Earlier this month, India’s minister for new and renewable energy, Piyush Goyal, announced the country’s rooftop solar policy was ready to be placed before the union cabinet. This ambitious renewable energy policy lays out yearly targets for reaching 40 GW of rooftop solar capacity.
Goval made these points concerning a rooftop solar policy:
- The Indian rooftop solar market grew 66% in the last 12 months without any specific rooftop solar policy initiatives
- A new rooftop policy is likely to consolidate and detail out already known aspects such as yearly targets, changes in capital subsidy scheme and schemes for low cost financing
- If the new policy does not introduce mandatory rooftop solar installations for buildings, the policy release will likely be a non-event
Even though there is no draft policy document in the public domain, we believe that the new policy will consolidate and bring all disparate fiscal and operational support measures for the market under one comprehensive framework including:
- steep expansion in yearly targets (refer),
- 15% capital subsidy for residential consumers and public buildings (refer) and
- low cost financing using funds from international developmental banks (refer).
Other benefits such as zero import duties on equipment and accelerated depreciation benefits (available until March, 2017) are likely to continue.
November 2014 – October 2015
During this one-year period India added 240 MW of rooftop solar capacity against 145 MW for the same period a year earlier. This represented a growth rate of 66% despite a largely non-functional rooftop specific policy framework.
The report added it is not possible to underpin the 40 GW rooftop target on fiscal support measures such as subsidies, feed-in-tariffs or generation based incentives: “The role of rooftop policy in our view should be to accelerate adoption rates by enabling various technical and operational measures as the market has extremely strong fundamentals with increasing commercial attractiveness vs. grid power.”
Plan for the future: compulsory net metering?
When the cabinet passed a 100 GW target in June 2015, making net-metering compulsory by incorporating measures in the Integrated Power Development Scheme (IPDS) was considered, along with numerous other actions, including:
- incorporating changes in land use regulations and tenancy laws to facilitate aggregation and leasing of land by farmers/ developers for solar projects
- identification of large chunks of land for solar projects
- identification of large government complexes/ buildings for rooftop projects
- clear survey of wastelands and identification of transmission/ road infrastructure using satellite technology for locating solar parks
- development of power transmission network/ Green Energy Corridor
- setting up of exclusive parks for domestic manufacturing of solar PV modules
- provision of roof top solar and 10 percent renewable energy as mandatory reform under the new scheme of Ministry of Urban Development
- amendments in building bye-laws for mandatory provision of roof top solar for new construction or higher FAR
- considering infrastructure status for solar projects; raising tax free solar bonds; providing long tenor loans; making roof top solar a part of housing loan by banks/ NHB and extending IIFCL credit facility to such projects by the Department of Financial Services
- suitable amendments to the Electricity Act for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO)
- incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory
Further action on compulsory net-metering by power distribution companies and mandates on building owners to install rooftop solar can provide a significant fillip to the market. Given that most of the other initiatives have already been announced, “if the rooftop solar policy fails to elaborate on such new measures, its release will largely be a non-event.”
Given the noticeable growth of rooftop solar in India taking place over the past year, the program will be very difficult to regard as a disappointment.
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