The Ministry of New and Renewable Energy (MNRE) has
announced financial assistance in the form of grants to distribution companies
(DISCOMs) of up to Rs.3.75 million (~$55,000)/MW for rooftop solar
installations. Through this program, the MNRE immediately wants to:
- expand rooftop solar projects by supporting
capacity of 1,350 MW, and
- support DISCOMs to assess upgrade and modernization
requirements of their distribution network, facilitate demand aggregation,
develop consumer awareness, develop enabling forms/processes, meter/equipment
procurement, and capacity development.
The financial assistance to DISCOMs is contingent upon
meeting an extensive list of conditions set by the MNRE, including setting up a
separate rooftop solar “cell” to execute and implement this
The MNRE is also proposing a financial award that will identify
best practices of DISCOMs, state nodal agencies and award the best performance
at DISCOM, Division and Zonal levels. The MNRE is currently targeting 40 GW of solar
rooftop by 2022, of which only 605 MW have been installed, according to Mercom’s India
Solar Project Tracker.
DISCOMs can still utilize other incentives along with those
provided under this program.
“States and union territories have
been providing incentives to rooftop installers, yet solar rooftop did not take
off as expected,” stated an MNRE official. “The new incentive announced by the MNRE
will strengthen the sector on both sides: the sector will be incentivized now
through the MNRE with grants to DISCOMs, and state nodal agencies’ grants/subsidies to consumers
Recently, state nodal agencies in Haryana,
Chandigarh, and Madhya
Pradesh have announced incentives for rooftop solar.
The MNRE official added that rooftop solar can be a way to
generate some revenue for households through net metering, creating interest
among homeowners. The incentives for DISCOMs will remove the major bottleneck
of signing power purchase agreements (PPAs). The MNRE official believes while
the target of 40 GW might be huge, it is attainable, and the MNRE program is
just in time to address the challenges facing solar rooftop.
will empower the DISCOM to focus on rooftop solar as the incentive/MW is very
attractive,” an official at Uttarakhand
Power Corporation (UPCL) said.
Officials at other DISCOMs and DISCOM holding companies
welcomed the MNRE’s incentive program, but
showed concern around the timeframe of fund disbursement. “The MNRE’s incentive is good. For it to be immediately beneficial,
the governing body should make the process of getting the incentive easier,” stated an official at Madhya Pradesh
Paschim Kshetra Vidyut Vitran Co. Ltd.
While developers were happy to see the incentive, there were
also concerns about the process and size of the incentive. “The MNRE should have offered up to
Rs.5 million (~$73,244)/MW as an incentive to make the program a success,” said a source at Rays Power Experts
program is a welcome one, but the MNRE should speed up process for getting
clearances,” added another large rooftop
The MNRE is targeting 5 GW of rooftop solar to be installed
in the financial year 2017-18. Mercom has reported that falling
module prices have been a boon for the solar sector. According to Mercom’s Solar
Quarterly Report, module prices are expected to further decline with the slowdown in China. This combined with the new incentives is expected to be beneficial
for Indian rooftop solar sector.