Last three years, the solar PV installation cost has reduced significantly and it is expected to reduce further which has made solar PV affordable to many consumers. In case of large utility scale installations, there is a significant cost involved in land procurement, permitting, conversion, power evacuation, right of way, which cost about ten percent in terms of the soft cost and makes it time consuming as well as extra cost to the solar PV developers.
There are various interventions required from the central and state governments to reduce the red tapism and make the solar PV affordable. for example, currently there are significant challenges to the project developers for power evacuation. The places like Faloudi where about 200 MW is connected to a single GSS, are facing the curtailment on rotation basis because the power evacuation capability at the 200 KV substation is not enough to evacuate all the power generated through the solar plants. This puts the balance sheet of solar project developers in red. There is a need to develop smart grid infrastructure so that there is a two way communication between the grid and the PV inverters. Developing a smart grid infrastructure will pave the way for better harvesting the solar electricity in to the grid.
Rooftop PV systems have also become much more attractive due to the solar investors on lease basis or on capex mode. This also reduces the distribution losses and reduce additional burden of laying the T&D infrastructure. However, the utilities do not have sufficient metering infrastructure to integrate the roof top systems in the main grid. Infact various states have not yet introduced the netmetering provisions to tap the rooftop potential.
There are various policy bottelnecks which are still resisting the large scale deployment of solar. For example the country has about 220 MW of solar PV installations through the REC route and investors are not able to sell their certificates. The lack of enforcement of the RPOs by the state regulators has made it difficult to sustain these projects.