Rooftops may Power Up In­dia in Big Way

So­lar En­ergy Corp’s latest ten­der will al­most dou­ble In­dia’s cur­rent in­stalled rooftop ca­pac­ity of 525 MW

The Economic Times - - Economy: Macro, Micro & More - Kaavya.Chan­drasekaran @times­group.com

New Delhi: In­dia is tak­ing a gi­ant leap in green en­ergy generation with a mega ten­der of 500 MW of rooftop so­lar en­ergy that will dou­ble the coun­try’s ca­pac­ity in the seg­ment, and can even­tu­ally pose a se­ri­ous chal­lenge to util­i­ties and con­ven­tional power plants.

State-run So­lar En­ergy Cor­po­ra­tion of In­dia (SECI) has in­vited bids for 500 MW of projects across var­i­ous states and will open the bids on June 3.

Rooftop so­lar plants, which save transmission costs by sup­ply­ing en­ergy where it is gen­er­ated, are al­ready eco­nom­i­cally vi­able for top-pay­ing cus­tomers be­cause such sup­ply is cheaper than what com­mer­cial es­tab­lish­ments pay distri­bu­tion com­pa­nies for elec­tric­ity from the grid. In fact, many en­trepreneurs have set up so­lar rooftop plants free for com­mer­cial es­tab­lish­ments and earned money by sell­ing the out­put prof­itably but at a cheaper rate than the grid sup­ply.

In western coun­tries, many do­mes­tic con­sumers have re­duced util­ity bills with so­lar rooftop units, which puts pres­sure on distri­bu­tion com­pa­nies to charge higher rates to the re­main­ing cus­tomers to re­cover their costs. This in turn gives con­sumers a big­ger in­cen­tive to aban­don the grid — a process called ‘util­ity death spi­ral’.

Rooftop projects are a key part of the govern­ment’s mas­sive ex­pan­sion plan in re­new­able en­ergy and its com­mit­ments in global cli­mate talks. In­dia has a tar­get of 100,000 MW of so­lar ca­pac­ity by 2022, in­clud­ing 40,000 MW from rooftop units. It has a po­ten­tial to in­stall 124,000 MW of rooftop projects, which amounts to nearly half of In­dia’s to­tal elec­tric­ity generation ca­pac­ity.

SECI’s latest ten­der will al­most dou­ble the coun­try’s cur­rent in­stalled rooftop ca­pac­ity of 525 MW, built over many years.

The ten­der dwarfs SECI’s pre­vi­ous ten­ders, seven of which were is­sued since 2012 for a to­tal of about 200 MW. Out of which 120 MW have been al­lo­cated and 42 MW com­mis­sioned.

New projects can be built by re­new­able en­ergy ser­vice pro­vid­ing com­pa­nies through what is called the RESCO model, in which the con­sumer does not have to pay for the in­stal­la­tion, but is charged a tar­iff for the out­put.

Bids have also been in­vited un­der the capex model, in which govern­ment sub­si­dies are pro­vided for the in­stal­la­tion. Win­ning bids will be el­i­gi­ble for a sub­sidy of 30% on the cap­i­tal cost, pro­vided the roofs of res­i­den­tial build­ings, in­sti­tu­tions such as schools and hospi­tals, or those re­lated to the so­cial sec­tor are used.

There will be no sub­sidy for so­lar plants set up on the roofs of com­mer­cial es­tab­lish­ments or govern­ment build­ings.

Late last year, the union cabinet al­lo­cated .₹ 5,000 crore from the Clean En­ergy Fund over the next five years to pro­vide this sub­sidy. The size of projects can vary be­tween 25 kW and 500 kW. It will be the de­vel­oper’s task to find the rooftops to in­stall the plants.

“Suc­cess will vary from state to state, de­pend­ing upon the so­lar ra­di­a­tion there and the kind of so­lar pol­icy the state govern­ment has in place,” said Ashvini Ku­mar, manag­ing di­rec­tor at SECI.

Net me­ter­ing poli­cies, for in­stance, have been for­mu­lated by 25 of the 29 states, but in some these are not yet op­er­a­tionalised. The tar­iff for the power gen­er­ated will de­pend upon the lev­elised tar­iff de­ter­mined by each state’s elec­tric­ity reg­u­la­tory com­mis­sion.

Jas­meet Khu­rana, as­so­ciate di­rec­tor at so­lar con­sul­tancy Bridge to In­dia, said the ten­der reaf­firms the govern­ment’s re­solve to pro­mote rooftop so­lar en­ergy. “But I don’t think the mar­ket de­mand in rooftop so­lar is large enough to ab­sorb the en­tire ca­pac­ity in a time-bound man­ner. The ten­der may not be fully sub­scribed or even if it is, some of the win­ners may not be able to com­plete their projects in the time spec­i­fied,” he said.

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