Government sanctions Rs 118 bn for India’s rooftop solar mission

The government has approved phase-II of rooftop solar programme with a funding outlay of Rs 118.14 billion for achieving the 40 GW rooftop solar capacity target by FY2022.

The approval for the phase-II of the roof-top solar programme with focus on enhancing the adoption by the residential sector is a positive for the sector, given the slow growth in solar rooftop capacity witnessed so far. The installed roof top solar capacity stands at 1.4 GW as on December 31, 2018 against the target of 40 GW by FY2022.

Even though the discoms remain the nodal agencies for this scheme with performance linked incentive structure in place as per the scheme, discoms’s thrust towards the adoption of roof-top systems remains to be seen given their resistance for the same with the significantly improved solar tariff competitiveness especially for their key customer segments (i.e. commercial & institutional category). Further, the net metering regulations continue to vary widely and remain inconsistent across the states,” said Sabyasachi Majumdar, Group Head - Corporate ratings, ICRA.

Under the roof-top solar scheme, the central government has proposed to provide central financial assistance equivalent to 40 per cent of the cost of rooftop solar systems for capacity of up to 3 KW per house. The subsidy component will be 20% for systems beyond 3 KW and up to 10 KW per house. Also, the group housing societies and residential welfare associations will be provided a subsidy of 20 per cent of the capital cost of the rooftop solar unit for supply of power to common facilities, with an overall cap of 500 KW. The subsidy will be on benchmark cost or tender cost, which is lower.