Despite being a natural fit for India, rooftop solar infrastructure is not seeing the scale of installations that the nation’s utility segment is capable of. Most rooftop installations are coming primarily from government, commercial and industrial projects, while the residential rooftop market stagnates. Baishakhi Dutta, senior business journalist, Electronics Bazaar, delves deeper into this market in a conversation with Maxson Lewis, director, Magenta Power, to find out what the sector’s current challenges are, as well as the possible solutions for faster growth.
EB: Which segment of India’s rooftop solar market is growing the fastest? And going forward, what scope do you see for further growth?
In the last financial year, India added more rooftop solar power capacity compared to the previous three years combined, thereby making it the fastest-growing segment in India’s renewable energy space. Most of this growth has been in the commercial space. Residential adoption of solar rooftops is challenged by the lack of upfront capital. Unlike Europe and America, homes in India do not have standardised roof structures. This reduces modularity and in turn increases the overall cost of installation. Yet, we foresee that the fastest growth in the solar rooftop market, in percentage terms, will be steered by the residential installations.
Interestingly, even at this scorching pace of growth, we have just scratched the surface. Rooftop installations in India have such potential that even if barely 5 per cent of the total roof space available for solar power across India is used, we can negate the need for commercial, ground-mounted installations.
EB: How acceptable and affordable is rooftop solar in India?
There is only limited understanding and acceptability of rooftop solar in India, compared to other countries which have accepted it with open arms. For now, the industry is still gravitating towards larger projects (land based commercial projects) because acquiring rooftop customers is still economically unviable. But, rooftop solar is what will drive faster adoption of solar power across the country. This market is yet to grow to its full potential.
Net metering now allows the consumer to reduce electricity bills and use the grid like a pseudo-battery, sending roof-top generated solar power to the grid when the production is higher than consumption, and netting if off when consuming power off the grid when there is no sunshine.
The affordability of installing rooftop solar is improving, as technology and modularity in systems and structural design are pushing down the prices. But the payback period of 4.5 years for rooftop solar remains the same even at existing price points.
EB: Between being grid-connected and off-grid, which option is more profitable?
Being grid connected is predominant in urban areas. In areas where grid availability is high, it does not make sense to go off-grid, at least not yet. This is because the batteries needed for off-grid systems make the proposition expensive. A grid-tied system effectively uses the grid as its own low-cost pseudo-battery. In areas where grid availability is an issue, the penetration of hybrid and off-grid systems is higher.
EB: What should states do to promote grid-connected and off-grid rooftop solar systems?
First, state grids and utility companies are choosing to think of rooftop solar as a pain that they have to deal with, rather than a supporting ecosystem. Hence, the requirement for multiple permissions and inordinate delays in local clearances are the norm, reducing the appeal of rooftop solar.
Second, the net-metering model needs clarity. While the state electricity board guidelines are in place, the implementation of this is suspect. This is visible especially at utility offices where lack of awareness among the staff creates huge challenges.
Lastly, the confusion on subsidies must be addressed. Many customers are postponing their decision to go solar in anticipation of subsidies. This is hampering the industry’s growth and creating unhealthy competitive practices which, sooner or later, will hurt customer sentiments.
EB: Do you think there is a need for a safeguard duty? How do you think this is affecting the solar businesses?
We are against artificial interventions in business and hence are not in favour of safeguard duties. Any protectionist measure will serve a short term goal and leave a long term debt. Instead, the government’s efforts should be focused on smoothening the process for customers to go solar, as easily and quickly as possible.
EB: What financial assistance is the Ministry of New and Renewable Energy (MNRE) providing to the solar players in India?
The central MNRE based subsidy has been removed and devolved to the respective state based agencies. So it varies from state to state.
EB: What effort is the government putting in to provide loans for solar rooftop systems?
The government has directed banking institutions to provide financial support via loans to individuals looking for rooftop solar solutions. However, these are subsumed under home loans. If banks were to support rooftop solar loans as a product in itself, it could be a game changer for the Indian solar sector.
EB: How is your business performing in India?
Magenta is focusing on democratising power generation, one rooftop at a time. We are a solutions company and the intent is to improve customer adoption of renewable energy. This approach has served us well in carving out a niche for ourselves.
In the generation space, we are focused on rooftop based micro-generation for end consumers – residential, commercial and industrial. We are working on technologies like low cost remote monitoring systems integrated with the grid meter systems. This will give users an instantaneous view of their generation and consumption trends, along with pre-emptive alerts for maintenance.
On the adoption side, we have come up with innovative solutions to integrate solar power with traditional as well as new-age uses. For instance, we have set up India’s first solar based electric vehicle charging station in Navi Mumbai and have plans to set up a 100 more this year.
EB: How can the rooftop solar sector grow faster in the country?
The potential for rooftop solar is endless and is growing. But the pace can increase a lot more, given the huge latent demand, the amazing business case and the social benefits of setting it up. We need to develop a solutions-based view rather than a commodity based view to rooftop solar and this can happen with information, education and innovation.
Adoption of policies like Byelaw 171, which permits usage of open terraces by individuals in a cooperative society, can be a catalyst for families who do not have a private terrace but have an interest in solar power generation. There should be a clear framework for banks and financial institutions to secure rooftop solar installations as an independent asset against which they can offer viable loans. This can open up the rooftop market, which finds itself constrained by that one bottleneck of no upfront capital.
