While solar market in India is growing rapidly, and cost continuity decline solar is reaching to grid parity especially to commercial roof top consumers. Rooftop solar PV still remain untapped and has significant potential as grid parity in this consumer category. The key to growth for roof top solar is Net metering which allows roof top owners electrical meter to be bi directional and grid can be used as a storage media for the roof top solar projects. Many utilities have been discouraging net metering policies, in fact recently Delhi introduced and was subsequently the discoms (distribution companies) have the resources to monitor and verify the FiT administration. In the city of Pune, almost 11% of the meters are faulty and this leads to lack of confidence in the data from these meters. It cites this challenge as one of the reasons why the Delhi Government scrapped its rooftop program me. Utilities in most of the states are experiencing a shift from direct sale to the open access. Open access allows consumers to optimize their electricity bills and source cheaper electricity through bilateral PPA from independent elect city generators. Last month open access consumer saved 450Cr due to cheaper electricity sourcing due to open access. As the spot electricity prices are fallen by 14% and many solar projects are available to do a bilateral PPA with the short term sale contract in the range of 4-rs/unit and long term supply contracts 3-4 Rs/kWh. It makes cheaper to source electricity through open access to the commercial consumers rather than buying electricity from Discoms at a tariff from 7-9Rs/kwh.
In India, the application of solar PV has a particular significance, given the condition of its transmission and distribution infrastructure – high losses, poor power quality and frequent load shedding. Most buildings, public, private and commercial (for example, malls, hotels, hospitals and nursing homes), have diesel generators for back-up in case of load shedding by the utility. Given environmental considerations, the use of diesel should be minimised. There is abundant opportunity to use rooftop or building-mounted solar PV systems to generate electricity and thereby reduce the consumption of diesel. Due to the intermittent supply of solar power and grid outages, diesel–solar PV hybrid models could be potential solutions. Generous subsidies have been offered by the Government (both Central and State). Despite this, widespread installation of solar PV systems to generate electricity on urban rooftops does not seem like a reality that will take the shape in the near future.
Some of the key issues identified in this report are as follows:
Net metering is being adopted in different states which will boost the Indian rooftop solar market. While we are close to grid parity in the commercial and industrial segment the supportive policies shall provide tremendous business opportunities to tap India potential of 25000 MW rooftop solar PV market.
PV systems have limitations that they produce power intermittently because they work only when the sun is shining. The development of off-grid solar PV market is dependent on the battery storage technology. This market is heavily dependent on the central and state government subsidies. It is expected that the energy access in rural areas will be dominated through the off grid solar PV market.
There is a huge market for the investment in rooftop solar PV projects. rent your roof policies are emerging, and some of the developers and private equity players are heading to explore the third party PPAs with the large captive consumers.
Finally there are various factors which affects the economics of the rooftop solar PV system which include the Interest rate, Capital cost, and PLF. These three factors can make or break the profitability of any rooftop solar project. Hence there is a need for policy makers to provide cheaper financing options for solar project to tap this potential.
We hope this study will provide a deeper understanding of the various issues related to the solar rooftop market.
For more details please download the report from the following link-