Residential solar rooftop fails to shine

With over 300 million houses in India, over 300 days of sunshine, an ambitious target of 40 GW of rooftop solar by 2020 and various states formulating rooftop solar policies, there should have been a solar revolution in Indian homes. Yet, the situation on the ground is quite different.

In the building sector, solar panels are primarily finding their way on the roofs of commercial, government and institutional buildings. Unfortunately, there has not been any major breakthrough in the residential sector. There are only a handful that has opted for rooftop solar energy in the cities despite high environmental awareness and access to technology and support.

In December 2015, the Indian government rolled out INR 50 billion (USD 750 million) funding for 30% capital subsidy for rooftop solar installations to create a total capacity of 4.2 GW by 2020. But that has not made the power of natural light attractive enough for consumers or even for solar developers, who are largely focusing on the commercial buildings and institutions.

“Suppose I want to install a solar rooftop of 10 KW in my house, it can easily cost me up to INR 1 million. Why should I be willing to spend so much? How will I get returns on my investment? It can take me 5-7 years,” Srinivas Krishnaswamy, chief executive of Vasudha Foundation, a clean energy think tank, toldindiaclimatedialogue.net.

Currently, there are two ways through which an individual can install a rooftop solar system. (S)he can choose the capital expenditure model by making an upfront payment. For those unwilling or unable to put up the money, there is the RESCO (Renewable Energy Servicing Company) model in which a terrace owner allows a solar developer to install a plant on the roof. The plant is installed, owned and run by the company or investor and the consumer pays for the cheaper power at around Rs 6-7 per unit compared with some Rs 9-10 per unit for conventional supply.

The RESCO model has the potential to bring about a solar rooftop revolution because it can tap into the terraces of owners who don’t have the required capital. RESCO is popular among commercial buildings where business owners prefer to invest in the businesses instead of solar photovoltaic units.

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