India’s goal of having 100 GW of solar power by 2022 has already generated a lot of interest, and scepticism. But it’s even more far-reaching part pertains to the fact that 40 GW out of this is going to be based on distributed energy generation, namely solar rooftop systems.These solar rooftop systems could be set up at residences, at industries, at commercial buildings, or on the airport terminals. The capacities range from a few kilowatts to megawatts. There have been ongoing discussions and debates on their feasibility. The country had around 525 MW of solar rooftop systems by October last.The one thing that has been clearly established is the crucial role of electricity regulators as well as the distribution utilities (discoms). Be it the connectivity to the grid or the net-metering arrangements or the tariff paid for surplus solar electricity fed into the grid by the consumers, Discoms have become central in solar rooftops’ rollout.Interestingly, with the advent of roof-mounted solar systems, retail electricity consumers are metamorphosing in to a dual role: an electricity consumer as well as a generator.
Discoms under threat
There are enough indications worldwide that electricity sector is fast undergoing fundamental, structural changes; changes that might impact the very business model of the utilities. And one always resists change, more so if it happens to be a fundamental one.The risk perception of discoms stems from the belief that if a sizeable consumer base – especially in higher tariff categories like commercial and industrial — shifts to solar rooftop systems, it would result in revenue loss.This is because while on one hand the demand for grid electricity reduces, on the other discoms would still have to invest into, and maintain, the electricity supply infrastructure. In India, there is cross-subsidy to contend with.In many States commercial and industrial consumers provide subsidise electricity consumers in agriculture and residential sectors. So in a sense wide-scale adoption of solar rooftop systems by commercial and industrial consumers could impact the financials of discoms.