The Aakhya Weekly #18 | Shadows Cast Over Rooftop Solar
The Aakhya Weekly #18 | Shadows Cast Over Rooftop Solar
In Focus: India’s renewable energy goals beleaguered by rooftop solar woes
In April 2015, the government proposed a radical plan to boost India’s renewable power generation capacity to 175 gigawatts (GW) by 2022. Of this, 100 GW was assigned to solar - an ambitious target, since the total installed solar capacity in India was merely 3 GW at the time. 60 GW from the solar target was assigned to utility-scale solar, and the remaining 40 GW to rooftop solar. Remarkably, India has nearly met the utility-scale solar target (and would have exceeded it, had the pandemic not derailed deployment since 2020). However, with only a quarter of 2022 remaining, there remains a shortfall of over 25 GW in rooftop solar, which cannot be made up for within time.
The fundamentals for India’s solar industry remain strong - we have plenty of demand and a whole lot of sun. This reflects in the overall growth of the industry, recording a compound annual growth rate (CAGR) of 59% over the past decade. Tariffs have been cut to less than one fourth, from Rs. 9-10/unit in 2011 to Rs. 2-3/unit in 2021. So, why has rooftop solar deployment been so off-pace?
The reasons are manifold. In 2021, the government announced the imposition of a basic customs duty (BCD) on all foreign-made solar panels, as well as solar panels produced in SEZs (if they were transferred to other states). This has raised costs for all solar deployment nationwide. The move was done to enhance the ‘competitiveness’ of the domestic solar industry, but it did so by increasing costs of foreign made panels, thereby making the entire solar ecosystem costlier to the end-consumer. However, the recently announced Rs.19,500 crore production linked incentive (PLI) scheme for the manufacture of solar panels is expected to actually enhance Indian manufacturing and competitiveness.
On the supply side for small rooftop solar consumers, there remain numerous challenges which hinder large-scale deployment. The lack of awareness on the consumer side makes negotiation with every landowner a hassle. Even if consumers are aware of the benefits of rooftop solar, the design challenges for each rooftop are different. To deploy rooftop solar at scale, one needs to further sub-contract implementation through an EPC (Engineering, Procurement, and Consulting) team. However, once this starts becoming a viable business model, scaling it any further becomes an issue. For example, while Delhi-NCR is largely considered one large metropolis, from a solar perspective – Delhi, Noida, Gurgaon, Faridabad, Ghaziabad are in different states and have their own DISCOMs and rules. Sometimes within the state there are multiple DISCOMs. Each of these states have different electricity rules, different electricity tariffs and different rules for solar. In addition, the lowered threshold of net metering to 500kW in most states, the lack of viable financing options available for C&I clients below BBB+ rating, and restrictions on ‘banking’ electricity limited to the day-of in many cases compound challenges for rooftop solar deployment.
However, not all hope is lost yet. Among the dismal performances of most states and rooftop solar incentive schemes, one stand-out success has been the Surya Urja Rooftop Yojana of Gujarat. The incentive enabled Gujarat to achieve the highest cumulative rooftop installed capacity (~1.6GW) among all the states. Also, to increase consumer awareness, trust, and increase ease of rooftop solar installation, the government recently launched a one-stop portal for expedited assessment of rooftop solar viability, options, and obtaining required clearances.
While such recent steps are encouraging, there needs to be a more concerted and coordinated effort between the states’ and the central government to keep India on track with its publicly announced and often reiterated targets.
For a deeper dive on the subject, read this substack on the challenges faced by a rooftop solar entrepreneur in India, as well as this report on rooftop solar deployment by JMK Research.
Top Stories of the Week
Gandhi Jayanti Celebrated Across the World
On the occasion of Mahatma Gandhi’s 153rd birth anniversary, Minister of State for External Affairs V Muraleedharan unveiled the first Mahatma Gandhi statue in Oman and said the Mahatma's message of courage, truth and brotherhood is more relevant today than ever before. The statue will honour his enduring legacy for the world. This was an addition to the pre-existing 87 statues of Mahatma Gandhi across the globe.
In Slovenia, to commemorate Mahatma Gandhi’s ideals of peace, several scholars came together and published an e-book titled, ‘The Legacy of Peace and Truth: Studies on the Life and Work of Mahatma Gandhi’. This book was co-produced by the Indian Embassy in Slovenia and the University of Ljubljana. Additionally, in France, a road named after Mahatma Gandhi was inaugurated on the occasion of Gandhi Jayanti. This happened in the town of Grigny, situated near Paris.
PM Modi inaugurates launch of 5G services in India
In what is said to be an ushering in of a new era for internet telephony, the 5G network was launched in India on Saturday by Prime Minister Narendra Modi, placing India in a select group of countries that offer 5G services – including the US, South Korea, the UK, Japan, China and certain European countries. PM Modi, who is considered to be one of the driving forces behind the 5G launch, has called for services to be provided through indigenous technologies and network infrastructure. “New India will not remain a mere consumer of technology, but will play an active role in the development and implementation of that technology. With 5G, India is setting a global standard in telecom technology for the first time… India will play a big role in designing the future wireless technology, and manufacturing related to it,” PM Modi said at the launch of 5G services at the annual Indian Mobile Congress (IMC).
Indian Air Force inducts Prachand, the first made-in-India light combat helicopter
Defence Minister, Rajnath Singh inducted Prachand, a new, powerfully armed light combat helicopter (LCH), into the Indian Air Force’s newly raised 143 Helicopter Unit on October 3rd 2022. Developed by state-run aerospace major Hindustan Aeronautics Ltd (HAL), the 5.8-tonne twin-engine helicopter has been primarily designed for deployment in high-altitude regions. It features state-of-the-art technologies and systems compatible with qualities such as reduced visual, aural, radar and infrared signatures and crashworthiness features for better survivability.
Owing to the growing need for a more agile, multi-role dedicated attack helicopter suited to all Indian battlefield scenarios, the government had sanctioned the LCH project in October 2006. With prior experience in developing the Advanced Light Helicopter (ALH) Dhruva and its weaponised version, Rudra, HAL’s Rotary Wing Research and Development Centre embarked upon the project. Extensive flight testing was carried out on four prototypes at various altitudes, from sea level to the Siachen range, in extreme cold and hot weather conditions, and in desert regions over 2,000 flights with close to 1600 flight hours. According to its makers, the LCH is the only attack helicopter in the world which can land and take off at an altitude of 5,000 meters with a considerable load of weapons and fuel, meeting the specific requirements laid out by the Indian Armed Forces. Honouring the new era of atmanirbharta in the defence sector, there is now a projected requirement of 160 LCHs in total, with 65 of them sanctioned to the Air Force and 95 for the Army.
This Week in Policy
Macroeconomics and Taxation
The Reserve Bank of India (RBI) on 30 September further hiked the Repo Rate by 50 basis points in its efforts to combat rising inflation and tide over the adverse global environment.
BRICS Member States are planning to issue a new global reserve currency based on the basket of BRICS currencies, to rival the US dollar and the IMF’s Special Drawing Rights (SDRs) Currency.
Labour
A study by Centre for Monitoring Indian Economy (CMIE) revealed that India’s unemployment rate fell to 6.4%, the lowest in 4 years. In urban areas, the unemployment rate fell to 7.7% from 9.57%, while it dropped to 5.84% from 7.68% in rural areas of the country.
According to latest government data released by the Ministry of Labour & Employment, retail inflation for industrial employees increased slightly from 5.78% in July to 5.85% in August as a result of rising food prices.
Agriculture and FMCG
India emerges as the world’s largest producer and consumer of sugar, as well as the world’s second largest exporter of sugar by producing more than 5000 Lakh Metric Tonne (LMT) sugarcane during sugar season in 2021-22
Department of Agriculture and Farmers Welfare and National Agricultural Cooperative Marketing Federation of India (NAFED) sign MOU to boost millet production and marketing of millet based products.
Healthcare
The Indian government’s Department of Biotechnology has been collaborating with stakeholders such as Serum Institute of India and Bharat Biotech, in order to develop next generation COVID-19 vaccines that can protect people from any new variants without having to take any booster doses.
A recent study shows that female infant mortality rate (IMR) has drastically reduced across India. While in urban areas female IMR has gone below male IMR, rural India is yet to see such a shift, despite female IMR having gone down.
Foreign affairs
As part of India’s bilateral assistance towards Lebanon, the MEA handed over Made-in-India motorbikes. India shall also be organising an artificial limb fitment camp in Lebanon, soon.
MEA continues to rescue Indian diaspora involved in troubles abroad as the Government rescues 13 Indians from Myanmar, trapped in fake IT job racket. These Indians have safely reached their homes in Tamil Nadu.
On October 7th, the US-India Strategic Clean Energy Partnership (USISCEP) will be the subject of a ministerial discussion between US Secretary of Energy Jennifer Granholm and Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri.
Technology, Media and Telecommunications
Telcos have sought out policymakers to revisit net neutrality rules to ensure optimal utilisation of 5G technology in India.
TRAI organised a seminar on the emerging trends in the broadcasting sector at the annual conference of the Indian Mobile Congress on 3 October 2022 in New Delhi.
International trade and commerce
National Payments Corporation of India and Central Bank of Oman are on track to conclude an agreement for cooperation in digital finance and payments, to facilitate use of UPI and RuPay cards in Oman and seamless digital remittances for Indian workers and professionals.
The Central Board of Indirect Taxes and Customs (CBIC) has published draft rules on Customs Valuation of imported goods requiring importers to furnish additional information at Customs Automated System and while filing bill of entry in case of “specified goods”.
Banking, Finance and Insurance
Govt. likely to amend the SEBI Act to give SEBI enhanced powers to prosecute securities market offenders. Currently, it has powers equivalent to that of a civil court, however, to inititate criminal prosecution it has to go through regular courts.
SEBI reduces the minimum holding requirement of Real Estate Investment Trust (Reits) units by sponsors to 15% from 25% to encourage more companies to bring out Reits.
Department of Expenditure, Ministry of Finance releases 7th monthly installment of Post Devolution Revenue Deficit (PDRD) Grant of Rs. 7,183.42 crore to 14 States.
Centre issues draft guidelines for listing Regional Rural Banks in the stock market via IPOs.
Manufacturing
Karnataka government announces plans for India’s first EV industrial zone featuring a manufacturing setup of around 100,000 sq. ft. for companies to scale their businesses.
A recent parliamentary panel report shows that the state of Maharashtra has secured Rs 3513 crore, highest amount of investment under the production linked incentive (PLI) scheme for the textile sector.
Retail and e-commerce
The Open Network For Digital Commerce (ONDC) has floated a consultation paper seeking comments from the general public to build the trust of all stakeholders in the network till October 31st 2022.
Logistics
Constituted under the institutional framework of PM GatiShakti, the Network Planning Group recommends 3 important road connectivity projects for the improvement and upgradation of the roadways with a view of multimodality, easier commute, and land acquisition.
On October 3rd 2022, Railway Minister, Ashwini Vaishnaw announced modernisation of around 200 railway stations across the nation which will now have expanded coach capacities and world-class facilities.
Sustainability
Executive Committee of National Clean Ganga Mission approves 14 projects pertaining to sewerage management, industrial pollution abatement, biodiversity conservation, afforestation, river front development and decentralized wastewater treatment at a total estimated cost of approximately Rs. 1145 crores.
National Green Tribunal imposes Rs. 3,825 crore penalty on Telangana for poor urban waste management, suggests Telangana raise funds by imposing user charges on households and businesses for discharging waste.
Delhi govt. launches 15-point Winter Action Plan to combat air pollution.
Upcoming Events
FICCI HEAL 2022
October 10-12 | FICCI, Federation House, New Delhi
FICCI, with support from Ministry of Health and Family Welfare (MoHFW) and NITI Aayog, is organising the 16th edition of its annual healthcare conference, FICCI HEAL, on October 10-12 at the FICCI Federation House, New Delhi. This year’s theme is of ‘Healthcare Transformation: Driving India’s Economic Growth’. The conference endeavours to converge all stakeholders and provide a forum for sharing of learnings and experiences. A conglomeration of CEO’s, policy makers, national and international leaders from healthcare and allied industries is expected. Dr. Mansukh Mandaviya, Union Minister, MoHFW, and Smt. Smriti Irani, Cabinet Minister, Ministry of Women and Child Development, GoI, will be present at the conference. More Information | Registration Link
National Conference on Electric Mobility
October 14 | Hotel Shangri La, New Delhi
ASSOCHAM is organising a national conference on Electric Mobility on October 14th at Hotel Shangri La, New Delhi. Key issues for discussion will revolve around Centre and State initiatives for EV promotion, FAME-II policy, PLI Schemes, adopting global best practices, incentives, subsidy and financing challenges, managing challenges of charging infrastructure, among others. Dr. Mahendra Nath Pandey, Union Minister for Heavy Industries, GoI, will be the chief guest for the event. More Information
POWERGEN India 2022
October 12-14 | Hall No. 8-11, Pragati Maidan, New Delhi
POWERGEN India, the premier forum for India’s power generation industry, is being held from October 12-14 at Pragati Maidan, New Delhi. The forum will see the participation of over 250 exhibitors and 8000 influential decision makers including policy makers, regulators, power producers, utilities, commercial & industrial users, EPC’s, developers, equipment and solution providers. More Information | Registration Link
A Few Good Reads
Read the transcript of Ezra Klein’s interview with Patrick Collison, co-founder and CEO of multi-billion dollar payments company, Stripe.
Tanvi Madan writes for Foreign Affairs on how Chinese belligerence and aggression has driven India towards the West.
Noah Smith, in his personal blog Noahpinion, pens a “techno-optimist post” on hydrogen as the fourth big green-energy technology.
Gentle Leviathan by Apurva Kumar brings us another impactful analysis on the dimensions of statehood and the effect that they have on economic growth of a nation.
Tweets of the Week
A fascinating thread on the nomenclature of Indian towns and villages:
Statistics that highlight the exacerbated impact of unpaid work on working women in India:
Tracing the significance of Durga Puja to the tumultuous times of the freedom struggle:
Key Notifications
Appointments Committee of the Cabinet approves 35 Joint Secretary level appointments.
Universal Service Obligation Fund (USOF), a body under the Department of Telecommunications, officially launches Telecom Technology Development Fund (TTDF) which aims to fund R&D in rural-specific communication technology applications. Applications currently open - more details here.
Ministry of Commerce and Industry notifies four new appointments in the Tobacco Board.