MNRE Clarifies Lowest Tariff Provision in its Rooftop Solar Program

The Ministry of New and Renewable Energy (MNRE) has 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.

However, to ensure the quality and post-installation services, only manufacturers of solar panels and system integrators who fulfill the pre-determined technical and financial criteria would be eligible to participate in the bidding process.

The ministry has now clarified that all the bidders within the lowest bid (L1) price bracket will be empaneled and will provide services to the consumers at the lowest agreed tariff rate.

For all other bidders, the price should not exceed L1 plus X% of L1. And, if the total number of empaneled agencies is less than five within the acceptable band, then the distribution companies may also include those agencies who fall within the price bracket of L1+(X+5)% of L1 if they agree to match the lowest tariff. Here, “X” has to be defined by the agency and clearly stated in the EoI. The ministry has added that the value of X should not exceed 25.


Therefore, all the empaneled bidders will match the L1 rate; the ministry has clarified.

Further, the ministry has said that for group housing societies or residential welfare associations, the central financial assistance will be limited to 20%. However, the capacity eligible for the CFA for the group housing societies or residential welfare associations will be limited to 10 kW with a maximum total capacity of up to 500 kW, inclusive of the rooftop solar project already installed on the individual houses in the group housing societies or residential welfare associations.

In September 2019, Mercom reported that 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.

Subsidy Phase II of Grid Connected Rooftop Solar Program

In July 2019, MNRE notified new benchmark costs for grid-connected rooftop solar power projects for the financial year (FY) 2019-20. For projects with a capacity of above 1 kW and up to 10 kW, the benchmark cost was set at ₹54 (~$0.79)/W.

In August 2019, the MNRE issued operational guidelines to implement the second phase of its grid-connected rooftop solar program. Overall, 22 GW of rooftop solar PV projects is 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.

Image credit: EY418 – Own work, CC BY-SA [4.0]