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Published on February 10th, 2016 | by Saurabh Mahapatra


Rent-A-Roof Solar Power Concept Expanding In India

February 10th, 2016 by  

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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About the Author

A young solar enthusiast from India keeping an eye on all regulatory, policy and market updates from one of the fastest emerging solar power markets in the world.

  • JamesWimberley

    Businesses in India do not IIRC assume that the grid will provide a reliable 24/7 supply, and are used to providing their own backup.

    I have read before about the land acquisition issue in India, and am puzzled. Is there some legal obstacle to signing 25-year land rental contracts? With appropriate design, solar farms are compatible with some farming uses, like raising poultry, or growing shade-tolerant vegetables like squashes. With wind, the farming carries on as before.

    • Aditya

      Some states are power surplus and have access to 24/7 electricity like Gujarat, Chhatisgarh etc. A lot of states however do not and rely on the power surplus states to sell them power.
      The situation was a lot worse a decade ago though. As per some estimates, there is 70 GW of generators in operation today as back up power. Let that sink in… 70 GW!

      Anyway, India is a large country with an even larger number of people. So land is still at a premium. Farmers are typically not highly educated and in large parts of the country have this attachment to their ancestral land. In such cases, farmers can be a real pain to negotiate with. Land laws in particular favour them and they get a lot of political mileage and bargaining power if the government or in this case power sector attempts to acquire land at twice or thrice the value of the land.
      Renting land from farmers is not an option. Farmers can cancel contracts whenever they want and create a fuss (political mileage etc) to ensure the matter is stuck in courts for months or years even if there is a valid contract. No developer wants the risk of this headache and potentially huge losses. Just buy the land and get it over with.

  • Oscar Martín

    I suppose that from “rent” implies pay in money form.

    Perhaps it is even better to share the “risk” of not been payed by the utilities. Instead, they could share a different model. The people that put the roof, gains free access to a part of the electricity, and the other part only risks to not be payed the other part by the utilities.
    But even if the utility don’t pay, the owner of the roof can pay if he comsume MORE than its part. The result should be a important discount, because he could discount his “free” part of the agreement.
    And if they could sell the electricity, even the owner of the roof
    could sell its electricity part too if he wants money instead

    Because paying by root use the PV supplier assume all the risk. The risk of pay the panels, pay for rent the space, and does’t receive NOTHING. It my proposition, the risks are lowered.

  • Sreehari Variar

    Great news. Countries like India have great opportunity at hand to skip building additional thermal plants in favor of the renewables. So much less stranded assets to deal with in future.

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