5 Key Challenges Hindering the Growth of India's Hybrid Rooftop Solar

Hybrid rooftop solar connections in India are now slowly rising. The growing demand for this segment can be sensed from the increasing trend of most inverter firms operating in India launching hybrid inverters. Now, the majority of inverter makers in India — such as Luminous, Microtek, Eastman Auto & Power Ltd (EAPL), Deye, Sungrow, Solis, Solax, Wave, Solar Yaan and others — have a dedicated segment of hybrid inverters. Most of these launches have taken place in the last two years.

But why has it gained traction in the last two years? Manufacturers told Saur Energy that it was primarily due to the inclusion of hybrid rooftop solar under the subsidised connections of the PM Surya Ghar scheme. This was complemented by reduced energy storage prices, which made hybrid systems slightly more affordable.

In the last two years, these installations have been seen in new connections in weak grid areas in the residential category and Commercial & Industrial (C&I) connections. Several states, such as Uttar Pradesh, Bihar, Kerala and others, have also issued bids to install hybrid systems in government buildings. This has also proved beneficial in areas where policies do not support surplus energy exports under net metering or for C&I consumers.

However, several issues are still hindering the growth and adoption of hybrid rooftop systems in India. The following are some of the key hurdles that are preventing mass adoption.

1. Higher costs of hybrid inverters

Compared to a conventional rooftop solar system, which comprises solar modules, grid-tie inverters, ACDB and DCDB panels, earthing and wiring connections, hybrid inverters have additional requirements. While the inverters themselves are priced higher than conventional grid-tie inverters, there is the added cost burden of storage devices.

Vendors who install rooftop solar systems told Saur Energy that hybrid inverters are almost two to five times more expensive than conventional inverters, increasing the overall system cost. Industry experts claimed that while a 3 kW grid-tie inverter costs anywhere between Rs 15,000 and Rs 30,000, the cost of hybrid inverters ranges between Rs 35,000 and Rs 80,000, depending on the brand and features.

On the other hand, battery costs for a 3 kW system range between Rs 30,000 and Rs 50,000, based on the technology and brand. However, the range could also go beyond this in many cases. 

If we compare the total price of components required for a 3kw rooftop solar system, consider these facts available on the public domain. Waaree Energies is now selling its on-grid rooftop solar kit for a 3.2 kw system (with panels, inverters and other essentials) at a price of around Rs 1.32 lakh. On the other hand, it is selling a hybrid combo pack (with panels, hybrid inverter and Li-ion batteries and other essentials) at Rs 3.66 lakh, hinting at the large difference in the component prices itself of the two different setups. 

2. Reluctance of vendors for hybrids

Another compounding issue is the reluctance of many national- and state-level vendors to offer the option of hybrid rooftop connections, despite customer demand. This is primarily due to their years of experience handling one particular technology and the additional burden of learning and managing new technologies. Many customers told Saur Energy that vendors are not keen to install these systems.

3. Access to finance

Several issues continue to affect the ease of access to finance. The main objective of hybrid connections is to increase penetration in weak grid areas, which are mainly rural. However, access to solar loans from financial institutions remains a challenge due to the creditworthiness of many rural households, which are primarily agrarian.

Several banks are hesitant to disburse loans to farmers whose farm loans have been waived off or who have a bad credit history. Some banks that are open to lending for conventional rooftop solar are more familiar with grid-tie inverters and the loans sanctioned for that segment. This new and relatively expensive technology is finding it difficult to secure financing in many cases, despite the Union and state governments pushing for rooftop solar, including hybrid connections.

4. Battery issues and technology

Consumers of hybrid rooftop solar systems often face issues related to the lack of space to install additional battery packs for their rooftop solar connections. Additional costs, limited battery life, and the need for reinvestment after a period of time are some of the concerns these consumers face.

5. Not enough takers in the residential category

Experts said that although there are takers for hybrid rooftop solar connections, a large share of these installations are concentrated in the C&I segment and government buildings, either through tenders or among a small section of residential consumers who can afford such systems.