However, one part of India’s solar energy ambition still fell considerably short—rooftop power generation. Of the 100 GW of solar power, 40 GW was supposed to be from solar panels installed on rooftops. But by the end of 2023, rooftop solar energy generation was just 11 GW. And energy generated from residences was only about a fifth of that. Sectoral experts are not sure if the new deadline of March 2026 for rooftop solar energy will be met despite a slew of recent incentives and policy measures.
Solar energy is an important constituent of India’s ambitions of generating 500 GW of renewable energy by 2030. With overall solar energy generation getting traction in the last few years—capacity additions nearly doubled from 6,510 MW in 2019-20 to 12,760 MW in 2021-22—would it matter if rooftop generation is lagging, as long as the overall target is met?
From the point of view of consumers as well as the overall cost of power and energy security, rooftop solar will play a significant role, says Neeraj Kuldeep, senior programme lead at the Council on Energy, Environment and Water (CEEW), who researches solar and wind energy markets. “India aims to provide affordable power to consumers 24×7. Affordability will come from rooftop solar because the technology cost is continuously declining. Once you install the system, the cost of power is set for the next 25-30 years whereas the cost of electricity from the grid will keep rising,” he says.
Rooftop solar will also improve access to electricity in remote, hilly regions such as areas in the Northeast that might not have uninterrupted power from the grid. Vibhuti Garg, director –South Asia, Institute for Energy Economics and Financial Analysis (IEEFA), says there is a big push to set up large-scale power utilities but we have to use the potential of decentralised renewable energy (energy generated off the grid, close to the site of consumption, like rooftop solar) because we have limited land in India.
COST-EFFECTIVE OR COSTLY?
Bengaluru resident Kochu Sankar G had been looking to install rooftop solar panels ever since he saw similar systems when he visited Melbourne. He got a 3 kW system a year ago, which brought down his monthly power bills from Rs 2,000-2,500 to Rs 100-200. He estimates that he will be able to recover his investment of Rs 1.6 lakh (net of subsidy) in about three more years. “I’ve also reduced my dependence on the discom and my load on the government has come down considerably,” says the 64-yearold retiree, who is now a rooftop solar enthusiast.
For Delhi-based IT professional Nabeela Hamid, the motivation for installing rooftop solar panels was to reduce power bills in her new home, which would have air conditioners in most rooms, and to offset the emissions from it. Installing a 5 kW rooftop solar system last year for about Rs 3.5 lakh (excluding a government subsidy of Rs 50,000), has brought down the five-member household’s power bill from Rs 3,500 at the peak of summer to zero. Apart from a couple of months’ delay in getting the subsidy, the process was seamless, she says.Despite the satisfaction expressed by people like Sankar and Hamid, data shows they are in a minority. One reason for this, say analysts, is the lack of awareness among consumers and discoms. At the national level, consumer awareness about rooftop solar energy was less than 50%, with awareness in most states at 30-50%, a November 2023 survey by CEEW found.
Even if consumers might be aware of solar energy generation, there is still lack of awareness about the technology, how to get government subsidy and net metering (a method by which your bill is lowered by deducting the electricity your system produces from the electricity your home consumes), among others, says CEEW’s Kuldeep.
The government needs to promote awareness among discoms as well, says Pranav Master, senior practice director–consulting, CRISIL Market Intelligence and Analytics. “It’s very critical to help both sides understand the nuances of rooftop, including advantages, regulations and processes.” he says.
A representative of the Ministry of New and Renewable Energy even told the parliamentary standing committee on energy that a main problem in implementing the rooftop programme was that discoms were not ready to let go of high-paying commercial and industrial (C&I) consumers, according to the panel’s 2022-23 report. “For large commercial and industrial customers, awareness and adoption levels are very high. The biggest gap in the industry is that by volume, the bulk of the demand is in millions of homes and hundreds of thousands of MSMEs, in which I would include commercial establishments like restaurants and hospitals,” says Gagan Vermani, founderCEO of solar rooftop startup MYSUN.
The high initial cost of setting up a system also pinches residential customers. “Power tariff in India is hugely subsidised for residential consumers so it is not very commercially viable for them to put large systems on their rooftop. The tariff is much higher for commercial customers, which is why that sector has picked up,” says IEEFA’s Garg.
The cost of a rooftop system with solar panels for 2-3 kW, which is what a middle-income household that does not use air conditioners would need, would cost Rs 1-1.5 lakh. Then there is a lack of sufficient, affordable financing options. “Dedicated NBFCs are needed to bridge the gap of quick financing for solar projects, though interest rates will still not be as low as what traditional banks charge,” says Vermani.
With power being a state subject, policies vary, which is also why a state like Gujarat is far ahead in terms of rooftop solar energy generation than others.
BOOSTER SHOTS
The Ministry of New and Renewable Energy has been introducing changes to policies and incentives in its bid to improve the offtake of rooftop solar energy, especially among residential customers. For one, the introduction of a dedicated national portal for rooftop solar in 2022 has helped streamline the process.
“I used the national portal and felt the whole experience very seamless and efficient, with everything done online,” says Dheeraj S, a Bengaluru based software developer who got a rooftop solar system installed last year. Favourable differential between grid tariff and the cost of rooftop solar, particularly for C&I consumers, renewable energy procurement targets by corporates and favourable policies in some states have led to increased traction, says CRISIL’s Master. This is expected to take capacity addition to over 3 GW this fiscal year.
“The good thing is, year after year and at a rapid pace, we are seeing these obstacles reducing— both in the number and quantum of resistance in each of these areas, says Vermani, whose firm, he says, is seeing 20-25% growth in demand month-on-month. Most recently, the government increased the central financial assistance for the residential sector, by close to 25% for the 3 kW and below category. ET also reported that the government plans to enlist state-run power companies to offset the cost of installation.
However, “there’s still significant upside potential in terms of rooftop solar penetration,” says Master, who highlighted that the operational structure of the proposed plan and exact role of PSUs is a key monitorable. He adds: “Capacity building and awareness sessions as well as favourable connectivity options such as virtual/group net metering and peer-to-peer trading are critical to boost rooftop solar capacity additions.”
Virtual/ group net metering would allow customers to allocate excess energy to other sites and among multiple consumers via a billing software. CEEW’s Kuldeep suggests the ministry needs to embark on an awareness campaign along the lines of the pulse polio campaign to reach consumers everywhere. He adds that there should be increased access to affordable finance via solar loans at cheaper interest rates with longer tenure. A harder bullet to bite will be reducing the power subsidy for residential customers, which acts as a disincentive, particularly for those consuming less power.
Instead of waiving or subsidising power bills, state governments could provide rooftop solar systems to households, he says. “The government will recover that amount in 5-7 years and it will no longer have to provide subsidies. This way, they will break the chain of giving power subsidies to consumers.”
The various hurdles, though, are not a dampener for new solar energy targets. The Uttar Pradesh government, for instance, is looking to install solar rooftop systems on 25,000 houses in Prime Minister Modi’s constituency of Varanasi in two months—before the general elections—at the behest of the Prime Minister’s Office, according to media reports. The race to “solarise” is on.
