Rooftop Solar Feed-in Scheme Coming Soon to New Delhi
May 29th, 2011 by Mridul Chadha
The Indian government is about to launch roof top solar policy in capital state Delhi. The policy aims to encourage people to switch to renewable energy sources, Delhi’s chief minister said in an interview.
“The house owner will easily be able to earn about 19 per cent returns on his investment. In nine years, the returns will go further up. There will also be an income tax rebate on this investment,” said a senior official.
According to the policy, house owners would have the option of either paying 30% of the total cost of installation or can lease their roof to a solar power developer, who would then set up a unit. The remaining 70% would be financed by banks.
The home owners would have to sign power purchase agreements with the state distribution companies for getting the approval for feeding power into the grid. Home owners will get to earn Rs.17 ($0.38) per kWh of power produced through the solar panels, which will be directly fed into a grid. They can sell the power for 25 years.
The government plans to generate 20 MW through solar energy over the next three years. The government is working out modalities of the scheme’s benefits. The discoms may even deduct the amount the house owner earns through the solar unit from the electricity bill.
The discoms are also expected to benefit from the scheme since the power purchased from the these units would be costly, discoms would get subsidy of Rs. 13 per unit form the government.
According to the recent estimate, cost of setting up a 5-KW unit is around Rs 7.5 lakh ($16,600) and requires 2,000-2500 sq feet of roof space. After signing a Power Purchase Agreement with the discoms, the home owner would have to pay Rs 3 lakh ($6640), on which they would get returns of close to Rs 60,000 ($1330) per annum.
The scheme would also help the Delhi government to fulfill its solar energy purchase obligation which requires states across India to source at 0.25% of their power consumption from solar power plants, starting 2013. The state governments are also required to increase solar power’s contribution to 3% by 2022. States like Delhi, where land availability is major issues, rooftops can contribute significantly in terms of solar energy capacity addition.
The policy is a significant effort towards bringing affordable, even profitable, clean energy technologies to the community. Such policies would help tap millions of square feet of roof space area across the country for generating solar power.
Image: Waynenf at Flickr (Creative Commons)
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About the Author
Mridul Chadha currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.
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