Installing rooftop solar photovoltaic (PV) systems for residential consumers will become more affordable in Uttar Pradesh.

An official at the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) told Mercom, “A subsidy of ₹15,000 (~$237)/kW for the development of rooftop solar projects in the state will be provided to residential consumers. If a single project is 3 kW, the subsidy provided would be capped at ₹30,000 (~$474) for the entire project.”

The UPNEDA official further added that this subsidy will be in addition to the 30 percent central financial assistance (CFA) provided by the Ministry of New and Renewable Energy (MNRE).

This move is expected to boost rooftop solar installations in the state. According to MNRE, Uttar Pradesh had cumulative rooftop solar installations of 55 MW through October 2017.

In January 2018, Mercom had reported the state government’s plans to subsidize rooftop solar installations in an effort promote solar installations in the state.

In December 2017, the state’s cabinet of ministers had approved its Draft Solar Policy 2017 and given it a retroactive effective date of November 6, 2017. The policy laid out a number of things that the state must do to promote the adoption of renewable energy.

Recently, the Himachal Pradesh state government also decided to provide a state subsidy of 10 percent of the cost (₹4,000/kW) to residential consumers installing rooftop solar. This subsidy is in addition to CFA being provided by Government of India for the installation of rooftop solar.

In December 2017,  Mercom also reported that the Ministry of New and Renewable Energy (MNRE) had released a proposal to overhaul the existing rooftop solar implementation mechanism by turning it over to distribution companies (DISCOMs). Under the proposal, 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.

“Residential rooftop has struggled in India due to high upfront costs and lack of viable financing options to overcome this issue. Subsidy announcements may sound attractive to consumers, but most installers do not want to deal with these projects due to delayed or non-payment of subsidies by government agencies,” said Raj Prabhu, CEO of Mercom capital group. Unless government agencies promptly make payments on time to installers these new programs may not take off as expected.