The rooftop solar market in India holds a huge potential, considering the fact that it has grown rapidly in the last five years. India has set an ambitious renewable energy target of 175 GW by 2022, including 100 GW of solar power, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.
By 2019, despite from the strong growth, India has achieved only 10% of the 2022 target capacity. This is below the run-rate anticipated by the government, that’s why it must accelerate the installations of new solar systems. At the moment, 70% of the market growth is driven by commercial and industrial consumers.
The main challenge is that although Government is providing subsidies to encourage rooftop solar installations, the financial support is only available after commissioning. Meaning, the bear of the initial investment falls upon the consumer. A survey called ‘Scaling Up Rooftop Solar in SME’ in India showed that the level of awareness was quite low and that many high power consuming SME-s don’t install it because of the performance risks. Therefore, India needs to share more information about the costs, benefits and other important information. Yet, as people say, there is always a solution.
Tim Buckley, co-author of the note and IEEFA’S director of energy finance studies has suggested:
“There has been significant investment in preparing the regulatory framework, upskilling the workforce for small scale deployments, and in educating the market. However, regulatory uncertainty is slowing the pace of rooftop solar installations. Policy certainty and more financial subsidies would also incentive the market…”
Apart from all the factors that effect negatively the solar system in India, a considerable number of companies with high electricity costs are switching to rooftop solar systems. In many Indian segments, the cost of solar rooftops is lower than the existing tariffs. In the government sector rooftop solar has become competitive in Haryana, Delhi and Uttar Pradesh. Furthermore, the rooftop solar system is also achieving grip parity in the residential sectors.
To conclude, the only way to accelerate the growth is clarity on policies, faster delivery on subsidies and better financing options. India must not waste this opportunity!