindering the adoption of rooftop solar power projects in the country.

Why rooftop solar projects
India has been rooting for solar power for a while now, but grid-connected rooftop solar power generation is in its infancy in the country. This is primarily because the government, till very recently, was only focussing on ground- mounted solar projects, which are not feasible in the long run as land is scarce. Approximately two hectares of land is required for 1 MW solar power plant. Over 98 per cent of the 2,700 MW grid-connected solar power installed capacity generated under the Jawaharlal Nehru National Solar Mission (JNNSM) has been through ground-installed solar projects. JNNSM was launched in 2010 under the National Action Plan on Climate Change. In the Rooftop Photovoltaic and Small Scale Solar Generation Program launched under JNNSM to promote rooftop projects as well, nearly all of the installed 90 MW capacity is ground mounted because there was little clarity over installation rooftop solar projects. The programme is over now.

In 2012, the Ministry of New and Renewable Energy (MNRE) launched a pilot scheme to study grid-connected rooftop solar power in India. The scheme has sanctioned rooftop projects with a total capacity of 26 MW and has so far completed projects with a total capacity of 3 MW. The Solar Energy Corporation of India (SECI), the nodal agency for the scheme, has released a tender for another 50 MW in March this year. The last two years have also seen around eight state governments release rooftop solar power policies with net-metering, which allows self-consumption of solar power (see ‘Net-metering rooftop solar projects’). Other states are likely to follow. The total capacity targeted under these state policies is around 700 MW which is expected to be installed in the next five years.
Though no clear estimates are available on the potential of rooftop solar power in the country, one can get an idea from an analysis done to estimate rooftop solar power potential in Delhi. The capital has over 31 sq km of rooftop space that can be used for solar projects, says a report jointly prepared by Greenpeace India and Delhi-based solar power consultant Bridge To India. The report, Rooftop Revolution: Unleashing Delhi’s Solar Potential, says 2,557 MW of solar power can be generated on Delhi rooftops alone, which, experts say, is enough to offset 45 per cent of Delhi’s current peak power demand. ‘Several cities and towns in the country are experiencing growth in their peak electricity demand, which DISCOMS are finding difficult to meet. The deficit is at times is met through diesel gensets,’ says Ashwin Gambhir, policy researcher with Prayas energy, a non-profit in Pune. ‘This peak can be substantially offset by generating solar power on rooftops.’ Solar power generation is also cheaper (Rs 8-9 per unit) than diesel power (Rs 18-25 per unit).

Another advantage of grid-connected rooftop solar projects is that the power generated is usually consumed locally which reduces transmission and distribution losses. In the case of centralised projects, close to 30 per cent powerw gets wasted during transmission over long distances.
Renewable energy experts say that generating power on rooftop is making economic sense with the price of solar panels falling and consumer tariffs rising. ‘Both are going to equalise soon and solar power will no longer be seen as an expensive option,’ says Jasmeet Khuran of Bridge To India.

Financial hurdles
High upfront cost of installing the rooftop solar system has been the biggest hurdle in its adoption. It costs around Rs 1 lakh for 1 kW solar power system. ‘Despite a sharp fall in the cost of solar panels, the price of putting up the entire system in place is still expensive, especially for households,’ says a senior MNRE official.

The ministry is providing a 30 per cent subsidy on setting up solar projects to offset the financial burden. Some state governments are providing additional subsidy to lessen the consumer’s burden. For example, Tamil Nadu, which plans to have 10,000 grid-connected solar rooftops for domestic consumers, has announced a subsidy of Rs 20,000 per kW. The combined subsidies will reduces the cost by 50 per cent. The subsidies, however, have become a hurdle because of delays in disbursement. ‘Subsidy of around Rs 4 crore for our approved projects is lying with the MNRE since last year,’ says Manu Karan, who heads the rooftop solar business for SunEdison Ltd. ‘This is delaying the installations because the ministry says that unless subsidies are cleared, we are not allowed to go ahead with installations,’ adds Karan. Official sources in MNRE say subsidies for solar projects have not been released since last year because the ministry is facing cash crunch. ‘We will take a decision soon,’ says a senior MNRE official.

Renewable energy policy analysts believe subsidy for rooftop solar projects is not needed. ‘The commercial and industrial customers in some states (such as Maharashtra) are already paying tariffs comparable to or higher than solar power costs. So, what is needed is a facilitating framework of net metering and not subsidies,’ says Gambhir. Hemant Bhatnagar, technical expert with GIZ, the German agency for promoting sustainable development projects, says, ‘In some states, even government buildings are paying a tariff of Rs 7-8 per unit. If they install rooftop solar system, the levelized tariff for 25 years would come around Rs 9 per unit. Given the way grid tariffs are rising, grid parity would reach in the next two to three years.’ GIZ is helping state governments devise solar rooftop policies.

‘The government should instead give generation-based incentive, which is extra remuneration on per unit of energy generated. It can be gradually reduced as grid parity approaches,’ says Bhatnagar. Tamil Nadu, for example, plans to give an incentive of Rs 2 per unit for the first two years, Rs 1 per unit for the next two years and 50 paise per unit for the subsequent two years to attract domestic customers.

Rooftop solar projects have also failed to pick up because financial institutions have been reluctant to give loans. ‘Banks don’t find these projects bankable because of lack of experience in this sector. They are also apprehensive because most state DISCOMS are debt-ridden and are unlikely to pay the premium for clean energy,’ says a developer. According to Ministry of Power, DISCOMS across the country have a debt of Rs 1.9 lakh crore in 2012. ‘Renewable energy should be made a priority lending sector for banks,’ says Pankaj Verma, GM, solar marketing, Jakson engineers Ltd, a Noida-based solar project developer.

By arrangement with Down to Earth magazine
Ankur Paliwal

Ankur Paliwal

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