Under the solar mission, India is supposed to have put in 5,000 megawatt of solar plants on the roofs of houses, apartments, offices, factories and other buildings by March 2017.
Instead, the actual achievement is just 704 megawatt as of July end. The highest contributor is Maharashtra, home to 123 mw, followed by Tamil Nadu, which has 98 mw.
Out of the 704 mw, only 33 mw has been installed on residential rooftops. As a result, out of the Rs 5,000 cr budgeted for subsidy support for residential installations, the total amount that can be claimed so far is just 73.58 cr.
To spur investment on the solar farm side, the government has set up special vehicle under the supervision of NTPC Ltd.
This part of the progam has been largely successful so far. Against a target of adding 12,700 mw of peak power by March 2017, India was able to add 12,290 MW by the deadline. In the current financial year, another 10,000 megawatt will be added on the solar farm side.
Part of the reason for the poor progress on the rooftop side has been a lack of awareness, and relatively lower levels of government support.
ROOFTOP SOLAR SUBSIDY
Realizing that not much action was happening on the rooftop front, the Centre in 2015 announced that it will provide 30% of cost of setting up rooftop solar plants in ‘general category’ states and 70% in special category or very underdeveloped states.
However, the plan — that can only be availed for residential buildings — remains unknown to most people.
Under the plan, a person can get 30% of the benchmark cost of his rooftop solar plant reimbursed from the government.
The benchmark cost approved by the government at present is Rs 75 ($1.15) per watt.
The scheme envisages a grid-connected installation, and not a standalone installation. It is not clear whether the subsidy support can be availed for standalone systems.
Under the grid-connected rooftop system specified by the government in project documents, the installation will require only the panels, an inverter and a two-way electricity meter. Unlike standalone systems, it will not require a battery, which can lower the cost by about Rs 10,000.
Going by online prices, solar PV panels currently cost about Rs 8,400 for a 250-watt panel, or about Rs 67,000 for 2,000 watts. A 2,000-watt inverter costs about Rs 33,000, taking the total to Rs 1 lakh.
Installation charges and the cost of the metal clamps and stands will cost another Rs 15,000-20,000, taking the total to about Rs 1.2 lakh.
Under the government’s subsidy scheme, anyone who puts up such a system can get subsidy at the rate of Rs 22.5 per watt, and a 2,000-watt system is eligible for a subsidy of Rs 45,000 irrespective of how much is actually spent on the installation.
As a result, net of subsidy, the cost of such a system will be about Rs 75,000.
The operating efficiency of solar plants in India is in the 18% range. Assuming an efficiency of 16%, such a system will generate 7.7 units of electricity per day, or about 235 units per month. At a price of Rs 6 per unit, the system will generate earnings of Rs 1,410 per month for its owner.
The power generated by the system is fed into the two-way meter, which diverts part of it for the use of the household and any excess power back into the electricity grid. If the house generates more electricity per month than it consumes, the electricity company will pay the person for the net power fed into the grid.
The government also allows special companies, known as Renewable Energy Service Company (RESCO), to lease rooftops belonging to private individuals to set up such installations. Given that all rooftop plants atop residential buildings are eligible for subsidy support, it is likely that the RESCO will be provided with subsidy support as well.
However, India has not seen the emergence of such companies on a significant scale yet.
The scheme is implemented via state nodal agencies appointed by the central government (see picture above).
However, it is not clear whether all electricity distribution companies and state electricity boards have put in place the required infrastructure to implement the scheme yet.