Loading...

MNRE and industry discuss scaling up of rooftop solar market to 40 GW by 2022


24 March 2015 | BRIDGE TO INDIA

MNRE and industry discuss scaling up of rooftop solar market to 40 GW by 2022

On Thursday last week (19th March 2015), the Ministry for New and Renewable Energy (MNRE) called for a meeting to discuss how to best scale up rooftop installations in India to 40 GW (cumulative) by 2022 (refer). It was chaired by Upendra Tripathi, Secretary MNRE, and Tarun Kapoor, Joint Secretary MNRE, and was attended by approx. 300 representatives from the industry. The discussion began on the somber note that despite some existing government policies and the improving economic fundamentals for rooftop solar, the market has not yet gained momentum.

  • Stakeholders proposed abolition of subsidies for urban grid-connected solar installations
  • Most stakeholders proposed for standardization guidelines for components, installations and grid-interconnectivity to be followed by all installers
  • Availability of finance and cost of finance was the third topic discussed

Most installers pointed out (and ministry officials conceded) that the lack of funds and sanction delays associated with the subsidy process has been the primary bottleneck for the market segment. The ministry officials informed that, for 358 MW of subsidy applications received till date only 42 MW actually received it. BRIDGE TO INDIA had previously raised the issue in our analysis with the conclusion that the subsidy mechanism does more harm than good for the market (refer link 1link 2 and link 3). To close the gap between demand for subsidy and available funds, the government had recently proposed to reduce the subsidy amount to 15% of the capital cost so that more solar can be supported with available funds. Most stakeholders in the meeting, however, preferred that the subsidy mechanism be scrapped altogether for urban grid-connected solar installations. The ministry officials did not spell out their conclusion.

Another topic of discussion was ensuring the quality of new installations and the role of channel partners. Most stakeholders were of the opinion that the process for becoming a channel partner was costly and time consuming, especially in the context of unavailability of subsidy funds. While some stakeholders thought that the channel partner route helped ensure quality, most others proposed that instead of the channel partner mechanism, there should just be standardization guidelines for components, installations and grid-interconnectivity that should be followed by all installers. The ministry officials noted the stakeholder suggestions but again did not spell out their conclusions on the subject.

Availability of finance and cost of finance was the third topic discussed. The ministry officials presented the steps taken by the ministry to bring Indian banks on board to provide more finance (refer) and how international multilateral financing institutions can help reduce the cost of finance (refer).

On the whole, no out-of-the-box suggestions came up from either the industry or the ministry. This is what makes realizing the 40 GW target for rooftop solar such a daunting task. BRIDGE TO INDIA believes that direct government incentives can only go so far, especially in light of the limited availability of funds to the sector. The primary objective of the government should be to create a functioning market place, get states and utilities on board and provide a level playing field to the industry. Net-metering/banking of power with fair compensation to utilities, non-discriminatory quality standards, active collaboration with states and education of end-customers on standards and benefits of solar installations are some of the larger non-incentive ideas that the MNRE could focus on. An opening up of the REC market to more buyers and sellers, as Mr. Abraham of Arise Solar has suggested in an email to us could also help. On the fiscal incentive side, based on BRIDGE TO INDIA’s analysis, interest rate subvention seems to hold the most promise from both the perspective of cost to government and ease of implementation (refer).


Recent reports

India Solar Map | December 2023

India Solar Map | December 2023

India Solar Map 2023 is an info-graphic report covering growth of utility scale solar sector – national and state-wise commissioned and pipeline capacity, leading market players and portfolio details of top 16 project developers. Capacity addition in 2023 fell 51% YOY to 5,924 MW taking total utility scale solar capacity to 59,840 MW. Total project pipeline stands at a record 74,161 MW.

India Corporate Renewable Brief | Q4 2023

India Corporate Renewable Brief | Q4 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

India PV Module Intelligence Brief | Q4 2023

India PV Module Intelligence Brief | Q4 2023

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technology and rating, global market scenario, pricing trends across the value chain, key policy developments and market outlook.

India Solar Compass | Q4 2023

India Solar Compass | Q4 2023

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and policy announcements, equipment prices, financial deals and other market developments. It also provides market outlook for the next two quarters.

Inter-state OA — opportunities and challenges

Inter-state OA — opportunities and challenges

Inter-state transmission system (ISTS) open access (OA) renewable market is growing strongly on the back of multiple drivers including a waiver from ISTS charges together with decarbonisation pressure on corporates and streamlined transmission connectivity approval process. However, the ISTS route savings are viable only for projects commissioned by June 2026 (at least 75% ISTS charge waiver).

India Corporate Renewable Brief | Q3 2023

India Corporate Renewable Brief | Q3 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy & regulatory issuance, financing, PPA tariffs and other market trends.

To top