ADB’s Guidebook To Boost Rooftop Solar Adoption In India

Utilities As Facilitators/Investors/Demand Aggregators Can Help India Boost Rooftop Solar Adoption, Says Asian Development Bank

ADB’s Guidebook To Boost Rooftop Solar Adoption In India

According to the Indian government’s tentative targets for rooftop solar, the country was expected to have installed 40 GW capacity by December 2022-end. However, it had only installed over 6 GW by February 2022, as per the ADB. (Source: Asian Development Bank)

  • ADB has released 2 separate guidebooks detailing the role Indian utilities can play to increase the pace of rooftop solar installations
  • It recommends business models that utilities can follow to evaluate and target rooftop PV installations either as a facilitator or investor
  • As demand aggregators, discoms can significantly bring down capital and transaction costs

Taking a deep dive into the challenges faced by India’s laggard rooftop solar segment, the Asian Development Bank (ADB) has come out with a series of helpful guidelines for the country to increase rooftop PV deployment, centered mainly around active engagement of utilities.

Since discoms need to approve such projects, their involvement becomes crucial in the adoption of rooftop solar. Currently, most utilities view rooftop solar as a loss making venture but these need to be shown the advantages this segment brings for their business in the form of reduced technical and commercial losses, better demand management, and savings in power procurement.

The authors of the report for utilities-led business model push forward 4 business models to help the utility evaluate and target rooftop PV deployment following a facilitation or investment approach, and enable it to maximize economic benefits while lowering financial burden on end consumers.

The 4 models suggested in the Guidebook for Utilities-Led Business Models: Way Forward for Rooftop Solar in India are as follows:

  • Model 1: Utility as a facilitator which is the conventional business model currently being implemented by most utilities, especially for residential consumers. Here, the utility can either invite interest from consumers, identify buildings, conduct feasibility and bid out capacity to EPC companies, or can empanel EPC companies and discover price for the installations while customers can select an EPC from the list.
  • Model 2: Roof-leasing with utility investment under which a consumer leases roof-space to the utility to install solar panels and receive energy credits for power generated.
  • Model 3: EPC on an annuity payment basis, with partial stakeholder investments. Here, consumer contributes part of the capital, and the utility invests remaining and procures all the power generated at no cost. The developer installs the system and undertakes O&M for 5 years.
  • Model 4: Utility acts as a master renewable energy service company which is recommended for high-paying (commercial and industrial) consumers in long-term relationships with the utility. The utility will install and maintain the PV system and supply consumers power at a fixed tariff, lower than the retail tariff. It will enable the utility to retain these high paying customers. “The purpose of keeping utility as a trader ensures quality of O&M over the life of the project as well as payment security to the developer. The utility thereby continues to retain its high-paying consumer base,” the authors recommend.

“Such models can be adapted to target low-paying consumers—where the utility is highly dependent on cross-subsidy—or in areas where there is high distribution-transformer loading, or substantial distribution losses. Such targeted approaches will not only forestall the utility’s need for immediate expenditure, but it will also ensure long-term benefits for all stakeholders,” reads the report.

In yet another Guidebook for Demand Aggregation: Way Forward For Rooftop Solar in India, the bank defines the role utilities can play in aggregating demand and drive the adoption of rooftop solar. It explains the role of utility in aggregating interest from consumers and then taking requisite steps to engage vendors to install the systems on rooftops of interested consumers. It can either play the role of an investor or a facilitator.

Utilities can play the role of demand aggregators for rooftop solar since these are crucial to the success of any rooftop solar ambition for India, according to the ADB. (Source: Asian Development Bank)

“Through demand aggregation, capital cost and transaction cost can be reduced considerably. Consumers’ limited awareness, and high consumer-acquisition costs for developers, have been major obstacles to the deployment of RTS. Both the issues can be addressed with the help of demand aggregation,” reads this report.

According to the bank, overall demand aggregation process can be broadly categorized into 3 phases of aggregating interest from consumers, conducting feasibility assessment and deploying rooftop solar projects through a competitive auction process.

“The guidebook will assist distribution companies or utilities interested in undertaking demand aggregation programs in their license areas,” it adds.

One of the largest solar PV markets in the world today, India has to go a long way to accelerate its rooftop solar segment whose total installed capacity as on February 28, 2022 was only 6.476 GW, as against the 40 GW target for 2022-end, according to the bank.

About The Author

Anu Bhambhani

SENIOR NEWS EDITOR Anu is our solar news whirlwind. At TaiyangNews, she covers everything that is of importance in the world of solar power. In the past 9 years that she has been associated with TaiyangNews, she has covered over thousands of stories, and analysis pieces on markets, technology, financials, and more on a daily basis. She also hosts TaiyangNews Conferences and Webinars. Prior to joining TaiyangNews, Anu reported on sustainability, management, and education for leading print dailies in India. [email protected]

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