Solar energy is revolutionizing the world. It’s revolutionizing the energy sector and most importantly it’s changing our economics. The sector has witnessed impressive growth in recent years and the changing energy dynamics with more focus on renewable has triggered new ambitions to scale up country’s generation targets. If things are on the set path, that day is not far when every house will turn into a power plant. Yes, this is not a part of some science fiction but a reality which has already started happening. The households will no longer be just the consumers of power but they will soon play an important role in power generation. Rooftop solar is going to democratize the energy production and distribution scenario in India. Every building, whether home, industry, institution or commercial establishment can generate some solar power by installing solar panels on their rooftop.
The Ministry of New and Renewable Energy has ambitious plans of adding 100 GW of solar power by 2022 of which 40 GW has to come from rooftop solar. However to make this dream of energy sector into a reality, many policy reforms are urgently needed. To start with, India would need to implement the net-metering system, remove uncertainties, bring uniform tariffs across the country , and giving incentives to rooftop solar to compete with the grid electricity.
Viability of Solar Rooftop
While the commercial and industrial rooftop segments have already seen viability in several states, results from the residential rooftop segment are still to be assessed. The solar industry believes easy access to finance and not subsidies will be key for rooftop installations to take off. Experience say, despite subsidies solar rooftop installations have performed way below targets. Of the 358 MW rooftop solar projects sanctioned by Ministry of New and Renewable Energy (MNRE), only 42 MW of rooftops have been installed so far. Looking at the scenario center has planned to cut the subsidy on rooftop solar plants to 15 per cent from 30 per cent. The lesson is that subsidy system doesn’t work when finances itself are are low.
Lack of financing solutions is a major hurdle in the solar rooftop market which needs urgent attention. The solar rooftop revolution has to be led by the common man but many consumers may not have the liquidity to pay for the entire solar system upfront. This capital should be financed by commercial banks and other financial institutions in the same way they finance a car loan or any other personal loan.
The challenge in the commercial segment lies in getting access to the roof area for a longer period. The rooftop space, which was till now was not so useful commercially has become a valuable real asset, with hotels, hospital and other commercial buildings dedicating the space for solar projects.
Rooftop installation are profitable for commercial buildings as these can utilise the solar power during peak-load daytime periods, thus saving the money required to set up battery banks. Unused power can be stored in a battery bank for use at night when energy consumption is the least.
The power, either injected into the grid or consumed by owners of solar power systems, will be adjusted against the Renewable Purchase Obligation of the distribution companies. This is a critical part of the proposed guidelines as it would encourage the distribution companies to set up the infrastructure to enable implementation of such systems.
For organizations planning to shift from traditional power to solar energy , a rooftop solar photovoltaic (PV) power plant can not only be a money saver but also a new source of income with excess power supplied to the grid. While the Ministry of New and Renewable Energy (MNRE) is still in the process of laying down specifications for incentives, experts feel that with the right policies and execution, solar rooftop installations can be a hot trend in green technology. It is a profitable business concept, and hence a viable investment option.
Installation and Requirements
Some factors should be considered before installing a solar power plant on the rooftop including electrical load, current rate, roof size, load capacity and geographic location of the building. Rooftop PV installation can either be done for standalone use or to feed into the grid.
Rooftop solar panels are best installed on a large and flat roof which receives direct sunlight without shadow from the surrounding structures. If there is shadow on a part of the terrace during the day, PV solar panels are unable to harvest the sun’s energy for that period of time.
To inject the generated power into the grid, one needs to enter into a power purchase agreement (PPA) with the local distribution utility in the area . Under this agreement, a tariff is determined by the appropriate State Electricity Regulatory Commission (SERC). However, the issues related to grid integration, metering, measurement and energy accounting for projects are under consideration with the government.
The safety aspect should also be considered before installing the solar rooftop. There is always a risk involved, as when the grid fails the solar power system automatically stops injecting power into the grid. This is called islanding, where the inverter isolates itself. This is a standard feature built into solar power inverters, making these safe for residential and commercial applications. A standalone feature in the inverter would enable captive consumption of the solar power generated in the event of any grid outage.
Weight Load – The system should be carefully designed to with-stand heavy winds. Such systems are designed to connect the solar power system to a roof using weights, rather than fasteners that must be anchored to the roof.
Roof condition- The roof should be in a good state prior to solar installation. If it needs significant repair or replacement, it should be done before installing the system.
Investments involved – Solar panels accounts for the almost 70 per cent of the total project cost. The investment primarily depends upon the size of the power plant, which varies from a small kilowatt to multi-megawatt plant. At present, good-quality off-grid rooftop solar power plants can be installed at a cost of Rs 250,000 per kW. Typically, a solar power plant has a life of 25 years with proper maintenance.
Ownership- The rooftop solar projects can have two kinds of ownership arrangements: Self-owned arrangement wherein rooftop owner also owns the PV system and third party ownership in which a developer owns the PV system and also enters into a lease agreement with the rooftop owner. Third party financing mechanisms include both power purchase agreements (PPA) and leasing arrangements. With a PPA, the host agrees to purchase all the energy produced onsite. Any excess generation is typically subject to a net metering arrangement between the host customer and a utility. With a leasing arrangement, the host agrees to pay a fixed monthly fee that is not directly based on the amount of on-site generation.
But why is rooftop solar not picking up fast in India?
Even though it has so much of prospects ,there are some factors making rooftop solar slow to take off. There are several challenges to it, for example adapting the net metering system, the tariff structure and grid-reliability.
Net-metering allows customers who generate their own electricity from solar to feed unused electricity back into the grid and be compensated for that. If the energy supplied by the consumer to the grid is at a higher tariff rate than the one at which electricity is bought from the grid , then it is called a “feed-in-tariff”. However, if the selling and buying are at the same tariff-rate (usually the buying rate), then it is called net-metering. And herein lies a problem. Unfortunately, feed-in-tariff is just not possible in India because of the simple reason that the DISCOMs are in financial deficit – they have no money to pay the users. Lack of viable financial incentives is, thus, restricting end customer’s adoption of net-metering. For the net-metering to make financial sense, the government will have to introduce innovative financial incentives to make choosing solar through net-metering easier for consumers. Other than that, some other factors also becoming impediment to the growth of solar rooftop market
- High upfront cost
- Lack of financing schemes by banks
- Lack of awareness in people
- Unavailability of standardized Rooftop SPV systems
Government’s role in encouraging Rooftop Solar
The Ministry of New and Renewable Energy needs to remove all the remaining roadblocks to encourage rooftop solar power to feed their solar power into the grid.In the countries where rooftop has been a success, the rate for the solar power fed into the grid is higher which makes it a rewarding investment.
Another challenge is that some people can, instead of injecting solar power from their panels, may connect the conventional electricity to the grid. In such a scenario it becomes difficult for the energy meter to detect the mode of power. However, this challenge is being overcome by introducing innovative DC energy meters that detect the kind of power being transmitted and accept only the power generated by solar PV panels. The biggest boost to rooftop solar uptake will be setting up of uniform FiTs (feed in tariff) across all states.
Enabling Net Metering System
What that means is you put up a solar photovoltaic (PV) panel on your roof and when it produces more electricity than you need you can sell it to your utility for a fixed price. The consumer becomes a producer and one can actually make money instead of paying the electricity bills. This mechanism is called ‘net-metering’. This also does away with the need for expensive and not so clean battery storage systems.
In addition to helping consumers reduce their energy bills, it is also supposed to help stabilise the national, regional and state grids, provide financial relief to the distribution companies (DISCOMs) through consumer default risk mitigation and reduction of AT&C losses, and help cut down the per-capita energy footprint. Net-metering is crucial for India if it wants to achieve energy security by 2022.
Advantages of Rooftop Solar
The biggest advantage of the rooftop solar is that it is the customer driven solar project. Small-scale decentralized projects developed by electricity consumers on their own premises. Photovoltaic roof-top installations at the tail-end of the grid can enhance grid-stability and reduce losses.
Savings in land requirement and costs- The land costs in cities had gone up, so there is a need to invest in rooftop solar devices. Rooftop solar projects have the potential to create economic value for non utilized rooftops and are not faced with the issues of land availability.
Dealing with erratic and ineffective power systems- A rooftop system saves you from uncertain power supply.With power generation on your roof itself you can be more certain about your energy security.
Ensuring Power to All
About 75 million of India’s 226 million households (400 million people) have no access to power. In rural areas, the electrification rate hovers at 47.5 per cent — either the grid does not reach these places, or even if it reaches, it fails to provide end-point connectivity. In such a scenario, decentralised off-the-grid renewable power projects could be a way out.
States Embracing Rooftop Solar
Indian states are making noticeable progress in implementing rooftop solar net metering with an attempt to expand distributed solar power infrastructure.Gujarat is leading the way having initiated the installation of rooftops much before it became popular in other states. Gandhinagar’s rent-a-roof project has proved to be extremely popular with other states getting inspiration to emulate the same. The residents will be able to use their terraces for generating solar power, and revenue for themselves in the process. If you have a rooftop of 1,000 sq ft, you could earn Rs36,000 a year, and that too for the next 25 years, by allowing a developer to use your rooftop for setting up solar power panels. The rooftop owners would get a part of power generation revenue for 25 years. This is the most lucrative rooftop monetization policy in the whole country.
Delhi is on the lines of Gujarat to bring rent your roof concept. The Delhi Electricity Regulatory Commission recently issued draft guidelines for solar net metering after years of attempts to implement an effective and popular policy. The regulations, if approved, would allow homeowners and project developers to export electricity from rooftop solar power projects.
Punjab is also aggressively looking to leapfrog its solar generation capacity. The state has cleared a solar net metering policy to facilitate installation of 100 MW of rooftop solar power capacity. The Chandigarh Administration is keen to proliferate and scale up the solar rooftop development in the city and become a model solar city.
Rooftop solar may prove to be a boon to several cities and towns in the country which are experiencing a substantial growth in their peak electricity demand. Municipal Corporations and the electricity utilities are finding it difficult to cope with this rapid rise in demand and as a result most of the cities and towns are facing severe electricity shortages. Various industries and commercial establishments e.g., Malls, Hotels, Hospitals, Nursing homes etc housing complexes developed by the builders and developers in cities and towns use diesel generators for back-up power even during the day time.
The time has come for a solar revolution in the energy sector as there is wide recognition about the impending energy crisis in India. The costs of solar products have come down over the years and rooftop solar devices have begun to have a significant impact on our renewable energy solutions.
Rooftop SPV can be a good solution for reducing demand supply gap and distribution losses. State policies and guidelines for Rooftop SPV are still evolving.Government should bring more clarity on rooftop solar policy so that people can bring in the new revolution from their homes. India needs to invest in innovations while creating the right environment for policy regulatory frameworks.