India is making strides towards achieving its renewable energy target through various schemes and programmes. The emphasis on renewable energy comes as the country aims to reduce its dependence on fossil fuels and move towards sustainable and cleaner sources of power. Of these, solar energy has been a major focus, particularly the installation of rooftop solar systems.
The Current State of Rooftop Solar Installations
Recent reports from Mercom Research India reveal a downward trend in rooftop solar capacity installations in India. As per their findings, these installations fell 29% to 320 megawatts (MW) in the period spanning July-September 2022. Cumulatively, by the end of Q3 2022, rooftop solar (RTS) installations had reached 8.3 GW. Leading the charge is the state of Gujarat, which boasts the highest rooftop solar installations, followed by Maharashtra and Rajasthan. These top 10 states account for about 73% of total rooftop solar installations.
Despite this, installations during January-September stood at 1,165 MW, presenting an 11% drop compared with 1,310 MW in the corresponding nine-month period of 2021. The leading cause has been an increase in costs due to supply issues.
Explanation of Rooftop Solar Systems
Rooftop solar systems are photovoltaic systems where solar panels generating electricity are mounted on the rooftops of buildings, be it residential or commercial. These installations are smaller than ground-mounted photovoltaic power stations, featuring a capacity of about 5 to 20 kW for residential buildings and reaching 100 kW or more for commercial establishments.
Challenges in Expanding Rooftop Solar Installations
The expansion of the RTS segment has faced several stumbling blocks. Firstly, ever-changing policies have posed a significant hurdle. While solar energy has been embraced by numerous companies, frequent policy changes have disrupted progress positively impacting the sector. Another consequential factor is the recent increase in the GST of many components of the solar system from 5% to 12%, which will raise RTS’s capital cost by 4-5%.
The RTS segment’s growth also hinges on the regulatory framework in place, with its slow growth attributed primarily to the lack of policy support for the RTS segment. Furthermore, there are inconsistent rules on net and gross metering, hampering the sector’s growth. Lastly, obtaining financing for RTS at subsidised rates is challenging, forcing potential adopters to rely on private players who offer loans at higher interest rates.
Initiatives to Advance Solar Energy
Several schemes aimed at promoting solar energy usage are currently underway. One such is the Rooftop Solar Scheme that seeks to generate solar power by setting up solar panels on house roofs, targeting a cumulative capacity of 40,000 MW from rooftop solar projects by 2022.
The Kisan Urja Suraksha evam Utthaan Mahabhiyan covers grid-connected renewable energy power plants and solar water pumps. The International Solar Alliance, an initiative launched by the Prime Minister of India and the President of France, is another endeavour that includes 121 countries rich in solar resources.
One Sun, One World, One Grid is a global effort under the World Bank’s technical assistance program to develop a global grid for transmitting clean energy anywhere, anytime. Lastly, the National Solar Mission forms part of the National Action Plan on Climate Change.
Recommendations for Progress
In order to hasten the adoption of RTS, easy financing, unrestricted net metering, and a simplified regulatory process are needed. Mandating Public Financial Institutions and other key lenders to lend to the RTS segment could be one way of solving the financing issue, while adapting existing bank lines of credit could make the sector more attractive to potential developers.
UPSC Civil Services Examination Questions
Past years’ question papers of UPSC Civil Services Examination included questions about solar power production in India and net metering, highlighting their relevance in the context of promoting production and use of solar energy.
