Scaling Up Rooftop Solar in the Residential Sector

Existing market challenges for the stakeholders lead to the slow uptake of rooftop solar in the residential sector. For the consumers, high upfront cost, difficulty in accessing finance, lack of awareness, and lack of access to suitable roof spaces are some of the major challenges. The solar developers and financiers also find it unfavourable to serve the residential sector as compared to the industrial, commercial, and institutional sectors. This is due to the small and distributed nature of residential solar systems. For the developers, this leads to higher business development and logistic costs. Developers also often find it challenging to access the residential rooftops for regular maintenance. From the perspective of financiers, solar loans for residential consumers mean a large number of small loans which will increase their transaction costs. There is also the issue of the collateral lacking as rooftop solar systems do not have any secondary market currently.

However, a greater involvement from the distribution companies (discoms) in the rooftop solar value chain for the residential consumers could address several market challenges. Increasing capacity of rooftop solar can also benefit the discoms in multiple ways. With innovative business interventions, the discoms can take up new roles in the value chain and drive the scale up of rooftop solar in the residential sector.

SRISHTI SCHEME – CREATING OPPORTUNITIES FOR DISCOMS

From creating consumer awareness to demand aggregation, community engagement and financing, there are multiple roles the discoms can play to address the market challenges in the residential sector. Direct investment in the sector is also an option which can create an additional revenue stream. A greater involvement from the discoms in such roles can not only benefit the rooftop solar sector but also the discoms, which in turn would benefit the end consumers.

Recognizing this, the proposed Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) scheme under Phase – II of Grid Connected Rooftop Solar Programme by the Ministry of New and Renewable Energy (MNRE) emphasizes on the importance of increased involvement from the discoms in facilitating faster adoption of rooftop solar. The Cabinet Committee on Economic Affairs has approved a performance-based incentive for the discoms under Phase – II.

According to the press release, the discoms are to act as the nodal point for implementation of the programme and can claim an incentive amount for the installed capacity of RTS achieved above 10 per cent from a base year. The incentive structured progressively also rewards higher capacity achievement.

Source: Press Information Bureau (PIB), Government of India