Delhi can thrive on solar power but not with mere incentives; installation bottlenecks must go, awareness should grow
Offering an incentive on generation is just a good first step to attract people towards a more sustainable technology.
In the summer of 2014, Ikea completed the solar rollout to 18 stores in England. The Swedish furniture giant had installed 1,000 systems in the country by then. However, the results of a survey it commissioned around the same time revealed that more than half of households were unaware that that solar-generated electricity is a cheaper variant to conventional electricity. The sun is more generous with its presence in the East than it is in rainy England and even here, an overcast of ignorance clouds the sun’s potential for generating power.
The Delhi Solar Policy 2016 had a section on Generation-Based Incentive (GBI) of Rs 2 per unit (kWh) of Gross Solar Energy generated being offered for a period of three years starting from 1 January 2016 till 31 March 2018. The GBI is available for existing and future solar plants installed at the rooftops of domestic consumers. Before the sun set on August’s first Saturday, Chief Minister Arvind Kejriwal was seen inaugurated large-scale solar power plants at Dwarka's residential societies Ispat CGHS, Saksham Apartments, Supriya Apartments, Balaji Apartments and Navrattan Apartments. The total capacity of these plants is 416.5 KW. The plants are slated to generate more than 4.8 lakhs units of power each year, and cumulatively 1.2 crore units of power over the life of the plant, which is roughly 25 years.
Manish Yadav, business development manager at Revanta Solar told Firstpost that the problem it faces is lack of awareness especially regarding cost and subsidy. For instance, the model followed in the case of Dwarka’s Balaji Society is RESCO, a model in which no upfront investment is required for the installation of solar plants. In this, the said rooftop system is owned by a third party or a project developer who can sell the solar energy directly to the owner or any other captive consumer or the distribution company, following a Power Purchase Agreement. “It took us a month and a half to install the plant and cost us Rs 45- 50 lakh. While we have installed it free of cost, we will take electricity charges from them for the next 25 years under the RESCO model, which is Rs 4.66 per unit as fixed by the Delhi government,” Yadav said while deconstructing the model and confessed that it takes a while to explain to people how this model works.
Shravan Sampath, CEO of Oakridge Energy, told Firstpost, "Over the past few years, power generation and distribution has been getting decentralised, while communities and individual homes are keen to be more in control of their power generation and consumption. Oakridge is working with BSES and other utilities to evolve a market friendly model so that societies can benefit with solar energy, while the developer has adequate payment security to provide comfort to investors and lenders." Oakridge Energy is a leading residential solar rooftop company with a presence across North India, and in over 600 residential installations including residential societies in NCR.
Another model is CAPEX, wherein the rooftop owner hires a system integrator/EPC company to install the rooftop SPV system by making the necessary investment. Namit Arora, who led the drafting of Delhi’s solar energy policy, told Firstpost that most initial rooftop solar deployments in Delhi have been in the commercial and government sector, where the GBI does not apply. “In the residential sector, the GBI has been underutilised to date because people don’t know about it. It needs to be better publicised. As the residential sector’s adoption of rooftop solar picks up in Delhi, I expect the use of GBI to grow and to drive greater adoption,” he observed.
One agency working on increasing awareness is the BSES that plays the role of an anchor in bridging the gap between the consumer and the vendor. Post installation, BSES carries out inspection for assessing the quality and conducting for compliance of technical requirements. One of the pre-requisites for GBI subsidy is the net metering mechanism where the grid acts as storage for the excess solar generation to be exported to grid relatively. A senior BSES official responded to Firstpost’s query regarding awareness initiatives on the technical and legal nuances of the solar policy: “A dedicated website has been created as part of BSES’ solar city initiative, riding on BSES’ existing website www.bsesdelhi.com.”
Solarize Dwarka is a programme launched under the BRPL’s (BSES Rajasthan Power Limited) Solar City Initiative where the financial assistance provided is in terms of 30 percent capital subsidy provided by the MNRE along with Rs 2 generation-based incentive allotted to a limited number of early projects by the Delhi government. “In case of the plant in Dwarka, it took us weeks to convince residents regarding the benefits of solar power and we missed the 30 June deadline set by the MNRA and that would have resulted in loss of subsidy. Luckily, the deadline was extended to September,” Yadav said while revealing the pitfalls of unfamiliarity among consumers.
It is the BRPL that acts as a facilitator in aggregating the consumers and for matching the demand with the project developer supply and supplies the list of vendors to the consumer. Kartikeya Sharma of Sunsure Energy, a complete solutions provider in the solar space, said that the way to get the subsidy is warped, with long drawn forms and conditions. “Subsidies are only provided to those who use solar panels made in India and that limits the game to domestic players and affects competitiveness on the basis of quality,” he said.
The minimum eligibility criteria for availing the benefit of GBI is that the solar plant should have generated minimum of 1,100 units (kWh) per annum per kWp. Those solar plants that generate less than 1,100 units (kWh) per kWp in a year aren’t eligible to avail GBI facility.
The Department of Power, Delhi government, has nominated Indraprastha Power Generation Co. Ltd (IPGCL) as a nodal agency for tendering and installation of solar power systems. AK Jha, a senior official with the power department, said that the GBI that was introduced for a period of three years (ending in March 2019) and the government is thinking in the direction of extending its benefits. “The main problem lies not with the consumer but in the attitude of the market towards the technology. Such few banks have financed solar projects for IPGCL and that pushes up the cost for solar in the domestic segment,” ha said stressing on the need for greater public awareness to instil confidence in developers regarding the demand for solar power.
Earlier this year, discoms (distribution companies) in Delhi conducted a survey and found out that 400 out of 2,000 residential societies are interested and they have the combined potential of 1,000 MW. “Last year, IPGCL made requests to housing societies to install solar plants and we received queries from nearly 40 societies. We would waste many weeks convincing RWA presidents regarding the viability of solar power. This year, things have changed and consumers appear more mature,” Jha said adding that more than 100 MW have been installed in the capital already and these are primarily installations in the government sector.
Meanwhile, in partnership with the World Bank, the Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) has, quite recently, tendered 33 MW of grid-connected rooftop solar PV projects to be set up under the RESCO model. A data room has been set up with the help of World Bank. This includes site specific information and consumption history to reduce the risk profile of projects. The MPUVNL provides compensation to RESCO developers in the event of early termination. To lower the entry barrier and to open up the sector, no technical criteria are put for eligibility and the net-worth requirement has been set at just Rs 10 million (~$14,622)/MW. Since under-performing developers will get penalized on their own, owing to less revenue generation, so operational performance guarantee is not sought from the developers.
Offering an incentive on generation is just a good first step to attract people towards a more sustainable technology, but making the process viable for producers and simpler for consumers is a parallel requirement for solar beams to hit the rooftops of people’s homes in the national capital.
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