Shining a Light on Quality and Safety Issues in Rooftop Solar Projects

: “The success and sustainability of rooftop solar investments, as well as the achievement of national renewable energy targets, depend to a large extent on the performance of these systems which, in turn, depends upon the quality of the systems, their components, the workmanship during installation, operations and maintenance during the life of the system, and the safety of the financed energy systems.”

Rooftop solar projects are becoming increasingly popular in India, as they offer a sustainable and cost-effective source of energy. However, the deployment of rooftop solar projects faces several quality and safety challenges that must be addressed to ensure the long-term viability and success of the sector.

One major challenge is the cost of generation. Rooftop solar deployment typically involves small systems with higher deployment costs and higher transaction costs for financing and installation. In India, rooftop solar is economically viable mostly for high-tariff-paying consumer categories such as commercial and industrial (C&I). Residential consumers usually pay much lower tariffs, making rooftop solar less attractive to them. This, coupled with limited understanding of the technology and quality of the system, acts as a deterrent to residential consumers who own a significant portion of rooftop space.

Another challenge is institutional financing. Most banks either do not want to fund such small transactions or lack familiarity with the technology to feel comfortable financing rooftop solar systems. These systems are often owned by third-party developers or financed through personal savings, making it challenging to deploy rooftop solar at scale.

Utility caution and cumbersome deployment processes are also barriers to the adoption of rooftop solar. To date, most rooftop systems in India are deployed by C&I consumers who also contribute to a high percentage of the margins and revenues of the distribution utilities. Utilities perceive this as a potential revenue loss and are not incentivized to develop a streamlined process. Furthermore, utilities would benefit from additional PV technology capacity building and training, especially regarding the safety requirements on the DC side.

The complexity and lack of standards in rooftop solar installations are also barriers to high-quality deployment. The installation process is complex, with a large number of system components and a wide range in the quality of available options. There are also limitations in defining a single national standard for these systems, making it difficult for consumers to effectively evaluate the quality of these installations to make informed decisions.

Quality and safety considerations are particularly important to facilitate lender confidence in this investment-intensive sector. A significant portion of the overall life cycle costs come as an upfront investment during the deployment of the systems. To recover the investment, it is critical that the systems perform as expected. The success and sustainability of these investments, as well as the achievement of national renewable energy targets, depend to a large extent on the performance of these systems which, in turn, depends upon the quality of the systems, their components, the workmanship during installation, operations and maintenance during the life of the system, and the safety of the financed energy systems.

Over the past few years, the drastic reduction in the cost of solar coupled with a supply glut in the market has led to a supplier competition. This has forced EPC contractors, installers, and suppliers to cut prices to win orders, often sacrificing basic quality and safety requirements. EPC contractors and installers may compromise on the quality of the components, the systems, and the workmanship to keep costs low. This has created a certain amount of scepticism in the market on the long-term performance and sustainability of the systems.

To ensure the long-term health of the sector, grow the market, and achieve India’s ambitious policy targets, there is a need for a system that facilitates quality in these solar rooftop systems, especially for residential consumers who will make up the bulk of the market in the future and who are most at risk. This includes developing clear and comprehensive standards, providing training to installers and utilities on safety and quality, and improving access to financing for residential consumers. By addressing these challenges, India can unlock the full potential of rooftop solar and achieve its renewable energy goals.