Kerala achieved an 18% growth in rooftop solar capacity between the second quarter (Q2) of 2022 and Q2 of 2023, with approximately ~276 MW of rooftop solar capacity installed during the period, the Mercom India Rooftop Solar Market Report Q2 2023 revealed.

About half the capacity during the period was added under the Kerala State Electricity Board’s (KSEB) Soura program, which encourages the adoption of residential rooftop solar systems.

One of the unique challenges Kerala faced in its pursuit of solar energy was its geographical landscape. A large share of the land in the state is fertile and for ideal agricultural activities, so leasing it for utility-scale projects is challenging and expensive.

To address this challenge, the state has decided to go with rooftop systems to meet its solar energy targets.

Soura Program and the Initial Challenges

Under Phase 1 of the Soura program, launched in 2019-20, KSEB played a crucial role as a demand aggregator and paid for the total cost of installing the rooftop project to attract more customers. In return for the roof space rented, 10% of the solar power generated was offered free to the consumers. KSEB also took on the complete operational and maintenance responsibility for a 25-year period, which would later be transferred to bidders.

The Soura Phase 1 program was approved by the Ministry of New and Renewable Energy (MNRE), and the capacity of 100 MW was divided into two segments. Half of this capacity was with subsidy and the other half without.

Initially, Phase 1 took off well, with 24 MW installed under the non-subsidy program. However, the COVID-19 pandemic and other issues hindered the execution of the 2019-20 subsidy program, resulting in only 1.951 MW being installed. This led to the unutilized capacity being relinquished to MNRE. The program was ended in November 2021.

“KSEB Soura phase 1 program was not as successful as phase 2. The program was announced as a KSEB-financed rooftop solar system without any investment from the consumer side—a good number of consumers registered without understanding the terms and conditions. The program was designed so that in return for the roof space rented for the KSEB system, 10% of the power generated would be offered to the consumer. However, as most roof spaces could only accommodate systems below 5 kW, leading to the drop in public interest,” a local rooftop installer said.

The Phase 2 Success Story

Launched in November 2020, Phase 2 of the Soura program has helped boost the rooftop installations in the state by adding 127.5 MW as of June 2023. KSEB took the lead by installing 122.17 MW, while the Agency for New and Renewable Energy Research and Technology (ANERT) added another 5.33 MW under this phase.

The Soura program, including both phases, has contributed to about 153.5 MW of rooftop solar installations in the state.

Responding to a request from the KSEB, the MNRE granted a six-month extension to Phase 2. This extension allowed time until September 2023 for project completion, with consumers receiving subsidies based on the revised benchmark cost. This put the program on track to meet the current solar installation target of 200 MW.

Pricing interventions

KSEB’s strategic pricing interventions played a crucial role in shaping the solar market in Kerala. 2018, when the Soura program was introduced, the installation cost stood at ₹80,000 (~$960)/kW, falling from ₹60,000 (~$720)/kW to ₹50,000 (~$600)/kW for the consecutive year.

As a KSEB official pointed out, the state distribution company’s correction of market rates made solar energy far more accessible for consumers. He said, “Installers were adding extra charges, taking advantage of the fact that the general public was unaware of the pricing for solar projects. To rectify this situation, KSEB compiled and published a comprehensive price list for rooftop solar projects, making it accessible to the public. This proactive step prompted installers to review and align their prices accordingly.”

“The Soura program witnessed an impressive 300,000+ registrations. KSEB’s proactive approach was evident as the staff inspected and evaluated each applicant’s premises. This hands-on engagement streamlined the application process and ignited a massive renewable energy awareness campaign throughout Kerala. This concerted effort laid the foundation for the exponential growth experienced by the state in the renewable energy sector in the subsequent year,” the official stated.

Solar City Project

Another project contributing to rooftop solar installations in Kerala is the Solar City Project.

“With the Thiruvananthapuram district named a solar city, 20+ rooftop solar tenders amounting to about 14.7 MW were floated. Work orders were issued from January 2023. Installations reached around 2.02 MW by the end of June 2023, of which about 372 kW were commissioned,” the KSEB official said.

ANERT has identified buildings for another 2 MW installations, which will be tendered shortly. The current target is to commission 16 MW by March 2024 on government buildings.

“Our next target will be commercial and residential rooftops to achieve the mandates for a solar city. The ongoing KSEB Soura and ANERT Soura Thejus rooftop solar subsidy programs, already target the residential segment. Cumulatively, about 5.33 MW of rooftop solar has been installed under the Soura Thejus program as of June 2023,” an ANERT official said.

The distributed solar generation under the Soura program has effectively mitigated energy losses by eliminating power transmission needs.

C&I Segment and Other Predicaments

While Kerala has made substantial strides in residential rooftop solar programs, it has lagged in the commercial and industrial (C&I) sector. According to the KSEB official, initial attempts to install rooftop solar through a financing model with a 25-year agreement with KSEB saw minimal interest from businesses.

The official explained that C&I entities view solar adoption as an investment. They were initially hesitant due to uncertainty about the return on investment. However, the success of the residential segment has instilled confidence in these businesses about the viability of transitioning to solar.

While the residential projects have progressed chiefly smoothly, there were some glitches. One developer noted, “As KSEB issued tenders under the Soura program, there was an unusual rise in component prices. This made it difficult for installers to complete projects at the empanelled cost. Also, some inverter and module brands that were available at the initial stages of the project ceased supplies and after-sales services in between the program. The DISCOM should have empanelled the component suppliers to monitor the price stability and availability of the components and the after-sales service for the project’s lifetime.”

The developer also noted that the KSEB grid infrastructure needs to be updated, as the current transformer capacities may not be sufficient.

Aimed at the C&I segment, the KSEB has invited bids to empanel solar developers to set up 100 MW of grid-connected rooftop and ground-mounted solar projects.

Primarily an agricultural state with a high population density, the state has serious limitations to installing large-scale hydropower, wind, or solar projects. The state has been devising innovative ways of generating clean energy, which could be a model for other states with similar geographical limitations.