Though distribution companies (DISCOMs) can take the help of state nodal agencies (SNAs) for implementing the second phase of the rooftop solar (RTS) program, they have to be at the forefront of its implementation process.
This is the crux of the latest suggestions from the Ministry of New and Renewable Energy (MNRE), which also said that the maximum time required for the entire process of rooftop solar installation should be between 2.5-5 months after the consumer submits his request.
Last year, the Cabinet Committee on Economic Affairs (CCEA) gave its approval for the second phase of grid-connected rooftop solar program with central financial support to the tune of ₹118.14 billion (~$1.66 billion) to achieve a cumulative capacity of 40 GW projects by the year 2022. The central financial assistance (CFA) for the residential sector has been restructured in the phase-II of the rooftop solar program.
The present clarifications and suggestions by the MNRE have been made in response to the feedback received from the stakeholders and the public.
The ministry has clarified that DISCOMs will be responsible for developing a dedicated online portal where a consumer can apply, and all the approvals can be given in time with transparency. They would also be responsible for its integration with the of the MNRE. Earlier, such a portal was available with most state nodal agencies. DISCOMs can create a separate portal or adopt the existing portal of these agencies with required modifications. As all the financial approvals are processed with data available on the SPIN portal, DISCOMs have been directed to develop the portal and link it with SPIN immediately. Technical assistance is already being provided to the DISCOMs for this purpose, the ministry has said in its clarification. The notice adds that the ministry will not sanction any capacity and release any funds to DISCOMs without the portal.
DISCOMs are also expected to carry out consumer awareness and publicity drive for the success of the program.
In September 2019, the MNRE in its official memorandum had stated that the subsidy under Phase-II of the grid-connected program would be available to all eligible households for installation of rooftop solar as per the regulations of the respective state electricity regulatory commissions and provisions of program implementation guidelines.
In the suggestive operative procedure, it was indicated that the consumer should pay the balance of subsidy amount to the empaneled vendor after signing of the metering agreement.
Based on the feedback received, the ministry suggested that the consumer may pay 50 % of the balance subsidy amount to the DISCOM and the remaining 50% after the commissioning of the system. DISCOM can pay the full amount to the empaneled vendor after the inspection of the rooftop system. “This arrangement is suggested to safeguard the interest of the consumers,” stated the MNRE.
It has also been suggested that while making a proposal or a petition to the state electricity regulatory commissions (SERC) for fixing the feed-in-tariff under gross metering regulation, the proposed tariff should be such that the consumer can get an annual return of around 16% so that the capital cost is recovered within four to five years.
The reason laid out is that the initiative will motivate the consumers to go for rooftop solar. Also, DISCOMs will be benefitted by getting renewable energy at reasonable rates, which, in turn, will help in fulfilling their renewable energy purchase obligations (RPOs).
Further, the MNRE has clarified that no vendor or agency should be empaneled without the consent of providing the services at the lowest bid (L1) rates. Similarly, no vendor or agency should be given the liberty to charge more than the L1 rate in the name of better quality, as the quality standard must have been provided in the bidding documents in line with the MNRE guidelines.
The ministry has also highlighted some innovative business practices adopted by DISCOMs in the implementation of the program.
Chandigarh Electricity Department has planned a RESCO model for the residential segment by aggregating the demand for high power-consuming residential households. The plan is to target ‘High Power Consuming Residential Consumers’ (2,000-2,500 in number) in residential areas of Chandigarh with 5-10 kW capacity each, and consumers will get solar electricity at the rate of ₹3.30 (~$0.05)/kWh for 15 years. After the completion of 15 years, the system will be transferred to the consumers. During the first 15 years, the consumer will also get free maintenance and capital cost-free rooftop solar system.
RESCO developer will get money for the electricity generated from the DISCOM at the discovered rate, which will be ₹3.37 (~$0.047)/kWh or less.
Meanwhile, the DISCOM will get the benefit of cheaper power during peak demand for office hours in the summer season and renewable purchase obligation (RPO) benefit.
While in Andhra Pradesh, DISCOMs have tied up with the Andhra Bank to provide loans for low power consuming residential segment with monthly consumption of 100-150 kWh with a target of 1 kW capacity each.
As a pilot project, 600 consumers from the city of Vishakhapatnam were registered. Out of the total, 250 consumers have been approved for the loan, and 200 systems of 1 kW have been installed.
For the consumers, the saving in the electricity bill will be paid in EMIs to the bank through the DISCOM.
In New Delhi, group net metering and virtual net metering have been adopted.
Virtual net metering is applicable for residential consumers, group housing societies, government offices, local authorities, and renewable energy generators registered under Mukhya Mantri Kisaan Aay Badhotari Yojna. Here, more than one consumers have a share in the rooftop solar system at one location, and the power generated and injected in the grid through that plant is adjusted in the bills of more than one consumer as per their share in the rooftop solar system.
There is a possibility that an individual has more than one electricity connection at two different buildings in the same area or another area. In such a situation, one can install a rooftop solar system at one place and enjoy the benefit of the solar power generation in the other place in the same DISCOM area. This concept is group net metering.
The ministry also highlighted the innovative rent a roof model in Kerala. Residential consumers avoid capital investment in a rooftop solar system due to fear of return, maintenance, and the time period required for the return of the capital investment. Addressing this, Kerala State Electricity Board, after a demand aggregation and survey of its consumers, has come out with rent a roof model. Under this, the state DISCOM hires the roof of the owner of the building, and the consumer can enjoy 10-50% credit for the power generated and also get 25 years of maintenance. The DISCOM also gets the RPO benefit.
“These are just ‘suggestions’ which means there is no way to enforce any of this. DISCOMs continue to be the biggest impediment when it comes to rooftop solar installations and do not want to lose paying customers,” said Raj Prabhu, CEO of Mercom Capital Group.
In August 2019, it was reported that the MNRE issued operational guidelines to implement the second phase of its grid-connected rooftop solar photovoltaic (PV) program. Overall, 22 GW of rooftop solar PV projects are to be set up under the second phase of this program.
The target of the program is to install 38 GW of rooftop solar by 2022, of which 4 GW will be in the residential sector and 34 GW under other sectors such as governments, commercial, industrial, and educational.
Meanwhile, recently the MNRE issued a clarification for the second phase of its rooftop solar program under which distribution companies—or its authorized agencies will invite Expressions of Interest (EoI) for empaneling the agencies to supply, install, test, and commission rooftop solar systems in residential premises. The ministry also clarified that all the bidders within the L1 price bracket will be empaneled and will provide services to the consumers at the lowest agreed tariff rate.
Image credit: Sunsenz Solar Kerela
Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.