How India can boost solar energy adoption

With growing urbanisation, universal availability of electricity, and overall upward mobility, power demand in India is expected to triple by 2040. It is simply not feasible nor sustainable to meet this explosion of demand through traditional fossil fuels. We have the technology available today to meet this demand with clean energy.

Home solar and batteries will be a critical piece of this future, ensuring everyone has access to sustainable, affordable, and reliable power.

Across the globe, the energy sector is witnessing a transformation with sustainability emerging as a major theme. All these factors have necessitated a growing focus on renewable energy technology.

India has set a target of about 450 Gigawatt (GW) of installed renewable energy capacity by 2030, with solar contributing about 280 GW (about 60 percent ). While the target is certainly admirable, a lot needs to be done to make this a reality.

Current scenario of solar adoption in India

The Government and industry have taken certain steps to boost solar adoption in India. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to deploy renewable energy capacities to the tune of 227 GW by 2022, with solar accounting for 114 GW.

The Government of India’s plans to develop a ‘green city' in every state of the country will help mainstream environment-friendly power.

The ‘green city’ will have solar rooftop systems on all its houses, solar parks on the city’s outskirts, waste-to-energy plants, and electric mobility-enabled public transport systems. Some states have also announced subsidies for the installation of small solar plants in homes.

The pandemic has increased greater awareness on health, sustainability, climate change etc. which has, in turn, led to greater demand for green energy solutions such as solar. At the same time, as new technologies boost efficiency levels, the cost of generation of solar power is expected to fall too.

It is likely to go as low as Rs 1.9 per unit in India by 2030 as per a joint study by TERI and the US-based think tank Climate Policy Initiative (CPI).

Plan of action: A comprehensive way forward 

Over the last couple of years, the adoption of rooftop solar has been growing steadily, despite the overall penetration still being quite low. While the current initiatives are certainly welcome, there’s more to be done, especially for rooftop solar.

The technology available today allows for rapid deployment and installation of home solar energy on rooftops across the country. As the growing installer network gets trained to deploy projects quickly, households can potentially generate their own energy with the sun within weeks of signing up.

As more solar is deployed, we should also begin installing more batteries to allow the sun to power homes and businesses at night and give people backup energy when the larger system fails.

However, residential rooftop solar installations in the country still account for just a small fraction of the total installations. Therefore, there needs to be a more cohesive approach to help ramp up the adoption of rooftop solar energy in the domestic sector. Some of the key recommendations are:

Building awareness

In India, there is little awareness of rooftop solar and battery technology and its applicability in the household context.

This lack of awareness about solar products, processes, and advantages presents a major challenge. Building targeted awareness and educational programs that make information on domestic solar easily accessible is critical.

Consistent regulatory policies

Currently, India lacks a consistent policy on regulations for rooftop solar. For instance, while some Indian States have placed restrictions on the size of the plant that can be installed at a resident’s facility, there is no uniformity. Instead, having clear guidelines that are based purely on technical considerations is recommended.

Also, frequent policy changes, especially on a retrospective basis can severely impact customer confidence and dampen demand.

Standard metering and pricing

A recent report by the Asian Development Bank cites the poor and piecemeal implementation of net metering policies as a major roadblock for the uptake of rooftop solar systems in India.

For instance, several states have capped the maximum capacity limit for rooftop solar systems to be connected to the distribution grid at 1 MW per metering point. This ceiling which is based on factors such as poor financial health of discoms can hinder large-scale deployment.

Therefore, a consistent national policy that is conducive to greater deployment is much needed. At the same time, it is also important to improve market stability to help address the price volatility of solar systems.

Boosting domestic solar manufacturing

Given that a large chunk of solar infrastructure is imported, taking steps to reduce dependence on imports is key. For example, in November 2020, the Government announced a production-linked incentive (PLI) for high-efficiency solar PV modules manufacturing.

The scheme is worth Rs. 4,500 crore (US$ 610.23 million) over five years. Also, customs duty on solar inverters was increased from 5 percent to 20percent, and on solar lanterns from 5to 15 percent to encourage domestic production. While these measures are welcome, more needs to be done to boost domestic manufacturing.

Financial assistance

One of the biggest factors holding back the adoption of rooftop solar, especially in the domestic sector, is the need for high upfront capital investment. This can be addressed through a financing and credit guarantee scheme that can offer customers much-needed confidence, without having to worry about lowered credit credentials.

The introduction of rooftop solar-specific loans that do not require the proposed rooftop to be offered as collateral will go a long way in boosting adoption.

The sun is one of the most abundant sources of energy in the universe. Let’s build an energy system that maximises the benefits of solar energy, giving everyone access to clean, affordable, and reliable power day and night.