Chasing a stiff 2022 target of 40 GW, India's rooftop solar industry is finally coming into its own. Registering a phenomenal growth of 113 percent over the past year, the country's rooftop solar panels capacity recently crossed the 1-GW mark, a milestone that should inspire the industry to give a much-needed impetus to this nascent segment and set the pace for unprecedented capacity additions in years to come. Rooftop solar in India has everything going for it—favorable government policies, streamlined processes, and efficient regulatory mechanisms, and an investor-friendly business environment. But will it be enough to take us to 40 GW? Not really! Though leading solar consultancy services provider Bridge to India has projected an installed capacity of just 12.7 GW in 2021, a host of decisive measures can even propel us to the 40-GW mark.
While the commercial and industrial categories are driving much of the growth as of now, accounting for 63 percent of the installed rooftop solar capacity, it is the hitherto dormant residential market that can really get things moving. The residential category has enormous potential that is simply waiting to be unleashed. Even if half of the estimated 205 million households in India opt for rooftop projects with an average capacity of just 2 KW, we can easily achieve an installed capacity of 20 GWand get halfway through in no time. Once solar systems become more viable, people will start viewing them as necessities. When that happens, there will be no looking back.
The government can act as a catalyst to spur the growth of the industry by coming up with an incentive-based mechanism and formulating effective policies. The rooftop solar segment will be in for a revolutionary change when it becomes mandatory for all residential buildings to install solar PV plants. More and more states should come forward and emulate the example of the Delhi government, which is providing a generation-based incentive or Rs 2 per unit (kWh) to residential consumers over and above the central government capital subsidy of 30 percent. Easing the process, the Delhi government has also allowed people to call a third-party solar developer to get the solar PV plant installed.
A well-thought-out net metering policy can also make all the difference by enabling households to save on their electricity bills and earn from the power they produce. Through net metering, residents can source their supply both from the grid and their solar PV plants. If the supply from one of them stops, the system switches to the other. The meter records power consumption from both the sources and charges the users for the difference. Reverse net metering is also an attractive proposition that enables consumers to generate their own electricity through solar power to send the unused or excess electricity generated by their solar plants back to the grid, and even get remunerated for it. This mechanism can be a game-changer, but sadly, the implementation is lacking.
The major impediments in the way of the growth of the residential rooftop category are the prohibitive costs of solar systems, lack of financing options, poor awareness levels and the practical difficulties associated with operation and maintenance, a factor which is dissuading many developers from opting for rooftop despite its immense scope.
While the cost of rooftop solar has been progressively declining at a rate of 12% per annum over the past four years, a typical1-KW solar system without battery costs Rs 65,000-70,000 with a 30% subsidy. Since modules account for 60 percent of the costs of a solar PV plant, the development of cheaper modules, coupled with optimization of overall costs through competitiveness, economies of scale, and integration of technologies, will make rooftop solar financially more attractive to residents. But a greater concern for house owners is the lack of low-cost finance. Banks and financial institutions should extend low-interest loans to fund rooftop solar projects that getting a loan for a solar PV plan becomes as simple as securing one for a car or house.
The lack of awareness also leaves a lot to be desired, explaining why the residential category continues to lag. We have observed during our solar awareness drives in residential areas that only a small fraction of people are aware of how rooftop projects can help them save on their power bills and give assured returns. Some people are aware of the 30 percent subsidy to domestic consumers, but then, they do not know how and where to apply. To bridge this gap, the Ministry of New and Renewable Energy has put in place a centralized facility to enable consumers of all categories, including residential, to apply online for the installation of solar rooftops on their premises. Making the process hassle-free, the consumers will be directly approached by service providers.
The lack of skilled manpower for installation and operation and maintenance is another problem area. While the commercial and industrial categories are equipped with enough technical manpower to deal with snags, this is not the case in the residential category, where solution providers seldom have a provision for adequate back-up services. The situation calls for preparing a large technical workforce that is fully trained in the basics of installation, operation, and maintenance. The move will also help generate thousands of new jobs. As an alternative for house owners who find the process of installation, operation, and maintenance too cumbersome, companies like Hartek Power are planning to come up with portable 1-KW and 2-KW kits which will be as easy as installing a satellite dish.
Since 70% of India still resides in villages, rooftop solar can go a long way in electrifying rural areas as well as remote places which are not connected with the grid. Decentralized cluster power generation can work wonders in scantly populated far-flung villages, where the cost of supplying power through newly laid transmission lines can be prohibitively high. Empowering people by providing electricity to un-electrified areas, rooftop solar has done what the government could not. Lighting up the lives of people who have not known what electricity is, rooftop solar is poised to power a New India.