Partner & Leader (Power & Utilities), Ernst & Young India
The Government of India (GoI) has targeted to achieve 100 GW solar capacity deployment by 2022 to achieve energy security from its abundant untapped solar resource. Facilitative measures by the Ministry of New and Renewable Energy (MNRE) have thus far enabled India to achieve close to 39 GW deployment till June 2020, with an additional 35 GW in the pipeline. However, of the achieved capacity, the contribution of rooftop solar (RTS) is relatively low compared to ground-mounted solar. Several initiatives have been undertaken to give impetus to the RTS sector such as central financial assistance, concessional financing and technical assistance supports to states. The recent MNRE Phase-II Rooftop Solar Program is a progressive step in energising the sector by incentivising utilities to take a leading role in RTS development and adopting a renewed focus on the previously underserved residential sector.
To support the path laid by MNRE and to enable a holistic development of the ecosystem, the World Bank initiated SUPRABHA, a USD 13m technical assistance program in 2017 and appointed Ernst & Young (EY) to spearhead the work under this program. EY, as the project management consultant (PMC), has acted as an umbrella organisation for managing and monitoring the activities with all the implementation partners as well as worked on generating potential new areas in consultation with clients and stakeholders. Since its inception, the program has been working closely with 17 Indian states on several interventions clubbed broadly under the buckets of Policy & Regulatory, Capacity Building, Demand Aggregation, Process Streamlining and Media & Outreach.
Numerous challenges are faced by stakeholders such as developers, utilities and consumers in the domains of policy and regulation, institutional, financial and quality, thereby impeding the growth of RTS sector. A relatively volatile policy and regulatory regime wherein many instances of regressive measures that have contributed to hampering the growth of RTS in states such as Andhra Pradesh, Karnataka, Uttar Pradesh, and Maharashtra are worth mentioning. An unclear duty regime has also resulted in display of serious concerns by stakeholders thereby affecting investment in the sector. Other key issues such as priority sector lending hurdles, debt financing issues, hurdles in serving the MSME sector, liquidity issues in tendering, adoption of business models and need for digitisation for utilities, permissions for open access and virtual/group net metering have also added to the woes, thereby constraining the sector reaching its full potential.
In the face of these challenges, sustained efforts by SUPRABHA on all aspects of demand aggregation from formulating bidding documents, outreach and post-bid support have led to the aggregation of 372 MW of capacity through assessment of 4325 sites across 11 states. The state of Madhya Pradesh achieved a record lowest tariff @ INR 1.38/kWh with 45% capital subsidy for government buildings. The program has also trained more than 1500 bank officials, utility engineers, trainers, and entrepreneurs. Apart from this, notable work has been done with regulators on updating regulations for RTS for Forum of Regulators, MSMEs on development of credit guarantee mechanism options, states on RTS policy formulation, and Unified Web Portals for 12 States and with a national remote monitoring framework for solar projects for National Institute of Solar Energy (NISE), media and outreach activities for MNRE, Delhi and Madhya Pradesh besides other interventions. Today, the program has aligned itself with MNRE’s Phase II program and has extensively engaged in streamlining the processes by spearheading digitisation of the RTS sector in a big way.
SUPRABHA is also geared up to work in tandem with the vision laid out for implementation of One Sun One World One Grid (OSOWOG) with India being at the fulcrum of a global solar grid or network. This will involve a lot of cross-national dissemination of learnings and co-ordination. SUPRABHA, with its deep learnings from working in the Indian ecosystem, will be in a favorable position to assist the government in any endeavor towards meeting the goals of this international venture.
If the flurry of actions observed in local manufacturing (manifested by proposals of over 10 GW of fresh solar equipment manufacturing received by MNRE), progressive steps such as SECI issuing tender for selection of developers for supply of 5 GW of round-the-clock (RTC) power from grid-connected RE projects, and a subsequently discovered tariff of INR 2.90 (~US$ 0.038) per unit are signs of the times of come, it bodes well for India’s energy future as well as on RTS seeing sunnier days ahead.