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Jul 17, 2017 01:54 PM IST | Source: Moneycontrol.com

Here's why govt may fall short of 40 GW target for solar rooftop power by 2022

Challenges in the net metering implementation and financial implementation are the two headwinds that must be met head on, says a report.

Here's why govt may fall short of 40 GW target for solar rooftop power by 2022

India’s ambitious target of plugging into 40 gigawatts (GW) of rooftop-solar energy by 2022 seems difficult, says a report.

A report CARE Ratings and PHD Chamber of Commerce and Industry states that “implementation of rooftop solar is taking place at a much slower pace and it seems unlikely that the government would achieve its 40GW target by 2022.”

Prime Minister Narendra Modi had committed India to ensure that its energy demands would be met with 175 GW of renewable energy by 2022. Of this, 100 GW would be solar-powered. 40 GW of this energy would be through solar-powered rooftops.

This could due to two major headwinds in the sector, primarily:

Challenges in Net Metering implementation: Net metering is the system by which customers who generate their own electricity from solar power can feed their unused electricity back into the grid and be compensated for that.

However, the heavily subsidized solar tariff rates would imply that while they would be selling this unused reservoir of electricity at a loss, which would further discourage customers from net-metering.

Also, distribution companies are also wary of implementing the Net-metering for their own reasons.

Financial implementation: Union Minister Piyush Goyal had stated that India would need to invest an estimated of Rs 6000 crore to achieve the 100 GW target. This amounts to Rs 6 crore per megawatt.

With particular reference to rooftop-based solar grid, the CARE report says an allocation of Rs 5,000 crore was approved for the implementation of grid-connected rooftop systems over a period of five years up to 2019-20 under National Solar Mission (NSM).

This move was expected to support the installation of 4,200 MW solar rooftop systems in the country between 2016-20.

Nonetheless, this still falls short of the initial target of 40 GW of rooftop solar power that was outlined.

The report also stated that the provision  of  rooftop  solar  and  10%  renewable  energy  is  now  mandatory  under  Mission  Statement and Guidelines for development of smart cities

Also, the Reserve Bank of India has included renewable energy projects under priority sector lending for which bank loans up to a limit of Rs.15 crore to borrowers will be available for renewable energy projects. This includes grid connected solar rooftop and ground mounted systems.

With the current need of the hour being the resolution of the non-performing assets, it remains to be seen to what extent the RBI is willing to lend a hand in this exercise.

A Moneycontrol report stated that in light of current trends in the solar industry, a target of acquiring anywhere between 45 to 60 GW of solar energy would be an achievable target.

With only 3 percent of the total solar rooftop solar energy having been met so far, the CARE report stressed the need for specific policy initiatives as well as offering incentives in order to attract financial investors to support the solar energy targets as the way ahead.
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