Delhi government hopes ‘community solar rooftops’ will lead to a rise in uptake of renewable energy

The National Capital of Delhi’s last solar policy in 2016 had announced a target of around 1,000 megawatts of installed capacity of solar energy from solar rooftop setups, by the end of 2020. However, according to the government, so far, it has achieved a capacity of 230 megawatts of rooftop solar – that’s less than 25% of the target that was supposed to be met three years ago. This is despite incentives offered to consumers and industries as well as the decision to make solar rooftops mandatory for all government buildings with more than 500 square meters of roof space.

Even as the 2016 policy’s 1,000 megawatts target is yet to be achieved, the Delhi government has now brought out a new draft solar policy 2022 which proposes to increase its growth of solar rooftops. The draft policy now targets an installed capacity of solar rooftops to 750 megawatts and adding 5,250 megawatts of utility-scale solar projects from outside Delhi – making it a total of 6,000 megawatts installed solar capacity – in the next three years (by 2025-’26). The policy says that while currently 9% of Delhi’s total annual electricity demand is met through rooftop and utility scale solar, it plans to increase the share of solar energy in annual electricity, to 25% by the end of 2025. The policy aims, by the end of 2025, to have higher solar installed capacity than thermal.

The government has also introduced the concept of community solar rooftops where people who either do not have rooftops, have smaller rooftops or live in apartments and complexes, can come together to install solar panels at one site and share the benefits based on their shared investments. This would be possible through group net-metering or virtual metering.

The government claims, in the policy, that it is aiding domestic consumers to avoid the large upfront cost of setting up rooftop solar by offering a Renewable Energy Service Company model. In this model, a solar developer bears the upfront cost for installing the system at the consumer’s premises and charges a fixed fee. The policy proposes a “hybrid” version of the Renewable Energy Service Company model where it combines the net-metering agreements between the consumers and the distribution companies with the power purchase agreements between the distribution companies and solar developers.

In the policy, the Delhi government also claims it is enabling generation-based incentives for commercial and industrial consumers up to 500 megawatts of first deployment, in addition to the support offered to domestic consumers. It also introduces the facility of free assessment of rooftops by prospective consumers and the creation of a solar card report/solar score that talks about the potential of solar rooftops on that site.

Increasing solar rooftops

Experts working in the sector said that some new elements in the 2022 draft policy are likely to give an impetus to the sector. Binit Das, deputy programme manager (renewable energy) at the Centre for Science and Environment told Mongabay-India that the main hurdles that solar rooftop in cities such as Delhi faces are the higher upfront cost for domestic consumers, delayed disbursement of rooftop solar subsidies and the loss of revenues of distribution companies with the rise of solar consumers in the city. He said that in the national capital, the commercial and industrial players with higher power demands adopted solar power more to reduce their power bills.

“The new policy, however, offers some new solutions like ‘hybrid-Renewable Energy Service Company model’ where the solar developers install solar rooftops on consumers’ rooftop and come into contact with the distribution companies. Here the developer will sell the power to the distribution companies via power purchase agreement rather than the consumer directly, unlike the wait it is in the conventional Renewable Energy Service Company model. Consumers will pay distribution companies and receive net metering benefits on their bill. The distribution companies meanwhile will take a decision on the selection of the developer and choose the tariff too. This will help the distribution companies as well as consumers,” he told Mongabay-India.

He also said that the policy’s proposal of generation-based incentives to residential consumers is more effective and cost saving for the government compared to a one-time subsidy.

Compared to the previous policy of 2016, where the generation-based incentive was Rs 2 per unit of solar energy produced, the latest draft policy has increased it to Rs 3 per unit of solar energy produced for solar rooftops, with a maximum power of 3 kilowatts. Generation based incentives are given to solar consumers based on the generation of solar energy. “Installation of solar plants and generating are different things. In many cases due to low maintenance, many solar plants do not produce solar energy but if they get incentives for each unit of generation, this can encourage many to maintain and maximise generation and increase the overall production of solar energy in the state,” Das added.

In addition to the incentives, the policy also talks about waiving taxes and duties for solar generation.

Other experts said that the concept of “community solar” is somewhat new to Delhi and most of the Indian states and fits well in highly populated urban areas like the national capital where there are higher energy demands. According to data, Delhi has a higher per capita electricity demand than the national average.

Ashwani Ashok, head of clean energy at the Centre for Environment and Energy Development told Mongabay-India the concept of community solar rooftops can cater to the needs of several interested solar consumers who could not opt for solar rooftop systems so far due to the dearth of private open spaces. These consumers include people living in apartments, multi-storeyed buildings or in places with small size roofs or obstructed roofs among others. Ashok said that if executed well, this policy could give an impetus to the overall growth of rooftop solar in Delhi.

Ashok however talked about challenges in the new draft policy. “The growth of solar in Delhi always faced competition with free grid electricity up to 100 units/month for domestic consumers. Such consumers (those using grid electricity) barely took the option of bearing the higher upfront cost of solar rooftops. This policy does not offer very attractive capital incentives proposed by the state. Also, the generation-based incentives are meagre for smaller households and limited for five years only, though the plant would produce electricity for 25 years. Many would not even qualify for getting these incentives. If we want to boost rooftop solar in Delhi, we expect more incentives on capital cost as this is what the majority of the consumers look for,” he said.

He also said that despite being on paper even in the 2016 policy, the Renewable Energy Service Company model failed to attract many domestic consumers as the developers found such models financially not viable for smaller units. The model remained confined to the industrial sector and social sector clean energy projects like Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana, a solar-irrigation project of the federal Indian government.

With limited space, unsuitable for large-scale solar projects, Delhi is focussing on solar rooftops to meet its solar energy demand. The draft policy 2022 notes that the majority of the proposed solar generation (5250 megawatts) would be done through projects outside the state. This means solar energy generated through solar plants could be imported from other states, just as how the state had been importing electricity from other states for several years.

Delhi’s energy transition

In recent research on energy transition in Delhi, the researchers from the LUT University, Finland, found that under the best policy scenario of 100% transition by 2050, Delhi would be deriving most of its power from solar and that would come mostly from the prosumers (those who produce and consume energy), besides the imports from other neighbouring renewable-rich states like Rajasthan and Himachal Pradesh.

Manish Ram, one of the co-authors of the study, told Mongabay-India that owing to the dearth of space in Delhi, large utility-scale solar projects cannot be built there and hence, there is potential for the rise of solar rooftop and its consumers.

According to the government’s 2016 Policy, the capital, with more than 300 days of sunny days, has a total potential of 2,500 megawatts of rooftop solar. This includes the highest 49% potential in domestic buildings, 26% in government offices, and 25% in commercial and industrial units.

“The best available option under such circumstances in Delhi is to use the rooftop available in residential and commercial buildings where you can utilise the potential. Delhi still imports electricity largely from other states and in the future also it is likely to remain a net importer of energy. It can also invest in power plants in Rajasthan, Haryana, and other nearby areas and can have power purchase agreements with them to increase its clean energy mix basket. The cost of clean power production is likely to be lower in renewable-rich states like Rajasthan. Delhi can benefit from power evacuation from such areas,” Ram told Mongabay-India.

This article first appeared on Mongabay.