Residential rooftop solar installations have been growing in popularity due to the ease of installations and the savings they provide to homeowners.
According to Mercom’s latest report, India Rooftop Solar Market Report Q2 2021, 521 MW of rooftop solar was installed in the country, of which 53% was residential installations (276 MW). Though Gujarat has been leading in residential rooftop solar installations, Karnataka also figures in the list of top 10 states.
The government aims to install 4 GW of residential rooftop solar capacity by 2022, providing Central Financial Assistance (CFA) or subsidy. Under this program, distribution companies (DISCOMs) in Karnataka aim to install 72 MW – Bangalore Electricity Supply Company (BESCOM) – 30 MW, Hubli Electricity Supply Company (20 MW), Gulbarga Electricity Supply Company (10 MW), Chamundeshwari Electricity Supply Corporation (10 MW) and Mangalore Electricity Supply Company (2 MW).
To execute this program, the DISCOMs empanel installers through competitive bidding. All those homeowners who wish to claim subsidies have to ensure the empaneled partners handle the installations. DISCOMs maintain a list of these empanelled or channel partners. For these installations, it is mandated that only solar modules made in India are used. The highest cost (benchmark cost) that these empaneled installers have quoted for rooftop solar installations under BESCOM jurisdiction is given in the table below. The subsidies are calculated on this cost.
In the absence of DISCOMs empanelling installers, the MNRE benchmark cost released for the year is adopted.
The consumers are responsible for the cost of the system, excluding the subsidy from MNRE if they choose to go with the empanelled installers with locally sourced solar modules.
Consumers can also choose the installers and technology of their choice if they are not keen on claiming the subsidy. The cost of a rooftop solar system varies based on the technology chosen to enhance power generation efficiency. Better the technology, the higher the cost of the system.
Price range – a result of varied technologies
According to rooftop installers, the cost for a 1 kW rooftop system varies depending on the technology used and factors like the site location, logistics, the type of solar modules, and inverters. An advanced technology module will cost more, adding to the overall cost of the rooftop solar system.
The demand for rooftop solar has been growing in Karnataka. Installers believe it will only get better in the near future.
Speaking to Mercom, Dhwani Sunku, Manager, Sales & Marketing, U-Solar Clean Energy, said, “The cost of rooftop solar systems differ from state to state based on the processes. The DISCOMs charge higher application and facilitation fees for empanelment, to restrict the number of installers who apply.”
“The price of a rooftop system entirely depends on the technology used. If we use 380 W modules and string inverters, the price will be around ₹35,000 (~$476) for a 1 kW system, and for 450 W modules and enphase inverters (microinverters), it goes up to about ₹85,000 (~$1,156). When microinverters are used, which optimize the output for each module, the cost is generally above the benchmark cost,” Dhwani said.
“Ideally, the Ministry of New and Renewable Energy should have benchmark costs for each technology. But instead, they have issued one benchmark cost, which is not practical. The use of galvanized aluminum for the systems also reduces the cost, whereas mild steel has extended longevity. But then the price goes up,” according to Dhwani.
Net metering facility
The government’s decision to permit net metering for loads up to 500 kW has also been received well by stakeholders. Under net metering, the exported solar power is adjusted in the electricity bill against the energy consumed and is beneficial for a consumer. Mercom has covered the financial advantage of a net metering facility.
“Providing net metering up to 500 kW is a good move, and it will help the DISCOMs. We should also look at removing gross metering for the third party. Also, many apartments in Bangalore are going solar, and we have to redirect everything to one meter, which is very difficult for large housing societies. They should have different meters for each block, and that will improve the overall process of installation,” Dhwani explained.
Initially, the Karnataka Electricity Regulatory Commission had proposed allowing net metering for rooftop solar projects between 1 kW and 10 kW and gross metering for capacity over 10 kW. But later, it allowed net metering for systems up to 500 kW.
Advanced technology modules and microinverters
According to Gururaj BR, Vice President, IT, Orb Energy, “The cost of systems vary due to the site conditions and other state-specific reasons. At some sites, we have flat roofs, and at others, we have inclined roofs. This impacts the project’s overall cost. It is easier to install a system on an inclined roof. In Karnataka, we also have to coordinate with the DISCOMs to synchronize the system, so the price is comparatively higher. Right now, the lowest cost for a 1 kW system is around (~$476)/kW, and it can go up to ₹55,000 (~$748)/kW depending on the site location and the technology used for the system. The price will be higher if we use enphase inverters with 450 W modules and a weather monitoring system. In some cases, we also do the synchronization, which pushes the cost further up.”
“As of now, the rooftop systems are doing well in Karnataka, especially the residential segment. The government has to focus on the business angle. It is helpful for everyone in the long run if the customers’ demands are met. The decision to allow net metering for loads up to 500 kW is a step in that direction,” he said.
Karnataka is on the cusp of rooftop boom, but challenges remain
Earlier this year, Karnataka Renewable Energy Development Limited issued the ‘Draft Karnataka Renewable Energy Policy 2021-2026’ to develop 20 GW of renewable energy projects; of this, 2 GW will be rooftop solar.
An executive at a rooftop solar installer commented, “Only Karnataka has the policy where all the models of inverters used for rooftop solar systems should be empaneled with BESCOM.” This has added another layer of procedural work that the stakeholders feel is unreasonable, extensive, and expensive.
“The benchmark cost is only for string inverters, not microinverters, which is an upgraded version. There is indeed a price variation in each state. It may be because of the state subsidies and other state-specific reasons. In Gujarat, the price for a 1 kW system is much lower than anywhere in India. The price is somewhere around ₹29,000 (~$395)/kW. Currently, the price in Karnataka for a 1 kW system varies from (~$476) (price/kW for capacity around 1 MW) to ₹105,000 (~$1,415)/kW (for projects with micro inverters). For a 1 kW system (projects with string inverters), the price comes to around ₹90,000/kW).”
Karnataka has set an example for the successful implementation of mandatory solar water heaters at residences. The model set by the state has been recommended to be followed by others. The state has an opportunity to set a similar example with residential rooftop solar installations.
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.