Indian residential rooftop capacity will increase by around 60% in FY 2023, according to a report released by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics. The three most attractive states for rooftop solar installations as per the document, are Gujarat, Haryana, and Maharashtra.
“The Indian residential rooftop solar segment is at the cusp of a robust growth phase. From the 2 gigawatts (GW) cumulative installed capacity (as of fiscal year (FY) 2022), the residential market will likely reach 3.2 GW by FY 2023,” said the report’s co-author Vibhuti Garg, Director – South Asia, IEEFA
The increasing need for cost saving, growing consumer awareness, and the strong push from the centre have helped in boosting rooftop installations in the residential sector.
Moreover, the introduction of the National Rooftop Portal by the Indian government to simplify the process of applying for rooftop solar systems and tracking the direct transfer of subsidy funds for residential consumers is set to further increase demand.
“India has more than 300 million households and is endowed with abundant sunshine almost throughout the year, with an annual average of 300 sunny days. This shows that the potential for rooftop solar installations in residential spaces is huge in India. We expect the growth of residential rooftop solar installations to accelerate in the near term across India because of the strong policy push and resurgent market demand” says Vibhuti Garg.
The report also highlights the change in consumer behaviour and demand post covid-19. The lack of consumer awareness acted as a huge impediment to the adoption of solar in the past. However, post the pandemic, the demand for solar has shot up due to the rising consciousness about cost savings and the environment.
The report further adds that the Indian rooftop solar market has been the least expensive in the world for about a decade now. In 2020, the average cost of residential rooftop solar installations was around $658 per kilowatt (kW), (over ₹54,000)-a steep 73% decline from 2013.
However, in the leading solar markets such as Japan, the USA, the UK, and Switzerland, the cost of solar systems was 3.3- 6.4 times higher.
Additionally, the report also highlights some policy challenges at the state level. Delays in the approvals of net metering, delays in the release of subsidy payments by the DISCOMs, and the lack of proper communication of benefits are the major hurdles in the growth of rooftop solar installations.
“Concerning the residential solar regulations, all state electricity distribution companies must grant net metering approvals to the consumers within a strict and short timeline. In the case of residential rooftop solar systems, DISCOMs, in general, need to be restricted to carrying out two activities: inspecting solar plants and selling the net meters,” says co-author Akhil Thayillam, Senior Research Associate, JMK Research.
Moreover, the increase in overall system cost and the lack of financing options were cited as additional challenges faced by the residential solar segment.
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Resource: The Economic Times