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					</table>As the cost of technology and installations have come down over the years, rooftop solar has undoubtedly emerged as a viable option to cut electricity bills for Commercial and Industrial (C&amp;I) consumers.
However, smaller C&amp;I entities must fully understand the extent of savings and the cash outgo toward loan repayment on the installation to make informed decisions.
Installation Costs and Savings, Loan Repayment Window 
Consumers must assess their capacity requirement based on the operations, then choose developers with experience installing rooftop solar systems.
A typical 200 kW system requires an investment on average of about ₹8.5 million (~$103,681), which can vary based on regional factors. Lenders usually calculate the monthly loan installments based on the customers&#8217; electricity bill savings.
The monthly installments against the loan are designed to ensure the businesses don&#8217;t have to divert their cash flow meant for core operations.
For instance, about four years ago, Shantilal of Cotseeds Corporation in Hubli installed a 450 kW rooftop solar system at a cost of ₹27.5 million ($335,117).
&#8220;Since cotton production is power intensive, we have reaped immense benefits from the rooftop system in our Hubli production unit. The loan repayment installments were equivalent to the savings on power bills. I am already free from the loan while we consume all the energy produced from the system here.&#8221;
However, Shantilal said the solar system was more rewarding when the Hubli power distribution company purchased the excess energy produced from the rooftop system at ₹5.6 (~$0.068)/kWh, which has now come down to ₹2.6 (~$0.031)/kWh.
He added that low prices affected the overall business and took away the attraction of supplying excess energy to the grid.
Below is a chart representing the savings realized from a 100 kW rooftop solar project on a monthly and annual basis and over the project’s lifetime (25 years).
<img loading="lazy" decoding="async" class="aligncenter wp-image-54711 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/05/Rooftop-solar-savings-chart-CI.png" alt="Rooftop solar savings chart C&amp;I" width="587" height="491" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/05/Rooftop-solar-savings-chart-CI.png 587w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/05/Rooftop-solar-savings-chart-CI-300x251.png 300w" sizes="(max-width: 587px) 100vw, 587px" />
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Loan Repayment
Co-founder and COO of <a href="https://www.orbenergy.com/" target="_blank" rel="noopener">Orb Energy</a> N.P. Ramesh said, &#8220;The amount invested in installing solar usually pays for itself in approximately 3-3.5 years for the C&amp;I segment, effectively making electricity free after this period. The savings over 25 years after considering all costs would translate to approximately ₹44 million (~$534,902) for a 100-kW rooftop solar system.&#8221;
Orb&#8217;s customers in Karnataka who have installed over 1 MW and up to 2.5 MW of rooftop solar systems typically save ₹5 million (~$60,804)-₹36 million (~$437,802) annually.
Orb commissioned a 2.5 MW rooftop solar system for Sipani Fibres, a Bengaluru-based manufacturer of woven fabrics and sacks, in 2018. The fabric maker has already realized the investment made on the system in less than three years and is saving around ₹35 million (~$425,692) on annual energy bills.
However, the upfront cost for small C&amp;I entities remains one of the biggest hurdles in adopting solar. The consumers must first assess their capacity requirement based on the operations, then choose developers with experience installing rooftop solar systems. For instance, the current loan repayment time provided by the financing institutions in India for industrial consumers is 5-7 years, and it is lower for commercial customers who wish to install rooftop solar.
For C&amp;I customers, an accelerated depreciation benefit of 40% per annum serves as a subsidy as it helps the customers in their decisions while buying, said Ramesh.
Industry insiders said that most small and medium businesses are used to paying electricity bills monthly, and rooftop is not their priority.
Another developer told Mercom, &#8220;Given that installing a rooftop solar system is an upfront capital cost, the consumers paying monthly electricity bills must plan the investment. From the time required by the customer to make this investment to the arrangement of the money to match their spending bandwidth, there are several issues the Indian rooftop solar segment is reeling under.&#8221;
Rooftop solar allows consumers to install small systems and consume the power generated on-site. The Parliamentary Standing Committee on Energy report recently <a href="https://www.mercomindia.com/india-missed-2022-renewables-target" target="_blank" rel="noopener">isolated</a> underwhelming progress on rooftop solar and wind energy projects as the primary reason India fell short of achieving its renewable energy capacity target of 175 GW by 2022.
Tax Savings
Vikas Agarwal, the co-founder of non-banking financial company Credit Fair <a href="https://www.mercomindia.com/msmes-solar-savings-power-bills-cover-emi-cost-interview" target="_blank" rel="noopener">told</a> Mercom in an interview, “We have found that medium enterprises with turnover above ₹500 million (~$6 million) usually know the benefits of bringing solar into their energy mix. But smaller units are reluctant about the upfront investment. However, installers and financial companies like us have a substantial role in convincing these businesses to adopt solar.”
Further, the government has allowed C&amp;I entities to claim 40% accelerated depreciation of the fixed assets associated with a rooftop solar system, a significant tax benefit.
For other assets, depreciation is usually spread out throughout the life of the asset. Hence, the yearly deduction is low, but in the case of rooftop solar, C&amp;I entities can avail of a large reduction in applicable tax in the first year itself.
Mercom India will host the C&amp;I Clean Energy Meet in Pune on June 23. Interested entities can register for upcoming events by sending an email to <a href="mailto:events@mercomindia.com" target="_blank" rel="noopener">events@mercomindia.com</a>.
To find out more about the upcoming events, click <a href="https://www.mercomindia.com/event" target="_blank" rel="noopener">here</a>.
Contact us by filling out this <a href="https://www.mercomindia.com/lead-generation-form" target="_blank" rel="noopener">form</a> if you are planning to install a rooftop solar system for your C&amp;I units.

Savings from Rooftop Solar Can be a Healthy Revenue Stream for C&I Entities

India has installed over <a href="https://mercomindia.com/india-25-gw-solar-capacity-installed/" target="_blank" rel="noopener">25 GW</a>  of solar to date. Out of the installed capacity, rooftop solar accounts for just over <a href="https://mercomindia.com/product/mercoms-india-solar-market-share-report-1h-2018/" target="_blank" rel="noopener">2.5 GW</a>. The residential segment accounts for just one fifth of the rooftop capacity and compared to large-scale solar, rooftop installations are still well behind. Solar kits introduced into the market by several companies are beginning to make inroads into the rooftop solar sector in India.
Rooftop solar kits have the potential to transform the growth trajectory and acceptance levels of rooftop solar systems in Indian homes due to the numerous benefits they offers to the consumers. So far in India, the commercial and industrial (C&amp;I) sector has accounted for majority of rooftop solar PV installations.
Other than the upfront costs and <a href="https://mercomindia.com/rooftop-subsidy-delays-india/" target="_blank" rel="noopener">subsidy payment delays</a> an easy installation process and worry-free maintenance are key for residential rooftop customers.
A typical rooftop solar installation requires licenses and permits from various government agencies which many consumers do not want to deal with. Unavailability of qualified installers operating at this scale and the associated risk involved makes putting up a rooftop solar system on the roof a daunting task for residential consumers.
Talking to Mercom, Sachin Bhalla, the vice president of solar solutions provider <a href="https://www.luminousindia.com/" target="_blank" rel="noopener">Luminous</a> said, “We have come out with innovative solutions to attract the residential consumers. Earlier, the consumer did not have the freedom to install the entire system on his own in his residence, now we are providing the consumer with that choice. We are providing solar kit solutions in the range of 2 kW to 10 kW. These will cover all sorts of houses with their varied power demands.”
“With this, the consumer is getting the entire rooftop solar PV system at his doorstep without running to DISCOM, EPC, distributor, retailer and so on, there is less hassle. Now, we also provide with our solution a 5-year unquestioned insurance of the kit solution. Regardless of the cause of wear and tear, we will replace the module or any other damaged parts. The consumer does not have to bother about servicing. Our pricing is also competitive as we are providing the entire solution set, so we can cut down costs and yet ensure the best quality,” added Sachin.
Talking to Mercom about the potential of rooftop solar kits, Rahul Mishra, CEO at <a href="http://www.raysfutureenergy.com/" target="_blank" rel="noopener">Rays Future Energy</a>, another solar solutions provider said, “We have kit solutions in the range of 2 kW to 10 kW. Earlier, this wasn’t available, and there weren’t a variety of capacities to choose from. Now, we can cater to each type of demand. We have the physical presence, servicing, and competitive pricing. All these will contribute towards acceptability and adoption of rooftop solar PV in Indian homes. Even in tier 2 cities, this will help as they have huge number of homes with large rooftop areas. And the cost is less when you take the entire solution from one provider.”
To cater to different solar power needs of customers, Luminous offers two kits that are essentially off grid systems and on grid GTI systems. Off grid systems are the combination of solar panels, inverter and battery which basically cater to the power back up need of the consumer. The electricity generated from the panels are stored in the battery and can be used as power back up during the time of electricity cut. These systems are useful in areas where there are more power cuts and the electricity or grid supply is not constant. The system range varies from 1 kW to 10 kW.
On grid (GTI) systems consists of a Grid Tie Inverter (GTI) connected to solar panels and is used for savings needs of the consumer. On grid systems do not come with batteries and are used when the core objective is savings and there is no power back up requirement. It is useful in areas where there are fewer electricity cuts. The electricity produced using this system is sent back to the grid which in return reduces electricity bills, and hence results in savings. The system capacity ranges from 1 kW to 50 kW.
Recently, Tata Power Solar also launched a complete residential rooftop solution in Ajmer. The residential rooftop solutions are expected to save up to ₹50,000 (~$680) annually for 25 years. Ashish Khanna, the president of Tata Power (Renewables), told Mercom, “It is our endeavor to provide knowledge of commercial benefits as well as quality aspects of solar rooftop installations to our residential consumers. We are hopeful that with initiatives like these, wherein we not only offer cost-effective green energy, but also help consumer in energy conservation, will achieve our company’s objective of ‘Lighting up Lives’.”
Complete kit solutions with battery backup for a 2 kW system can cost in the range of ₹200,000 (~$2,721), according to the pricing data available for solar kit solutions. This also includes servicing of the systems. Almost all the companies that have products in this range are enthusiastic that consumers are more accepting of these solar kits. They are easy to install, and the cost incurred initially is comparatively less as these are integrated systems. The second point that makes these kits more popular is the servicing being provided by firms.
Are solar kits the answer for a slow growing residential solar rooftop solar market? We have to wait and see.

Can Solar Kits Propel the Growth of Residential Rooftop Market in India?

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