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Interaction | May 2018

A few policy changes can accelerate rooftop solar

<span style="font-weight: bold;">Andrew Hines, Co-Founder, CleanMax Solar<br /> <br /> For FY2017v18, the government has truncated the target for rooftop solar to 1,000 MW from the previous 5,000 MW. What accounts for the present slowdown in the segment?</span><br /> While the central and state governments have done a &quot;good&quot; job with regard to rooftop solar policies, there are some specific changes to the net metering rules and plant size specifications that can accelerate adoption. Since last year, there have been many uncertainties that have disrupted growth momentum like PV module price fluctuation, bottlenecks in the implementation of net metering and the recent one in policy on the implementation of unviable duties. These have created an atmosphere of slowdown in this sector.<br /> <br /> <span style="font-weight: bold;">In FY2016v17, 715 MW of rooftop capacity was added across the country. However, according to the MNRE data, cumulatively only 271 MW of projects have been installed till December 2017. Does this call for a review of some aspects of the policy?</span><br /> There is no need for a major overhaul, but a few policy changes can accelerate rooftop solar growth. One of them is artificial capping on net metering, where the size restriction on solar capacity needs an immediate review. The government should allow you to cover the full roof. For instance, an automobile manufacturing company may have space worth 20 MW of solar power, but the policy allows only 1 MW of installed capacity. If you lift that restriction, you can see capacity addition among those people who have already adopted rooftop solar and are enjoying the cost benefit.<br /> <br /> Another one is consistency in policy. Opex model has been driving the growth in rooftop solar space. Some state policies do not allow net metering for solar plants under Opex model, like the state of Gujarat. In Gujarat, if a solar plant is owned by a developer like CleanMax, then the end-users cannot avail its benefit. This would then need capital investment from the end-users, instead of enabling them avail the benefits of solar power without any upfront investment. The plant performance risk is managed by developers like CleanMax.<br /> <br /> Since electricity is a state subject, there are many regulatory challenges which should be solved when the solar policy gets revised. It is always good to have long-term policies, consistence and standards across the sector.<br /> <br /> <span style="font-weight: bold;">Among other things, it is also said that the current policy has been designed with only the industrial rooftop in mind, without much incentives for residential rooftop. What needs to be done to address it?</span><br /> While the industrial and commercial segments have been the growth drivers in the solar industry, since most states have a grid price that is higher than rooftop solar, it has helped in driving adoption. The residential or MNSE segment has a huge potential for rooftop segment, but developers are not venturing into this space due to lack of price parity, economies of scale, credit risks involved and the fragmented nature of the market. The government is considering policies like (Rent a Roof,÷ but the industry needs to see a positive push from the centre and state authorities to introduce policies with a sense of urgency, to consolidate the market, manage risks and introduce subsidies for the segment to take off.<br /> <br /> <span style="font-weight: bold;">How can the policy on net metering be made more cohesive to propagate adoption of rooftop solar and also allow users to sell surplus electricity?</span><br /> Net metering is helpful because the excess power is harnessed and used elsewhere, and the source consumer gets equivalent benefit on their tariff or power consumption. Net metering policies are required to enable widespread adoption of rooftop solar power, so that users can maximise benefits. With a robust net metering policy in place, we can effectively use the rooftop solar power generated and also encourage faster adoption of renewable energy sources among corporates and institutions, as they will see value in sustainability as well as reduction in their operational cost. <br /> <br />
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