Here’s what’s in for the residential sector in the implementation of phase-II of Grid Connected Rooftop Solar Programme

Taking a step further towards realising the dream of having 40 GW of installed rooftop solar capacity in India by 2022, the cabinet approved the phase-II of ‘Grid Connected Rooftop Solar Programme’ on 19 February 2019. A total central financial support of Rs 11,814 crore including capacity building and service charges to the implementing agencies has been allocated for this phase. The implementation of phase-II is expected to reduce CO2 emission of about 45.6 tonnes per year. As an initiative towards curbing rising pollution globally, India, as a part of its ‘Intended Nationally Determined Contributions’ (INDCs), has set a target of producing 40% of the total power produced from non-fossil fuel sources by 2030.

Out of its two components, ‘Component A’ of the programme aims at installing 4 GW of grid-connected rooftop solar power plants with central financial assistance (CFA) by the end of this phase. At the time of roll-out, the nodal agency, the Ministry of New and Renewable Energy (MNRE), had proposed a CFA of Rs 6,600 crore for the implementation of Component A during this phase. As per its estimates, an amount of Rs 858 crore, Rs 1,716 crore, Rs 3,432 crore would be required for the installation of rooftop solar systems in the residential sector during FY 2019-20, 2020-21, 2021-22 respectively, and Rs 858 crore would be required for the same during the period of 1 April 2022 to 31 December 2022. In this phase, discoms and their local offices would be the nodal agencies for the implementation of the rooftop solar (RTS) programme.

MNRE released a memorandum on 20 August 2019 with the operational guidelines for the implementation of phase-II. Here are the guidelines MNRE has prescribed for setting up grid-connected rooftop solar projects in the residential sector.

1. According to MNRE, the adoption of rooftop solar is largely hindered by the fact that most of the states/UTs in the country provide subsidized electricity to residential users. In such a scenario, CFA would be very necessary to encourage users to make the shift. Therefore, CFA of up to 40% would be provided to residential users by the government as per the following norms:
   -Residential users with RTS systems with up to 3 kW capacity would be provided 40% of the benchmark cost of the RTS system as CFA.
   -Users with RTS systems having capacity more than 3 kW but below 10 kW can avail CFA of 20% of the benchmark cost of the RTS system.
   -If required, residential users can install RTS plants with capacity above 10 kW by following State Electricity Regulatory Commission’s (SERC) guidelines but, CFA would only be provided for the first 10 kW. GHS and RWAs can avail CFA of 20% for installing RTS systems to supply power.
2. Norms laid down for group housing societies (GHS) and residential welfare associations (RWA) are as follows:
   -GHS and RWAs can avail CFA of 20% for installing RTS systems to supply power.
   -GHS and RWAs can avail this CFA for up to 10 kW capacity per house and for a cumulative capacity of up to 500 kW. The cumulative capacity would also account RTS systems already installed on individual houses before the installation of an RTS system for collective use.
3. To be eligible to avail CFA under Component A, the RTS system should be installed either on the roof of the residential building or on an open contiguous land within the premises of the building and should also have an active connection from the local discom.
4. In the ensuing years, MNRE shall allocate capacity for installation of RTS systems on the basis of the requirement of the discom and the capacity necessary for fulfilling the state’s renewable purchase obligation (RPO). Discoms will hence be required to submit their yearly proposal online by the month of March through MNRE’s SPIN portal (www.solarrooftop.gov.in). In some cases, the requirement of the discom may be inquired directly from the Ministry of Power. State/UTs providing subsidies and benefits other than CFA would be given preference during allocation.
5. Supply, installation, testing and commissioning of RTS systems will be done by vendors empanelled by discoms or its authorised agencies through the invitation of expression of interest (EOI). Only manufacturers of solar panels and system integrators that fulfil the necessary technical and financial prerequisites shall participate in the bidding process. The installation work of RTS systems shall be carried out in accordance with the quality control directives and standards, if any, that would be prescribed by MNRE from time to time.
6. It has been suggested that bids falling in the price bracket of “L1 (it represents the lowest bid) + X% of L1” would be empanelled, where ‘X’ could be decided by the nodal agency but the value of the same would not exceed 25. However, bids falling in the price bracket of “L1 + [X + 5]% of L1” shall also be considered for selection if bids that qualify the previous criteria are less than 5. All the vendors must conform to match L1.
7. Users can choose an appropriate vendor from the empanelled vendors. The eligible amount of CFA would be deducted from the total cost required for the installation of the RTS system which the users would be liable to pay to the vendor. While the vendor would have to claim the CFA amount from the nodal agency. CFA reimbursements would be disbursed through the discom after commissioning and inspection of the RTS system. Only users opting for domestically manufactured solar panels having domestically manufactured solar cells shall be eligible for CFA. In case, the RTS system installed in the user’s residential building/premise is owned by a third party (RESCO model) then the user must be provided the benefits of CFA in the form of reduced tariff. Projects receiving financial support from the ministry can avail GFR provisions.
8. The nodal agency or MNRE reserves the right to blacklist a vendor on the following grounds: (i) If the system has not been installed as per standards, (ii) If the system is found to be non-functional due to poor quality of installation & (iii) If vendor found to be violating annual maintenance contract (AMC).

The following criteria may also be included with the blacklisting:
-Vendor shall no longer be eligible to bid for projects supported by the government
-If the director(s) of the company at fault moves to another company or starts/joins a new company, that company shall also be blacklisted.

9. Government-owned discoms can avail advance CFA of up to 30% of the total CFA while private discoms are only eligible for the reimbursement of the CFA. Private discoms would be eligible for advance CFA only if they submit a bank guarantee of an equivalent amount.

10. The agency undertaking the project will have to submit the following documents in the SPIN portal of MNRE for the settlement of the project account:
-Utilization certificate (UC)
-Audited statement of expenditure (SoE)
-Project completion certificate
-Online project completion reports

Service charges @ 3% of the eligible CFA can be availed by the implementing agency post completion of the project. MNRE would be responsible for utilizing the funds allocated for capacity building.

11. Individuals will have to express their interest in installing RTS systems in their residential buildings by submitting their application either online or at the office of the local discom, in case the online portal is not available. Users will be assisted by the local discom while getting CFA approved or while getting an RTS system installed through an empanelled vendor.

12. Applications received online would be processed and approved using an IT-enabled process. Whereas discoms which do not have access to the online portal shall be provided the services of multilateral agencies appointed for their state who would help them go online during FY 2019-20. Discoms can aggregate and register consumer demand in their respective area through the SPIN portal.

13. The guidelines to get timely approval and connectivity shall be outlined by the local discoms. RTS systems installed with CFA as well as that installed without CFA would be eligible to avail incentives provided by discoms. Project implementation forms, formats and procedures shall be devised by MNRE by consulting other stakeholders.

14. Grid-connected rooftop solar system users in most of the states/UTs are billed as per regulations of net metering. However, for this programme metering method as specified in the tariff policy or as recommended by the concerned SERC may be followed.

Source: Economic Times