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Solar Policies for Rooftop projects in India

by Sindhura

Energy consumption in our developing nation is soaring and we are facing severe electricity shortages in several cities and towns. Conventional energy sources are already making a serious environmental impact. So to have an ecologically sustainable growth and to overcome energy security challenges, we have to turn to clean and renewable energies –like solar. It takes approximately 4.5-5 acres to set up a 1 MW solar PV (photovoltaic) generation plant. Although India is quite vast, given our population density, the per capita land availability is low. Exclusive dedication of such large tracts of land for installation of solar arrays will come at the cost of forsaking other necessities that require land.

So the best suitable long term design solution for India would be a highly distributed set of individual rooftop power generation systems connected through a local grid. The rooftop power plants offer several other advantages including:

-          Decrease in Transmission and Distribution (T&D) losses

-          Low gestation time

-          Improvement of tail-end grid voltages

 

The current cost of setting up an off-grid PV plant for a medium sized home is approximately Rs. 2-2.5 lakhs (for a 1-1.5 KW system with battery backup). To attract individual and average family size household consumer, the market price of solar technology has to go further down or the government should bring out policies to subsidize and support them.

 

JNNSM (Jawaharlal Nehru National Solar Mission):

While JNNSM’s main focus has been on large scale grid connected solar projects, it does give incentives for small scale grid connected and off grid projects.

Small grid connected rooftop PV plants (2 MW or less capacity, grid connection at < 33kV) are supported under the RPSSGP (Rooftop PV and Small Scale Generation Programme). The selected developers will be paid a levelized tariff as determined by State Electricity Regulatory Commissions (SERCs) for 25 years. Phase I of JNNSM targeted 100 MW capacity development of which 90MW are HT level (capacity of 0.1-2 MW) and 10 MW are LT level (<100 kW capacity). IREDA selected 78 rooftop projects of a total capacity of 98 MW from 12 states (Rajasthan, Madhya Pradesh, Andhra Pradesh, Tamil Nadu, Maharashtra, Odisha, Uttar Pradesh, Punjab, Haryana, Uttarakhand, Chhattisgarh and Jharkhand). As of September 2012, about 88 MW [Ref: JNNSM phase II document] of this 98 MW capacity has already been commissioned.

The off-grid projects were offered mainly two kinds of financial incentives: A capital subsidy of 30% on capital expenditure for the <100KW projects in grid connected areas, either by commercial or non-commercial entities. However, if the project is in remote areas, under rural electrification the capacity can be upto 250kW. There is also an interest subsidy at a low rate of 5% on 50% of the capital expenditure for 5 years.  The commercial entities can claim only one of the above two subsidies, but non-commercial entities can claim both simultaneously. The mission’s phase II has updated initiatives for off grid projects (25-100 kW), which now include:

-          MNRE’s 30% capital subsidy. With updated benchmark costs, this is Rs. 81/W for systems with battery backup and Rs. 57/W for those without.

-          Promoter’s equity should be at least 20% and the rest can be financed at the low subsidized interest of 5%/annum. The loan repayment is still 5 years.

 

The target capacity of rooftop projects under JNNSM Phase II is 200 MW (100MW for2013-2014, 100MW for 2014-2015). Under phase II of JNNSM, MNRE launched a pilot scheme for large scale grid-connected roof top PV projects with SECI as the implementing agency. The total capacity is 10 MW distributed among 6 major cities. The bid received good response in cities like Bangalore and Chennai and not so well in others. The upper limit of allowable cost was Rs. 130/W and the selection will be based on lowest offered price.

 

State-level policies:

Certain states have also announced their own solar policies with initiatives for rooftops. The following are the various state policies that include rooftop solar as a critical component in the overall capacity addition:

-          Gujarat: Gujarat already has 1.39 MW of rooftop capacity installed in Gandhi Nagar. It recently announced a rooftop scheme for development of 25 MW in 5 other cities. The DISCOMS will pay a feed-in-tariff for 25 years.

 

-          Tamil Nadu: TN’s solar policy 2012 includes a rooftop capacity target of 350 MW. In three phases of 100, 125 and 125 MW (per year), a total of 350 MW is to be developed during 2012-2015. Of this 50 MW is targeted from domestic customers who will receive a GBI of Rs. 2/kWh for the first two years, Rs. 1/kWh for the next two and Rs. 0.5/kWh for the subsequent two years. The remaining 300 MW will be from government buildings and government schemes for rural and urban lighting. It is first of its kind to announce GBI for rooftop projects.

 

-          Rajasthan: Rajasthan’s policy 2011 aims to promote rooftop projects via RPSSGP as well as another 50 MW through 1 MW capacity plants selected through competitive bidding.

 

-          Kerala: Kerala launched its 10,000 rooftop power plants programme for 2012-2013. With each applicant eligible to apply for 1 kW only, the total capacity target is 10 MW. Due to the small per capita limit; the target audience will be only households and small cottage industries. Apart from the MNRE’s 30% capital subsidy, the state is offering a discount of Rs. 39,000.

 

-          Haryana: Haryana’s solar policy targets commercial and industrial entities. It has approved two pilot projects of 100 KW with a financial assistance of Rs. 75 lakhs each.

 

-          Karnataka: Karnataka’s Solar Programme of 2009 targeted 25,000 Solar Roof Tops of 5-10 kW with net metering during next 5 years. So the total capacity potential is 250 MW. It has very recently (Jan 2013) released a tender for 1.3MW through 0.5-1kW household solar systems across some 1943 houses in several cities. The total tender cost was specified as Rs. 34 Crores.

 

-          Chhattisgarh: Chhattisgarh also mentioned in its recent solar policy (2012-2017) that rooftop plants can be setup under supported types of power generation plants. The total grid connected capacity target was 500-1000 MW by 2017, comprising of grid connected (which includes rooftops) and REC projects.

 

 

The JNNSM which supported only small scale and off-grid rooftop projects in Phase-I, now seems to be interested in developing large scale roof-top grid connected projects. This will appeal to large players and this is apparent if you look at the companies that bid for the SECI project, which included TATA power, Sun Edison, Azure among others.

As far as the state policies are concerned, it is clear they are targeting different sections of customers. Some states like Haryana, Gujarat and Rajasthan are targeting relatively larger scale projects/ grid connected which are suitable for industries/ commercial establishments. Other states like Karnataka and Kerala are offering initiatives for projects with smaller capacity limit which target domestic and house hold consumers.

 

So, whether you are interested in – large-scale grid connected/ small-scale grid connected /off-grid there are policies that support and offer incentives for that type of rooftop project.

104 thoughts on “Solar Policies for Rooftop projects in India

  1. Pooja Thakur

    Isn’t the target of 40GW overly ambitious considering providing rooftop solar in metro cities like mumbai and delhi might be difficult due to unavailability of space. also making rooftop solar installation mandatory would be seen as an attempt by people to force solar on them, to incentivize Off grid solar provision of financial incentives to organizations’ and customers in the form of flexible payment plans and tax benefits would be of great help.

    Reply

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