5 Reasons Why Rooftop Solar Is Set To Boom in India

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India missed the solar target of 2022 and rooftop solar is of the biggest reason for that. But there is reason to be optimistic about the future . We list down 5 reasons why reasons why rooftop  solar is going to boom in India.

At the UN Climate Change Conference (COP26) in Glasgow in 2021, India made the audacious announcement that it will achieve net-zero emissions by the year 2070. In August 2022, the Indian government updated the nation’s nationally determined contribution (NDC), a plan for addressing climate change. India aims to generate 50% of its total power capacity from non-fossil fuel sources by 2030, by the NDC. The essential sector of solar energy will make a substantial contribution to this national goal. While rooftop solar systems are placed on-site, utility-scale systems are off-site systems.

Of the 100 GW of solar energy by 2022, the utility-scale portion was supposed to provide 60GW of this total capacity, and the rooftop solar segment was supposed to supply the remaining 40GW.

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Most research findings and the government’s own estimates suggest that just less than 12 GW of the 40GW rooftop solar target will qualify as installed as of March 31, 2022. Only 17% (2,010 MW) of this is accounted for by the residential sub-segment, which is minuscule in a country with 300 million households. This is mostly due to a lack of consumer knowledge, administrative and operational problems with net metering approval, a delay in the payment of federal and state subsidies, a lack of appealing financing choices, etc.

Due to the strong regulatory push and rebounding market demand, we anticipate that the expansion of residential rooftop solar installations would pick up speed soon throughout India. According to research, the residential rooftop solar industry would probably reach 3.2 GW of total installed capacity by FY2023.

Solar Financing

One of the biggest reasons why rooftop solar didn’t grow was the lack of financing. If we take an example of a 5 kW solar rooftop, in the case of an off-grid connection, it will cost around Rs 7 Lakh and in the case of an on-grid case, it will cost around Rs 3 Lakh. 

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But because there wasn’t any solar financing, people had to go with either personal finance or home finance. In both scenarios, the rate of interest was higher. 

But now banks like ICICI, HDFC, SBI, and a few others are beginning to offer solar loans. It means now it will be easy for the residential sector to adopt solar, especially if the government makes these part of priority sector lending targets for these banks. 

National Rooftop Solar Portal

Previously there wasn’t any centralized process for the central financial assistance (CFA) subsidy. Every state Discom had a few authorized solar installers who can do the subsidy projects. In some states, the subsidy was given before the start of the project while in some states the subsidy was given after the completion of the project.

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But now India has a centralized platform to apply for and avail of the subsidy. This platform has all the information related to solar subsidies.

This platform is going to play a very key role in the adoption of solar in the rooftop segment. Aligned to the platform is the conversion of many hitherto reluctant state governments to the cause, leaving barely any holdouts for more aggressive solar capacity additions. Unfortunately, it remains the most backward states like Bihar, Bengal and a few more that are well behind, even as other states move ahead. 

ALMM

Now India has 75 solar module manufacturers (still adding) who are manufacturing solar modules within the country. Previously solar installations use to take time as most of the modules were coming from out of India. Now the time difference in the demand and supply has been reduced by the push for domestic manufacturing.  With production only set to grow further , prices can also be expected to moderate, improving accessibility to solar for more people. 

Increasing Number of Solar Installers in India

In the last 2 years, many people have ventured into the solar business. Now people are seeing it as a very serious business, not just a side hustle of doing the installation. Industry experts estimate a number between 8-10,000, of which at least 2000 installers are supposed to have experience of more than 3 plants, small or larger.  

In the process of generating business, they are educating people about the benefits of solar. Post-COVID-19 people are more aware of solar energy, they know its benefits and this awareness is going to increase. And because of this awareness, solar adoption will increase.

Energy Crisis in India

India is going through an energy crisis. Just a few months back, India didn’t have enough coal to generate power. But day by day the energy demand is growing. This is putting a lot of pressure on the power plants, even as coal consumption rises proportionately.

Because of this people are exploring ways to be energy independent and disconnect themselves from the national power grids. Solar is the only viable option for them.

Not just the residential but the commercial sector is also now adopting rooftop solar for their power requirements.