India Approves Financial Aid For Rooftop Solar Ph-II

Indian Cabinet Committee On Economic Affairs Approves INR 118 Billion ($1.66 Billion) For Phase-II Grid Connected Rooftop Solar Program To Be Helmed By Electricity Distribution Companies, Exclusively For Residential Segment
08:10 AM (Beijing Time) - 24. February 2019
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Indian rooftop solar power uptake until December 31, 2018 has resulted in a total capacity addition of only around 1.44 GW, according to official MNRE numbers. Now, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi (in the picture) has approved 'central financial assistance' to focus on rooftop solar in the residential segment. (Photo Credit: Press Information Bureau)

Key Takeaways

  • Indian government has announced INR 118 billion ($1.66 billion) as central financial assistance (CFA) to implement Phase-II of the grid connected rooftop solar program
  • Focused on residential segment, it excludes other categories as institutional, educational, social, government, commercial, industrial from being the beneficiaries under the scheme
  • Electricity distribution companies (discoms) and their local offices have been appointed as the nodal agencies for the implementation of the program
  • Discoms will be compensated through performance linked incentives, that will be available to them till the achievement of initial capacity of 18 GW

India has approved central financial support of INR 118 billion ($1.66 billion) for Phase-II of its grid connected rooftop solar program. The money will be used to implement and achieve the 40 GW target by 2022 in the rooftop segment.

The country has fixed 100 GW of solar power capacity to be achieved by 2022 under its National Solar Mission (NSM), with rooftop solar contributing 40 GW. As per the Ministry of New and Renewable Energy (MNRE), till December 31, 2018, India’s grid-connected rooftop solar power capacity was only 1,443.74 MW.

Under the so-called Phase-II central financial assistance (CFA), the focus will be on the residential sector that has been a laggard in the rooftop segment. Institutional, educational, social, government, commercial, industrial segments have been kept out of the purview of the CFA this time.

Here are some of the major features of the Phase-II CFA approved by the Cabinet Committee on Economic Affairs chaired by the country’s Prime Minister Narendra Modi:

  1. Rooftop solar systems of up to 3 kW will be eligible for 40% CFA, while those beyond 3 kW and up to 10 kW can avail 20% CFA.
  2. Group housing societies and residential welfare associations (GHS/RWA) will get 20% for rooftop solar systems for supply to common facilities; for individual systems per household system sizes of up to 10 kW can claim for CFA, with total capacity of up to 500 kW, inclusive of systems put up by individual houses in the GHS/RWA segment.
  3. Residential category will get CFA for 4 GW of total capacity and it will be provided on the basis of benchmark cost or tender cost, whichever is lower.

Electricity distribution companies (discoms) and their local offices have been appointed as the nodal points for implementation of the program. To encourage them to take up the job and invest in terms of providing for additional man power, capacity buildings, creating infrastructure, awareness and the like, the program has put in place performance lined incentives which will be available to the discoms until a cumulative of 18 GW  is reported under the scheme.

The government sees some 9,39,000 new jobs being created during the course of the program.

India has announced the scheme soon after approving INR 85.8 billion ($1.2 billion) viability gap funding for 12 GW of grid connected solar power projects for government consumption under its CPSU Scheme Phase II using domestically manufactured PV cells and modules (see India To Develop 12 GW Solar PV With Local Modules).

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani