Kerala’s rooftop programs – Lessons for other states

Weekly Update: Kerala’s rooftop programs – Lessons for other states

Media reports claim that Kerala’s ambitious rooftop plan to set up 10,000 off-grid solar power plants would be missing the deadline. However, based on our interaction with the officials, it seems that the program is likely to be completed well ahead of schedule as per the December 2014 deadline set by MNRE. As of now, around 6,000 plants have been commissioned and the rest are already in pipeline. However, another program announced last year that aims at installing 25,000 grid connected rooftop power plants, faces delays and no power plant has been commissioned under the policy as yet.

  • The 10,000 rooftop program proposes attractive incentives to consumers by allowing state subsidies apart from the central ones
  • The 25,000 grid connected power plant program will probably be delayed due to issues with net metering, energy accounting and handling grid connectivity
  • The key learning from delays in subsidy disbursement in Kerala is to make a policy not dependent on central government grants

The 10,000 rooftops program (refer) is the first of its kind in India to incentivize off-grid power plants at this scale. It not only makes a lot of sense for Kerala, considering the substantial power deficit in the state, but also proposes attractive incentives to consumers by allowing state subsidies apart from the central ones. Despite the fact that there have been significant delays with the subsidy disbursement (complete subsidies have only been disbursed to around 1,000 systems) and issues with facilitation of low cost interest loans, the rooftop program is on track. The timely implementation of the project can be attributed to the streamlined processes under the program in terms of selection of vendors, dual subsidy mechanism, price benchmarking and quality assurances.

On the other hand, the 25,000 grid connected power plant program will likely be delayed due to issues with net metering, energy accounting and handling grid connectivity. As per BRIDGE TO INDIA conversations, the state electricity board in Kerala is hesitant to connect the rooftop power plants below the 11 kV line as it might face energy accounting challenges. Kerala now wants to increase the cut-off size of individual rooftop projects to have them connected to the 11 kV line.

Nevertheless, being the first state to announce and implement a distributed solar program in India at this scale, it is noteworthy that Kerala might successfully complete the 10,000 rooftop program ahead of schedule. It is a good case study for the other states that have recently announced or are in the process of formulating their rooftop policies or schemes. These include Tamil Nadu (refer), Uttarakhand (refer), Gujarat (refer) and Karnataka.

The key learning from delays in subsidy disbursement in Kerala is to make a policy self-reliant and not dependent on central government grants. Secondly, a policy for grid-connected rooftop projects needs to be accompanied with timely implementation of net metering. States that have communicated ambitious plans need to now focus on solving the ground level challenges such as grid connectivity, improvement of grid infrastructure and reducing the power deficit. This will enable a successful transition of solar in India from centralized large scale to small-scale rooftop.

This post is an excerpt from this week’s INDIA SOLAR WEEKLY MARKET UPDATE.

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