The falling solar equipment costs, coupled with the subsidies offered by state governments and the increasing efficiency of modules, will certainly make rooftop solar even more financially attractive for house owners, thus triggering demand. But it will actually take much more than this to prepare the residential rooftop solar category for a take-off to the next level. Though these favourable factors have been in play for the past few years, rooftop installations in the residential category have not really picked up as anticipated despite the constantly rising electricity bills.
Unless the subsidies and downward price trend are backed by resolute measures to create more awareness among the prospective consumers, provide attractive financing options to developers and introduce effective net metering policies uniformly across the country, India will not be able to realise the immense potential of rooftop solar in the residential domain.
Another major impediment is the limited rooftop space, particularly in the emerging urban landscape dominated by multi-floored housing complexes. This problem can be effectively addressed by coming up with suitable group metering policies which will encourage residential townships to opt for rooftop solar in overwhelming numbers.
Therefore, a multipronged approach with renewed focus based on all these aspects is urgently needed to kick off rapid growth in the residential space.
Net metering is expected to emerge as a game changer in tapping India’s rooftop solar potential by enabling households to save on electricity bills and earn from the power they produce. Complemented by effective net metering policies, customised small-scale solar solutions, which enable households to optimally utilise their space for setting up rooftop solar plants, will propel installations in years to come.
Policy initiatives like viability gap funding of renewable energy projects and renewable purchase obligation will also give impetus to the rooftop solar industry. The residential market is expected to pick up in coming years on account of better policy support, lowering of solar capital costs, capital subsidies and substantial demand from the housing sector.
All said and done, achieving economies of scale will continue to be the biggest challenge for developers in view of the relatively small size of rooftop installations. A lot more can be achieved if we streamline the time-consuming processes of business development, technical feasibility assessment, contract negotiation, regulatory approval, asset financing, installation and commissioning. These processes deter scalability of rooftop solar, which is a more resource-intensive business.
The government should also promote off-grid solar PV technologies, which have immense scope in developing countries like India where millions of households in remote areas are still without electricity. Installing off-grid solar PV plants in such areas can work out to be more cost-effective. Rural areas can serve as the most promising market for off-grid solar technologies. The economic advantages of solar for the rural populace can create a cycle that drives demand for larger systems. Assuming a peak demand of 1 kWh per household, if we have 100 million Indian households without access to electricity, a potential 100-GW market for off-grid electricity is waiting to be tapped.