Learning lessons from International experiences of solar rooftop policies
The global solar rooftop market has been growing at a rapid pace, and several countries have been successful in implementing policies that incentivize solar rooftop installations. One of the key factors that determine the success of these policies is the tariff settlement mechanism. In this article, we will discuss some of the international experiences in tariff settlement in solar rooftop projects and how India can adopt from these experiences.
- Feed-in Tariff (FIT): The Feed-in Tariff mechanism is a popular tariff settlement mechanism used in several countries, including Germany, Japan, and Australia. Under this mechanism, the government guarantees a fixed tariff rate for solar power fed into the grid. This mechanism has been successful in incentivizing solar rooftop installations as it provides long-term revenue certainty for investors.
- Net Energy Metering (NEM): Net Energy Metering is a tariff settlement mechanism that allows consumers to offset their energy bills by feeding excess solar energy back into the grid. This mechanism has been successful in countries like the United States and Australia, where it has led to a significant increase in solar rooftop installations. The mechanism provides a financial incentive for consumers to switch to solar power and helps them to reduce their energy bills.
- Auctions: Auctions are a tariff settlement mechanism used in countries like India and Brazil. Under this mechanism, the government invites bids from solar rooftop project developers, and the project is awarded to the developer with the lowest bid. This mechanism has been successful in driving down solar rooftop tariffs, making solar power more affordable for consumers.
India can adopt from these international experiences by implementing a hybrid tariff settlement mechanism that combines the benefits of different mechanisms. For instance, India can adopt the FIT mechanism to provide long-term revenue certainty for investors and the NEM mechanism to incentivize consumers to switch to solar power. India can also explore the use of auctions to drive down solar rooftop tariffs.
In conclusion, the success of solar rooftop policies in India depends on the adoption of an effective tariff settlement mechanism. By adopting from international experiences and implementing a hybrid tariff settlement mechanism, India can incentivize solar rooftop installations and achieve its clean energy goals.