India’s renewable energy targets are ambitious, but achievable if we can identify barriers and help overcome them through consumer-centric approach
Jaipur is a city in the desert state of Rajasthan and is abundant with sunlight. Mr Toshniwal*, a city resident, is excited about adopting rooftop solar photovoltaic (PV) for his house and potentially save on his electricity bills. He even persuaded other members from his housing society to consider installing solar PVs for their homes. But as soon as they approached the bank for a loan, they faced disappointment and returned empty handed. The cost of solar PV installation was only a few lakhs but the bank required them to pledge their homes, which worth in crores, against the loan. Despite India’s capacity to potentially harness rooftop solar and mandate its banks to promote the same, several problems remain.
India’s ambitious 175 gigawatt (GW) of renewable energy target includes 100 GW of solar by 2022. Of this, 40 GW is to come from rooftop installations around the country. While commercial and industrial (C&I) consumers have been making significant strides towards achieving this target by making up for 1,632 megawatt (MW), the remaining consumer categories continue to face challenges. This means that in the next four years the sector needs to add roughly 37.5 GW of rooftop solar PV. This is a tall target, even if the overall sector has grown at a compound rate of 117 per cent over 2013-17, (BNEF, 2018). To meet such massive targets, India must mobilise and grow the residential rooftop solar PV segment, so that we can achieve the targets.
Over the past few years, the falling prices of solar and availability of finance for rooftop solar have been key to the increased installation among the C&I sector. However, this has not had the same effect on the residential customers in India. To understand what will spur the growth of residential rooftop solar installations we must revisit the policies and programmes with the lens of residential consumers. Despite the significant number of initiatives from the national and state governments, residential consumers are by and large, still not excited about large scale adoption of solar on their rooftop PV.
We surveyed residential consumers across five cities to understand their concerns with the adoption of rooftop solar PV, and identified three key issues that need to be addressed. First, is a need for clear, credible and objective information about rooftop solar PV that can be accessed by consumers. Basic information like how much rooftop area is required to generate a unit of electricity, who will provide after sales service, what is covered by warranty and what isn’t, how does one obtain net or gross metering benefits, how much time it takes to install a rooftop solar PV system and so on. Presently, there is no single credible source of such information that is independent or reliable for consumers.
Second, banks that offer finance for installation of rooftop solar PV systems often demand disproportionate collateral security, perhaps because of the absence of resale value of the systems. Some ask consumers for the title deeds of their homes, which is several times the cost of the solar PV system, as Mr Toshniwal’s neighbours discovered. Consumers have also complained about the tough terms and conditions — which work as deterrents for the consumers, who are looking for some finance to help reduce their capital costs for installation. Third, despite best efforts at single window approvals and so on, multiple permissions and approvals are needed to obtain net or gross metering benefits. Consumers who have installed solar PV systems on their roofs complain of having to make multiple visits for getting the necessary approvals and arranging for inspections to certify completion of work – which is both tedious and time consuming. Some in-depth case studies, which we looked at revealed that this tedious process is the number one deterrent in adoption.
India’s renewable energy targets are ambitious, but achievable if we can identify barriers and help overcome them through consumer-centric approach. Our study confirms that while policies and regulations have been developed for faster adoption of solar, they do not adequately consider issues faced by consumers or take into account the consumer experience. Consequently, the results among residential consumers have remained sub-optimal.
For residential rooftop solar to become a norm, India most importantly needs to ensure clarity of information, awareness, and ease of accessing finance for the installation. Without a consumer centric plan, rooftop solar will face challenges to see the light of the day.
Tirthankar Mandal of WRI’s Energy Program also contributed to this piece
Note:*Not his real name
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About Bharath Jairaj
Bharath Jairaj is the Energy Director at WRI India and works with the Energy Program and the Governance Center. He co-leads the global Electricity Governance Initiative that seeks to strengthen governance of the electricity sector.