On September 6, 2023, Sanchi, home to a World Heritage Site in Madhya Pradesh, was inaugurated as India’s first solar city. The project, which involves the installation of Rooftop Solar panels at all institutional buildings like schools, government offices, railway stations, post offices, and streetlights, has been claimed to reduce more than 14,000 tonnes of Carbon Dioxide emissions annually, which is equivalent to the amount of Co2 reduced by over 2 lakh adult trees. In a similar effort, Uttar Pradesh has announced plans to develop Ghaziabad as the next solar city in the state after Ayodhya. The city is expected to meet 10% of its electricity demand with solar power in the coming four years. Out of the targeted 22 GW power generation capacity under the plan, 6 GW is planned from rooftop solar systems.

With a total capacity of 9.6 GW as of June 30, 2023, India’s rooftop solar installations have seen an average increase of 2 GW in the past two years. This can be seen in the context of total solar installed capacity of ~66 GW. In May 2023, the data released by the Ministry of New and Renewable Energy (MNRE) revealed that over 1 GW of rooftop solar capacity was added between September 2022 and March 2023 alone, which has the potential to power around 7 lakh households for a year. This is further expected to increase to 4 GW in the 2024 financial year. With the aim of expanding the country’s solar capacity, MNRE has asked the states to develop at least one solar city within their borders. As of March 2023, Gujarat is leading in solar installations, with an 85% increase in installations in the first quarter of 2023.

Policies enabling the adoption of Rooftop Solar Panel System

The National Solar Mission, inaugurated as the Jawaharlal Nehru National Solar Mission in 2010 under the National Action Plan on Climate Change, is the first policy that addresses India's energy challenges by promoting solar energy. Initially, the mission targeted achieving 20 GW of solar power generation by 2022 through 40 GW rooftop projects and 60 GW of large and medium scale Grid-Connected projects; however, this target was increased to 100 GW in 2015. 

Apart from limited citizen awareness, the cost of installation of solar rooftop systems also poses a roadblock to switching to solar power use. The cost of installation depends on the height of the building, the project capacity, and the type of panels being used. The overall cost without subsidy can range between INR 70,000 to INR 4,00,000 (consumers can calculate the exact amount depending on their requirements on the solar rooftop calculator portal). Therefore, several other schemes were launched to support the mission, which focuses on providing financial incentives to enable active participation. In the first phase of the mission, generation-based incentives were provided. In 2012, Net metering was implemented, which enabled the owner to sell the extra electricity generated to the grid and buy it back in times of need.

In 2015, the Grid Connected Roof-top and Small Solar Power Plants Programme was launched to provide financial assistance for residential units to set up rooftop solar systems and incentives for power distribution companies (DISCOMs). In the second phase of the programme, the government launched the National Rooftop Solar Policy in 2019. Under this scheme, MNRE is providing a 40% subsidy for the first 3 KW and a 20% subsidy for 3 KW  to 10 KW of solar panel capacity. A 3 KW system produces 12 units of electricity daily, that is 360 units in a month, which is sufficient to power an average Indian household. For residential welfare societies, the subsidy is limited to 20% for 10 KW. The scheme is being implemented by DISCOMs in the state. Therefore, residential consumers have to pay the remaining amount of the rooftop solar system (cost after reducing the subsidy) to the designated vendor as per the prescribed rate. In 2017, the Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) scheme was introduced, which strengthened the role of DISCOMs as a nodal agency. Under the scheme, the DISCOMs will receive incentives of INR 14,450 crore for the installation of 35 GW of solar rooftops.

In addition to these national level policies, several states have also taken key policy initiatives to boost the use of rooftop solar panel systems. For example, Gujarat introduced a ’Rent a Roof’ program in 2010, which allowed the residents to give their roof on lease to a third party for the generation and consumption of power for a sum of INR 3 for every unit of energy generated.

Role of Local Bodies in the installation of rooftop solar panel systems

Public buildings, housing societies, and individual residential units offer huge potential for the installation of rooftop solar panel systems. The urban local bodies (ULBs) play an important role in facilitating this installation. However, there is a lack of ULB focussed policies in India. In most of the policies, state level bodies and DISCOMs are appointed as the nodal agencies for their implementation and installation. For example, the Uttar Pradesh New and Renewable Energy Development Agency is the nodal agency for the implementation of the Uttar Pradesh Solar Energy Policy 2017.

In 2018, MNRE devised guidelines for Solar Rooftop Adoption by ULBs, which highlighted the role ULBs can play in scaling up the rooftop solar panel market. The document says, “ULBs are uniquely positioned to remove many of these barriers through policy changes, mainly by incorporating mandatory provisions for solar rooftop installation on buildings and by promoting market development in their communities. Hence, an ecosystem can be developed through which the ULBs can become a one-stop shop for all solar PV rooftop approvals and subsidies''.

As per the guidelines, some of the ULB's roles include launching citizen/consumer programs for awareness and promotion of the rooftop solar market, making the technology accessible to residents through innovative financing mechanisms, designing sector specific programs, and adopting solar rooftop targets.

Cities moving towards the adoption of rooftop solar panel systems

• In the first phase of transforming Indore into a solar city, the civic body will offer subsidies to the residents for the installation of solar panels. In addition to this, solar panels will also be installed on the rooftops of government buildings with the aim of increasing current generation capacity from 40 MW to 300 MW per year. Currently, a total of 4,875 people in and around the city are using rooftop solar systems to meet their power needs.

• Chandigarh generates over 55 MW from solar energy through rooftop solar systems installed in government buildings and in some residential sectors. To expand the adoption of the system in its residential sectors, the UT administration invited applications earlier this year for free installation.

• The Rooftop Solar Scheme for Jammu City aims to install rooftop solar systems in 50,000 residential buildings. The city already has 5 MW capacity installed on residential buildings and plans to expand to 200 MW by 2024.

• The Goa government is planning to make Panaji a ‘100% solar-powered city’ in the next two years by installing solar rooftop systems and creating consumer awareness. As of now, 81 housing complexes are being considered for the installation.

Role of citizens

The role of citizens in the adoption of rooftop solar systems is limited to that of consumers. At present, the sector is primarily driven by the government’s efforts rather than community based efforts. However, these efforts are only advisory in nature. The expansion of rooftop solar systems highly depends on citizens’ willingness to adopt them. Hence, a larger share of the government’s effort is focused on urging the citizens to adopt the system, either through subsidies or through citizen awareness campaigns. The government has also introduced community solar rooftops to involve residents who do not have space to install the system at household level.

Challenges

Despite the achievements and huge potential, cities still struggle to adopt rooftop solar systems, mainly due to a lack of awareness, the high cost of installation, the unwillingness of DISCOMs, net metering, frequent policy revisions, slow approvals, and limited financing options. Rooftop solar systems reduce the bill generated by high paying consumers for the DISCOMs; hence, their participation in promoting the system is low. Net metering allows consumers to sell the excess electricity generated from solar rooftops to their DISCOMs; however, the current cap on how much they can sell back is low, which is restricting the adoption of the system. These restrictions can slow adoption by up to 20%. Similarly, frequent policy revisions, especially in the Solar Policy issued by the State Electricity Regulatory Commissions,  also destabilize growth.

There is a lack of standard processes to obtain statutory approvals for the installation of the system at the state level, plus the current processes of approval vary state-wise. This slows down the process of installation. In addition to this, nodal agencies ask for additional clearances from consumers that are absent in the state’s solar policy in some cases. Another major challenge is the absence of financing options. At present, loans specific to rooftop solar installations are unavailable. Financial institutions are often reluctant to lend money for small scale projects.

Way forward

Out of the 40 GW targeted installation, only 9.6 GW had been installed as of June 2023. This indicates underperformance in the sector as well as highlights the fact that the adoption of rooftop solar systems is still at a very nascent stage in India. The underperformance can be predominantly attributed to regulatory and informational constraints. Rooftop solar systems require a bottom-up approach that focuses on strong user engagement. But the current policy scenario is based on a top-down approach. The major policy roadblock is caps on net metering that do not allow larger commercial institutions to adopt rooftop solar systems. In the past, many states have withdrawn from the net metering policies, hindering the adoption.

Therefore, it is important to modify these caps on net metering and even remove them, if possible, to benefit existing consumers as well as attract new ones. Another important step could be to develop a structured framework for approvals and integrate ULBs as a single window facility for the entire ecosystem of rooftop solar systems. Do you have a rooftop solar system at your house? Does your city have community solar rooftops? Does your state have a solar rooftop policy?