The Indian government has proposed a performance-based incentive scheme for power distribution companies (discoms) to support the development of 1,350 MW grid connected rooftop solar capacity. The government believes discoms play a significant role in the implementation of rooftop solar and wants to support the distribution companies with a grant of 3.75 million INR (around $54,900) per installed MW of rooftop solar.
Rooftop solar in this instance is not limited to the house roof, but also incorporates any small plant on the ground within the boundary of a facility up to the capacity of 2,000 kW. The Ministry of New and Renewable Energy (MNRE) assumes that,on an average, a 1 kW solar power system on a rooftop area of about 10 m2 has a benchmark cost of 75,000 INR ($1,100).
MNRE has proposed that discoms should be supported to develop 1,350 MW in various sectors under net metering. The proposed scheme suggests the largest rooftop solar target capacity for Maharashtra (160 MW), followed by Uttar Pradesh (145 MW), Tamil Nadu (118 MW) and Gujarat (108 MW).
The aim is also to help discoms assess upgrading and modernization requirements of their distribution network, facilitate demand aggregation, developing consumer awareness. In the end it is about reforming discoms.
For this purpose, discoms shall be required to set up a dedicated "Rooftop Solar Cell" to be headed by a c-level executive or engineer. This cell will be the implementing nodal cell for this scheme.
Discoms will have to submit a proposal with requisite information along with annual rooftop solar installation targets up to 2019-20. These proposals will be reviewed and funds will be distributed through the national level Sanctioning and Monitoring Committee (SMC). Apart from this central financing scheme, discoms will be also be eligible for any state grant. The best performing discoms will also be given cash awards of up to 2 million INR ($29,300).
Rooftop solar has seen rather slow growth in India as compared to utility scale PV, with India's current rooftop PV capacity standing at over 1 GW. This is way below the 40 GW targeted capacity that the country is aiming for by 2022.