Rooftop Solar Policy And Regulation: An Impediment Or Catalyst in Rooftop Solar Installation?
In 2015, India increased its target for renewable energy to 175 GW, out of which 40GW was assigned to the Rooftop Solar PV segment. Unfortunately, the rooftop solar sector has witnessed sluggish growth, with total installations reaching only about 6 GW as of June 2020.
The slow growth in the RTS segment is due to various reasons such as:
➭Regulatory hurdles
➭ Lack of uniform regulations and mandatory notifications/state policies
➭ High cost of financing
➭ Reluctance from DISCOMs to provide approvals
➭ Multiple approvals from multiple stakeholders
➭ Availability of net meters
➭ No single window clearance, etc.
The major challenge lies in the variations in net-metering regulations and sometimes between DISCOMs in the same state.
The second major challenge is frequent change in rooftop solar policy and regulation by states. For example, in November 2019, Maharashtra Regulator published Draft Regulations in which it proposed to allow net-metering only for residential consumers of less than 10kW capacity. In the final regulations published, it reversed its position and allowed net-metering to all categories of consumers but proposed Grid Support Charges (GSC) for such net-metering systems.
Third major issue is with the definition of third party owned systems, popularly known as Opex or RESCO models. While Gujarat has not allowed third party owned system in its solar policy, Maharashtra has permitted such ownership to only leased systems. A few other states have their own interpretation of third party owned systems which limits penetration only to Capex mode of investment.
Recently, the Draft Electricity (Rights to Consumers), 2020 released by the Ministry of Power proposed that the consumer has the right to Net metering only for loads less than 5 kW beyond which only gross metering is applicable. This would greatly reduce the flexibility available for consumers wishing to install rooftop solar systems.
Such non-uniformities and frequent regulatory changes bring uncertainty to the sector and hinder the progress of the grid connected rooftop solar segment and investment into the sector. Uniformity in policy and regulations shall attract more investment and help the country reach the target of 40 GW.
SUPRABHA TA program worked closely with the Forum of Regulators and supported them to finalize and release the Model Regulations for Grid Interactive Distributed Renewable Energy Sources (GDRES). The TA program is currently striving to achieve uniform regulations which would help reduce uncertainty in the sector.
