Achieving significant acceleration of RTS deployment in India will require finding the answers to six key policy and regulatory questions that were identified during the workshop titled “Unlocking the economic potential of rooftop solar in India” and through additional analysis by the IEA and CEEW.

Fortunately, a wide range of possible answers could be derived from good international and Indian examples, consultations with various Indian RTS stakeholders, and analytical works by the IEA and CEEW. Considering the short time left for India to achieve its 2022 renewable targets, the majority of proposed solutions do not require structural changes in the central or state regulatory frameworks and could result in faster RTS growth in the next one to two years.

To achieve this, the actions taken by policy makers and RTS market participants in the short to medium term should focus on enhancing economic incentives for DISCOMs to support RTS deployment. Reluctance of DISCOMs in supporting RTS development is often the main reason for the slow uptake of RTS, especially in residential and commercial segments. Encouraging innovative DISCOM-led RTS business models, expanding DISCOMs’ RTS benefits assessment capabilities, improving central incentives to DISCOMs and optimising RTS remuneration schemes should allow DISCOMs to gain and ensure support from RTS adoption.

At the same time, to improve access to financing for consumers interested in RTS investment, relevant institutions should encourage RTS demand aggregation; standardise and simplify RTS loan application processes in public, private and multilateral banks; and increase their involvement in providing affordable loans and guarantees. Easy access to affordable financing should greatly increase the ability of residential and commercial consumers to invest in RTS.

Moreover, the current rules of RTS remuneration schemes should be carefully reconsidered to provide more balance in sharing of RTS costs and benefits among all power system users and DISCOMs. Optimising remuneration rules to ensure RTS attractiveness to consumers, while providing fair remuneration for DISCOMs and minimising RTS impact on grid stability, are not easy tasks. It should be undertaken very carefully, with consideration of the interests of all stakeholders. However, solutions such as net billing could provide the requisite flexibility to achieve a much-needed balance among various stakeholders.

In parallel, more effort is required in streamlining the RTS investment process and disbursement of subsidies, as well as promoting RTS among residential and SME consumers. From a consumer’s perspective, investing in RTS should be as simple as possible, with a minimal number of required actions and short processes. Furthermore, well-informed consumers should be much more eager to invest in RTS. Vendors or installers with high market visibility should be able to expand their businesses more confidently in a cost-effective manner.

Introducing proposed solutions should allow India to build a thriving RTS market and considerably accelerate its capacity growth in the medium term. However, policy makers should already plan the next phase of the power system driven by the rise of DERs in the long term. The popularisation of RTS, distributed energy storage and EVs will cause drastic changes in the operation of power systems. The preparation of policy and regulatory framework for such a shift will allow reaping the full benefits of RTS and promote the building of the sustainable, efficient, reliable and secure Indian power system of the future.

List of challenges and corresponding solutions with potential to impact RTS deployment in the short, medium and long terms

Note: Dark colour indicates the main challenges addressed by each solution and light colour indicates areas of secondary positive effects. Source: IEA and CEEW analysis.