Increasing competition in the utility-scale market and the Government’s thrust towards the promotion of rooftop solar power market is driving developers to implement new and innovative concepts to reduce costs and increase market share.
Solar power project developers in India are now looking to expand the rent-a-roof concept for developing solar power systems and sell electricity to large industrial and commercial consumers. According to media reports, a number of developers are scouting for potential customers who are looking to cheaper and consistent power supply.
Under the rent-a-roof concept, the project developers set up solar power systems atop roofs of industrial or commercial electricity consumers. In return, the developer signs a long-term power purchase agreement with the host. This long-term power purchase agreement provides the host with low-cost and consistent power supply over long periods, as much as 25 years.
The rent-a-roof concept is a win-win situation for the developers as well as the consumer hosts. Land cost represents the single largest expense in the development of a solar power project. Additionally, land acquisition remains a politically contentious issue in India.
A long-term power purchase agreement shields the consumer from escalating electricity tariffs, which are usually increased every year. The rooftop solar power system also promises consistent power supply, whenever the sun it out!
An increasing number of industrial and commercial consumers are looking to set up in-house solar power systems as the government has announced several incentives for the rooftop solar power market. The central government has asked all state governments to exempt renewable energy projects from a number of taxes and duties, including transmission and wheeling charges.
Gujarat has seen successful implementation of ‘rent-a-roof’ solar power program while other states, like Delhi, are looking to replicate this success.
India plans to set up 40 GW of rooftop solar power capacity by March 2022.
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