Council on Energy, Environment and Water Integrated | International | Independent

Unlocking the Economic Potential of Rooftop Solar PV in India

May 2021 | Energy Transitions, Sustainable Finance

Suggested citation: IEA and CEEW. 2021. Unlocking the Economic Potential of Rooftop Solar PV in India. Paris: IEA


This report captures the insights of the workshop, ‘Unlocking the economic potential of rooftop solar energy in India’ conducted by the Council on Energy, Environment and Water (CEEW) and the International Energy Agency (IEA), in collaboration with the Ministry of New and Renewable Energy (MNRE) of India. It aims to answer the following six questions on the acceleration of rooftop solar (RTS) expansion in India, and outlines detailed policy options, business solutions, and administrative modifications for the rapid deployment of RTS.

     1. How can DISCOMs benefit from the rapid deployment of RTS?

     2. How can we make the current financial environment more conducive to the development of RTS?

     3. How can we improve existing remuneration policies to attract more investment and balance the interests of consumers, DISCOMs and regulators?

     4. How can other RTS support schemes be improved? What new policies can we introduce in India to achieve quick acceleration of RTS deployment?

     5. How can we effectively encourage residential and small or medium-sized enterprise (SME) consumers to invest in RTS?

     6. How can we adopt a holistic policy approach for all distributed energy resources (DERs) to maximise the value of RTS in combination with electric vehicles (EVs) and storage?

Key Recommendations

Here are six quick-effect solutions for the challenges outlined above. Most of these could accelerate the deployment of RTS in the next one to two years, and do not require the implementation of structural changes in central or state regulatory frameworks.

  • Enhance economic incentives for DISCOMs to support RTS deployment: Promote DISCOM-led business models focused on aggregating demands for RTS systems. Take advantage of DISCOMs’ existing relationships with customers, develop methodologies for the assessment of RTS benefits in DISCOMs’ grids, and enhance central performance-based incentives for DISCOMs.
  • Improve access to finance options for consumers interested in RTS investment: Increase the involvement of private and public institutions in providing affordable loans and guarantees, standardise RTS loan applications and their appraisal and assessment processes, and simplify the rules of sectoral lending programmes.
  • Optimise net and gross metering rules regarding system integration and remuneration: Increase the limits on the allowed system capacity without jeopardising grid stability, balance RTS owners’ revenues, and levy charges for grid utilisation. The objective is to ensure an attractive return of investment in all consumer segments and promote self-consumption by designing new remuneration rules.
  • Streamline disbursement of subsidies and the overall investment process for small RTS: Relax requirements to help residential consumers avail subsidy schemes more easily, reduce DISCOMs’ responsibilities in promoting RTS, and simplify the investment process from the consumer’s perspective.
  • Expand promotion of RTS among residential and small and medium-sized enterprise (SME) consumers and boost their confidence in RTS: Expand education campaigns, simplify administrative procedures, increase the availability of information on the RTS market, and promote high-quality equipment and services.
  • Adopt new approaches to system operation, electricity market design, and energy policy: Harmonise rules for supporting RTS across the country, facilitate open-access power procurement for RTS systems, stimulate demand for rooftop projects through appropriate building codes and city-planning procedures, and reduce cross-subsidies in electricity tariffs while providing protection to vulnerable consumers through other channels.

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