National Portal for Rooftop Solar
Reimagining the Solar Subsidy Programme of India
1. What is the most effective tool for successful implementation of decentralized solar in India?
2. How can India fastrack its pace to achieve the 40GW rooftop solar target by December 2022?
3. Is solar rooftop popular enough among the Indian households?
And the list of questions continues…
To solve for these and help scale rooftop solar among residential customers, the government of India has taken a historic step by reimagining the entire Solar Subsidy Program.
“Hon’ble Prime Minister, Shri Narendra Modi, on July 30th, 2022, launched the New and Simplified Programme for Rooftop Solar Phase II under which a national solar portal has been created through which any Indian consumer can apply for solar net metering and subsidy.”
In the words of our Prime Minister, “Bijli Bachaana, Desh Sajaana!”.Let’s look at how we can save electricity for a decorated future of our country.
A brief overview of why we need this policy at all.
To popularize rooftop solar amongst homeowners and achieve the set target, residential consumers are offered financial assistance in the form of subsidies for which the state electricity utilities/DISCOMs had been appointed as implementation agencies. Under the grid-connected Rooftop Solar Subsidy Programme, residential consumers were eligible to avail a capital subsidy of 20/40% for system sizes up to 10kW. The subsidy was disbursed via state DISCOMs/state nodal agencies through periodic empanelment tenders where rate discovery was also done. Final price of the system was determined by reverse L1 rate bidding.
However, there were several implementation challenges owing to which many consumers have not been able to take advantage of the subsidy scheme. A summary of the key challenges that led to slower growth in residential solar segment despite the very attractive capital subsidy scheme is given below:
- Subsidy disbursement capped at the price of the system discovered through solar rooftop tenders/MNRE benchmark rates (whichever is lower): Solar rooftop tenders led to the discovery of extremely low selling prices for the rooftop solar systems due to various reasons. One such reason was the capping of rooftop solar system rates by the rates determined by MNRE as benchmark rates for various system sizes. The rates determined by MNRE did not represent the current system costs as these were fixed for around a year while the costs of materials in a system kept increasing in the same period. Thus, vendors quoted very low selling prices and indulged in malpractices such as invoicing customers separately outside the tender rates. All the above also led to high occurrences of poor-quality systems getting installed and many projects not being completed to the awarded capacity.
- Lack of Consumer Choice: As with other “consumer products”, residential rooftops should also be offered with an array of features for the customer to choose from. For example – string inverter versus microinverter, height of the system, rooftop can be designed as a Pergola to make the terrace space useful and aesthetic, water proofing of the rooftop system so that the space can even be used in rains, use of Solar Tiles, etc.
To solve the above problems, National Solar Portal has come as a game-changer for the residential sector. Let’s look at the “How” of it…
Let’s first look at the details of the policy:
- Under the national simplified subsidy scheme, subsidy amounts have been fixed by the government as per the following slabs which are standard across all states and UTs of India.
- The CFA/subsidy will be released after clearance by the inspecting authority (DISCOM) on successful commissioning and installation of the metering system as per specified procedure.
- The CFA/subsidy would be calculated based on total solar module capacity/ solar inverter capacity/ capacity approved by DISCOM, whichever is lower.
- DISCOMs need not invite tenders, discover rates, and empanel vendors. In addition to this, the vendors need not wait for the release of subsidy from the Ministry, rather they can get the full amount from the consumer as the consumer will be getting subsidy directly into his bank account.
A revolutionary step for the solar industry and its stakeholders…
- The scheme is a Direct Benefit Transfer (DBT) scheme wherein consumers will get the subsidy credited to their bank account within 30 days after installation and commissioning of their rooftop solar system.
- Some of the benefits of this scheme include hassle free online applications, freedom to consumers to choose any solar company which is empaneled in their DISCOM under the DBT scheme, track the progress of application on the national solar portal in real time, direct disbursement of subsidy to consumer’s account within 30 days of installation and commissioning of solar system, provision of 5 years of after-sales and maintenance services to their consumers by the solar company, etc.
- Special focus by the government to protect the interests of the consumers. A vendor will have to get registered at the DISCOM and maintain the rooftop solar system for at least 5 years.
- The new scheme offers enhanced choices for the customers with the removal of ceiling rate for the selling price. Customers can now customize their rooftop solar solutions and opt for better quality components.
- Simplification of getting empanelment and working under subsidy schemes for the solar companies:
a) Any solar company can now pay Rs. 2.5 Lac Bank Guarantee to get registered in a DISCOM. With this, the company gets eligible to install subsidized rooftop solar systems for consumers in that DISCOM under the National Subsidy Scheme.
b) Vendors will also get access to provide their information and rates on the National Portal so that any consumer willing to install rooftop solar can contact them and get the rooftop solar installed through mutually agreed rates.
A glorious moment for the Indian Solar Industry for achieving a public policy tool that will:
- Accelerate market driven growth for the solar industry.
- Improve consumer choice.
- Ensure better quality and performance of the solar systems installed.