The President of India has approved the launch of the second phase of grid-connected rooftop solar photovoltaic (PV) program in India. The program aims to help achieve the target of 40 GW of rooftop solar PV capacity by 2022. Under phase-II, 38 GW of grid-connected rooftop solar PV capacity is expected to be installed. The central government will provide ₹118.14 billion (~$1.66 billion) as central financial assistance (CFA) for capacity building, service charges, and incentives to distribution companies (DISCOMs).

Phase-II consists of two components:

• Component A in which 4 GW of grid-connected rooftop solar PV projects will be developed in the residential sector with CFA
• Component B through which incentives will be provided to DISCOMs

For component B, the incentive will be based on additional grid-connected rooftop solar PV capacity installed over and above the base level. Incentives will be limited for the first 18 GW of grid-connected rooftop solar PV projects.

The launch of phase-II of the program took a while in the making. In December 2017, MNRE had released a new proposal to overhaul the existing rooftop solar implementation mechanism by making it the responsibility of DISCOMs. Then MNRE had proposed that the DISCOMs would be eligible to receive financial assistance to the tune of ₹234.5 billion (~$3.66 billion) based on their performance in facilitating rooftop solar deployment.

In February 2019, the Cabinet Committee on Economic Affairs (CCEA) provided its approval for the second phase of grid-connected rooftop solar PV program with CFA to the tune of ₹118.14 billion (~$1.66 billion).

For the 4 GW of grid-connected rooftop solar PV capacity to be developed under component A, a CFA of ₹66 billion (~$0.94 billion) is proposed. Total CFA of ₹49.50 billion (~$0.71 billion) has been allocated to be given an incentive to DISCOMs, ₹6.6 million (~$0.094 million) has been allocated as CFA to be given as capacity building charge, and ₹1.98 billion (~$0.028 billion) has been allocated as CFA to be given as service charge.

Recently, Mercom reported that in total, the government released around ₹35 billion ($505 million) in CFA for renewable energy projects across India during 2018-19 (until February 5, 2019). Approximately ₹23 billion ($327 million) was released to the Ministry of New and Renewable Energy (MNRE). The top three CFA recipients of the year were: Gujarat – ₹2.8 billion ($39 million), Andhra Pradesh – ₹1.3 billion ($18 million) and Telangana – ₹989 million ($14 million).