Demand Aggregation

Introduction

Rooftop solar projects have not experienced a high growth rate as compared to ground mounted solar projects. Cumulative rooftop installations as of December 2019 is 5.440 GW vis-à-vis a cumulative installed solar capacity of 35.7 GW. Rooftop solar has been maintained at ~10% share of overall solar capacity. This is much lower than other key markets such as US, Germany, China, Spain and Australia.

Modest uptake of grid connected rooftop solar systems can be attributed to the individual installation approach, lack of asset securitisation, non-bankable PPA, high transaction costs for the developers etc. Aggregating the demand can accelerate the uptake in a geography. Marketing / lead generation / transaction costs which form a significant portion of the total expenditure of the developers can also be reduced by aggregating the rooftop solar demand. States can adopt the aggregation route for accelerating the installation of rooftop solar systems in the state. In this process, the aggregated demand in the geography is bid-out to the developers, thereby decreasing the effective transaction costs of the developers due to aggregation and economies of scale. Interest from various developers is solicited for the aggregated demand and the demand is then awarded to the most qualified bidder. The asset is securitised by developing the draft model PPA format post consultations with all the stakeholders involved, including the lenders.

The indicators of success are evident from substantial reduction in transaction cost for developers, discovery of competitive bidding rates (lowest of INR 1.38/kWh for Madhya Pradesh), large developer turn around and market participation, creation of a ready pool of consented consumers, potential assessment and creation of centralized repository of data of sites and seamless execution of multiple tenders.

Objective

The main objective of this work package is to aggregate capacities in different states, facilitate tendering processes and also enable SBI for swift offtake of the $625 Mn loan provided by the World Bank. At the outset, it was decided that EY along with the consortium partners will help to establish industry relations and vast clientele to identify potential off takers.

As the SUPRABHA program has proceeded, the program has helped its partner states in aggregating and tendering capacities for grid connected solar rooftop projects.

Interventions

Interventions
  • Online and on-site assessment of potential sites for the specific state and Data Room creation
  • Consumer on-boarding
  • Bid support management
  • Pre-bid meetings
  • Post-bid support
Impact
  • Greater transparency for developers;cost reduction; scale of implementation
  • Cost of acquisition ; reduced timelines
  • Standardisation of documents ; best practices
  • Enhanced interaction with developers; more inclusive tender terms
  • Monitoring of implementation

Bidding Update

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