Founder, Emergent Ventures India (EVI)
At the end of CY 19, India’s total installed capacity of rooftop solar (RTS) was around 5,440 MW, an impressive 41% jump over the previous year. The Ministry of New and Renewable Energy (MNRE) has embarked on achieving the ambitious target of 100 GW solar by 2022, out of which RTS target is 40 GW.
In a market where the demand for electricity is growing, RTS offers many economic advantages such as savings in transmission and distribution losses, savings of investment in network infrastructure and lower cost of energy vis-à-vis average pooled purchase prices paid by the utilities. There is no effective loss of customers for the utilities, because despite the growth of RTS, the overall demand in the economy will grow, albeit slowly. RTS therefore will result in savings for utilities and the economy, which we estimate to be ~ INR 1.5-4.0/kWh across India. The commercial and industrial (C&I) sector has seen the maximum rooftop installation till date as the higher grid tariffs for these consumers makes installing rooftop solar an attractive commercial proposition in most states.
The World Bank-led multi-stakeholder Technical Assistance (TA) program - SUPRABHA has helped in upping the game in demand aggregation of RTS in India. SUPRABHA has been highly successful in enrolling utilities to anchor rooftop solar programs. In any country this is a challenge, more so in India, where utilities are grappling with many challenges simultaneously. Utilities can bring the rooftop solar close to consumers who otherwise are unlikely to be the targets of Renewable Energy Service Companies (RESCOs). Consumers lack sophistication and buying power to set-up competitive solar rooftops on their own and utilities can facilitate by implementing innovative business models.
Utility anchoring is a pioneering concept. We, at Emergent Ventures India (EVI) are proud to be involved in identifying its importance way back in 2016. Despite perceived concerns about these business models, we are delighted that they are being scaled up, thanks to SUPRABHA TA, and that we got the opportunity to participate in its implementation. Utilities would be required to play greater roles in further integration of RTS, Electric Vehicles, renewables etc., in India. We hope Indian grids would be transformed in the next decade, and SUPRABHA's activities would have played an important part in this journey.
SUPRABHA TA program has made significant progress in assisting agencies of 17 states in creating an enabling framework for large-scale deployment of RTS projects. While Madhya Pradesh achieved a record low tariff at INR 1.38/kWh with 45% capital subsidy for RTS installations under RESCO model in Government & Institutional buildings, Delhi and Bihar achieved very low bids for their residential sector under capital expenditure model (CAPEX). In terms of demand aggregation, EVI has developed online Data Rooms for Delhi, Chandigarh and Haryana for RTS implementation in residential and government buildings.
However, despite the obvious advantages of RTS, we see several challenges which still persist. The primary challenges are ‘unfavorable policy’ regimes, lack of ‘easy finance’, perceived ‘credit’ and ‘access’ risks, and ‘lack of awareness’ amongst consumers. Utilities still see RTS, especially when adopted by high paying commercial and industrial segments, as loss of customers. This has resulted in unfavorable policies in some important states.
When utilities play pivotal roles in implementing RTS programs, they would begin to realize the benefits and hopefully take proactive measures in reaching out to customers. In the next phase, they could channel finance to customers through models such as ‘on-bill-financing’ and ‘super RESCO’ bringing down the overall risk in the RTS portfolios and improve the scalability.
The benefits of net-metering system would be enhanced multifold when highly subsidized segments such as ‘agricultural pumps’ and ‘low income residential’ segments are served by the distributed solar, which will provide a much cheaper option for serving these customers and will reduce the subsidy burdens on the utilities. With widening access, distributed solar will also contribute to other initiatives such as ‘electric vehicles’ (charging infra powered by solar), ‘clean and ‘smokeless’ cooking (induction cooking) and ‘smart agriculture’ (agro-photovoltaics, green houses, electric farming equipment powered by solar etc.)
Appointed as the implementing body for the One Sun One World One Grid (OSOWOG) initiative, which is to be executed in three phases, SUPRABHA TA looks forward to applying its past learning to this ambitious program.
I believe that harnessing the power of the sun, SUPRABHA TA will truly scale India’s sustainability journey.