New Delhi: In India’s overall push for the adoption of renewable energy, one consistent laggard has emerged — rooftop solar. Now, the Modi government seeks to address the issue of why rooftop solar capacity is just one-fourth of its targeted level, with a new scheme announced on 22 January, Pradhan Mantri Suryoday Yojana (PMSY).
The aim of the scheme is to install rooftop solar units on one crore houses, but success will depend largely on the government’s ability to surmount the myriad issues plaguing the sector at present.
Residential rooftop solar is plagued by certain logistical issues, such as a lack of clarity over roof ownership, the influence of conventional power distribution companies which stand to lose out with the spread of renewable energy, a lack of awareness about rooftop solar, and affordability issues.
On the flip side, experts see the PMSY announcement as a positive move that could emerge as an important step, if enacted effectively.
At the moment, however, no timeline has been finalised and officials from the Ministry of New and Renewable Energy say specific details are yet to be fleshed out.
“Going by the data, there are about 7-8 lakh households with rooftop solar systems,” energy specialist Neeraj Kuldeep, Senior Programme Lead, Council on Energy, Environment and Water (CEEW), told ThePrint. “One crore will mark a 14-fold increase, which is quite big. We might add about 20-25 GW (of solar energy capacity) if we reach the one crore goal.”
In 2019, the Ministry of New and Renewable Energy had announced the Rooftop Solar Programme, under which 40 GW of energy was supposed to be derived from rooftop solar by 2022, a goal that was then delayed to 2026.
According to an answer presented in the Lok Sabha in December 2023, 10.4 GW of rooftop solar has so far been installed. While this is one-fourth of the target, it is still 46 percent higher than the installed capacity in 2019.
Rooftop solar can be installed on residential buildings as well as office buildings. In India, residential rooftop solar forms a small share of overall rooftop solar installed capacity.
While there are no recent official details pertaining to the installed capacity of residential rooftop solar, experts say the current residential rooftop solar capacity falls at around 2 GW.
“The PM’s goal is achievable although it may appear ambitious when looking at past growth,” Manikkan Sangameswaran, Executive Director & CEO, Radiance Renewables, told ThePrint.
A household that consumes 200 units of electricity (200 kilowatt hours), typically the case in rural areas, needs a rooftop of about 200 feet, which is by and large available, he explained.
A report by CEEW published in November 2023 says residential space in India offers rooftop solar energy potential of 637 GW. However, the residential sector continues to be underutilised, due to questions of rooftop ownership and the problems faced by distribution utility.
This is, however, the theoretical potential. The reality falls short of this by a significant margin, the report adds.
For example, it found that over 70 percent of households consume less than 100-kilowatt hour of electricity, and that rooftop solar units don’t make economic sense at such low consumption levels.
“Within the residential segment, the early adopters (of rooftop solar) so far are the high paying residential consumers and not rural and semi-urban households. While the opportunity exists in rural and semi-urban areas, there is significant inertia to move to rooftop solar due to limited awareness, high upfront costs, lack of financing, low paying capacity, etc,” states the report.
Rooftop solar has seen a noticeable uptake in Gujarat, which currently has the highest installed capacity, of 3.174 GW.
According to a report published last year by the Centre for Science and Environment (CSE), only 24 of 36 states and Union territories have been able to reach their rooftop solar targets. Gujarat has “realised 90 percent of its targets” owing to “dynamic and supportive policies”.
“Various state governments have also taken initiatives to deploy rooftop solar, such as by enforcing additional subsidies,” said Anumita Roychowdhury, executive director, CSE. “But the end users need to understand how it’s going to help them. It helps to lower their electricity bill (as electricity is locally generated) and get compensation for the rooftop space.”
Also Read: India’s first fully solar village in Gujarat lights up the lives of its poor residents
Who owns the roof?
In urban spaces, fundamental issues arise because rooftop ownership is a grey area. There’s often no clarity on who exactly owns a roof. But if this is straightened out, the electricity from rooftop solar, apart from being used, can also be sold back to the grid — coming in as an income source. However, this would require comprehensive systems to be in place, said Roychowdhury.
Meanwhile, there is the CAPEX model, through which benefits are reaped by the owner of the rooftop solar system, as opposed to distribution companies. Under this, an agreement is reached with the owner, who takes responsibility for installing the system. The electricity sold back to the grid compensates for the original capital investment.
“As a rooftop owner, you don’t feel the weight of the capital investment, since the cost is being recovered over time — by selling electricity back to the grid,” said Roychowdhury.
While this works well in commercial settings, residential spaces could pose an issue, due to the lack of ownership clarity.
Indian cities also suffer because buildings are packed in like sardines, that too in small spaces. “There are many roofs that are not viable for rooftop implementation due to shadows cast by taller neighbouring buildings,” Sangameswaran said.
There are other kinks that also need to be worked out. The role of distribution utilities needs to be reassessed and reimagined. Moreover, there are models which seek to eliminate the role played by them.
Distribution companies are presently key players in fostering the implementation of rooftop solar systems, and to the country’s overall energy transition. But, according to Roychowhdury, the move makes them debt-ridden and contributes to their “vague financial position”. With the spread of renewable energy, they risk losing out on their highest-paying customers, who pay heavy tariffs for conventional, grid-based electricity. For commercial building owners, the tariff rate on rooftop solar systems is relatively lower.
“People are also informally tapping into rooftop solar systems, which further affects their economic burden. We need to figure out how to address these issues and assess the kinds of reforms that are needed,” she said.
High electricity tariffs on conventional electricity make rooftop solar a more attractive option for commercial and industrial customers, says another report by CEEW, published September 2019. These high-paying consumers then enable cross-subsidies for agricultural and residential consumers.
As rooftop solar deployment increases, concerns about the loss of revenue to discoms also heighten.
CEEW research suggests that in order for discoms not to lose out, they should promote rooftop solar among users of subsidised electricity.
“The simplest solution for discoms is to target the subsidised consumer category and promote it (rooftop solar) with them,” Kuldeep told ThePrint. “Even if high paying consumers are installing rooftop solar, the loss of revenue can be compensated for.”
(Edited by Nida Fatima Siddiqui)