ADB supports rooftop solar systems in India
Kartavya Desk Staff
Syllabus: Economy: Energy: Renewable Energy/ Government Policies and Interventions
Source: ET
Context: The ADB has approved a $240.5 million loan for rooftop solar systems in India. Recently Pradhan Mantri Surya Ghar Muft Bijli Yojana was approved with a budget of 75,021 crores and aims to provide 300 units of free electricity monthly to 1 crore households through rooftop solar setups.
Status of Rooftop solar system in India:
As of March 2024, India has 11.87 GW of installed rooftop solar capacity, with a 2.99 GW increase in 2023-2024. Gujarat and Maharashtra lead in rooftop solar installations, while residential sectors make up only 20% of the total. India’s potential for rooftop solar is about 796 GW, with 250 million households capable of installing up to 637 GW. Overall solar capacity reached 73.31 GW by December 2023, led by Rajasthan and Gujarat.
Benefits of the Rooftop Solar system:
• Reduction in Electricity Bills: By installing rooftop solar systems, households can significantly reduce their electricity bills, benefiting both the poor and middle classes.
• Energy Self-Reliance: It helps to make India self-reliant in the energy sector by promoting decentralized solar power generation.
• Energy Security: Promoting rooftop solar power contributes to enhancing energy security by diversifying energy sources and reducing dependence on traditional fossil fuels like coal.
• Environmental Sustainability: Solar energy is a clean and renewable energy source, leading to reduced greenhouse gas emissions and environmental pollution, thereby supporting sustainable development.
• Increased Energy Access: By targeting individual households, rooftop solar aims to increase energy access, especially in rural and remote areas where grid connectivity is limited.
• Fulfilling International Commitments: It aligns with India’s international commitments to increase the share of non-fossil fuel-based energy sources in its energy mix, contributing to global efforts to combat climate change.
• Potential for Economic Growth: The growth of rooftop solar power capacity creates opportunities for economic growth, job creation, and technological innovation in the renewable energy sector.
• Uniform Distribution of Solar Potential: Unlike large solar parks that require extensive land and infrastructure, rooftop solar systems can be installed uniformly across all states and regions, tapping into the solar potential of every locality.
Challenges in the Implementation of Pradhan Mantri Suryodaya Yojana:
Challenges | Details
Free electricity issue | The provision of free electricity by many states discourages people from adopting rooftop solar systems.
Financial Constraints for DISCOMs | Discoms foresee losses due to the net metering system, as they already incur fixed costs and pay contracted charges to power generators.
Fear of increased costs for discoms due to compensating consumers for absorbing power from rooftop solar plants.
The limited success of previous schemes | The rooftop solar program fell short of expectations, achieving only about 11 GW by December 2023, compared to the 40 GW target.
The majority of capacity is contributed by commercial and industrial consumers, with limited adoption by households.
Flip-Flopping Policies | GST hike on solar system components increases capital cost, affecting the attractiveness of rooftop solar.
Regulatory Framework | Slow growth due to the absence or withdrawal of state-level policy support, especially for business and industrial segments
Inconsistent Rules on Net and Gross Metering | Power ministry’s new rules exclude rooftop solar systems above 10 kW from net-metering, potentially stalling the adoption of larger installations.
Low Financing | Banks advised by MNRE to offer loans for rooftop solar at subsidized rates, but nationalized banks have limited offerings. Private players in the market offer loans for rooftop solar at higher rates, up to 10-12%, posing financing challenges for adoption.
Way forward:
• Increase awareness about the long-term benefits of rooftop solar.
• Offer incentives or subsidies to offset initial installation costs.
• Review net metering policies to ensure fair compensation for both consumers and DISCOMs.
• Establish clear and stable regulatory frameworks to provide certainty to stakeholders.
• Empower distribution companies and create an enabling environment for greater penetration of rooftop solar.
• Develop innovative financing mechanisms tailored to the needs of rooftop solar projects.
About Pradhan Mantri Suryodaya Yojana:
About | Description
Name of the Scheme | Pradhan Mantri Suryodaya Yojana
Objective | Aims to provide 300 units of free electricity monthly to 1 crore households through rooftop solar setups
Definition of Rooftop Solar Panels | Photovoltaic panels installed on building rooftops connected to the main power supply unit
Subsidies | 60% of installation costs are covered for 2 kW systems. 40% of installation costs covered for systems of 2-3 kW capacity
National Portal | It will facilitate subsidy applications and assist in finding a suitable vendor for installing rooftop solar. Additionally, it will aid decision-making by providing relevant information as needed.
Related Government Initiatives | The Rooftop Solar Programme was launched in 2014. Aims for 40 GW rooftop solar capacity by 2022 (deadline extended to 2026). Pradhan Mantri Suryodaya Yojana complements efforts to achieve the 40 GW target
Other Government Initiatives to Harness Solar Energy | National Solar Mission; Solar Park Scheme; Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM); Surya Mitra Skill Development Programme; International Solar Alliance
Insta Links:
Rooftop solar scheme
Mains Links:
• India has immense potential for solar energy though there are regional variations in its developments. Elaborate. (UPSC 2020)
Prelims Links:
With reference to solar power production in India, consider the following statements: (UPSC 2018)
• India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units.
• The solar power tariffs are determined by the Solar Energy Corporation of India.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Ans: D
‘Net metering’ is sometimes seen in the news in the context of promoting the (UPSC 2016)
(a) production and use of solar energy by households/consumers (b) use of piped natural gas in the kitchens of households (c) installation of CNG kits in motor cars (d) installation of water meters in urban households
Ans: A
Consider the following statements: (UPSC 2016)
• The International Solar Alliance was launched at the United Nations Climate Change Conference in 2015.
• The Alliance includes all the member countries of the United Nations.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Ans: A
Consider the following statements: (UPSC 2022) 1. Gujarat has the largest solar park in India. 2. Kerala has a fully solar-powered International Airport. 3. Goa has the largest floating solar photovoltaic project in India.
Which of the statements given above is/are correct? (a) 1 and 2 (b) 2 only (c) land 3 (d) 3 only
Answer: B: 2 only