India needs to focus on more fund generation, offering financial support before commissioning the plant, better net-metering implementation and enforcement, raising awareness, and supporting domestic manufacturing to control the cost and quality of the solar components, just like US did and allowed California to achieve the recent feat.
ven with the shackles of President Trump’s energy policy, the US has made incredible developmentwithin its green energy sector. The news of California becoming the first state in the US to mandatesolar panels on its new homes, bringing in the opportunity for the state, and, by extension, the wholecountry to harness clean technology and reduce the impact of new homes on the environment.
Although the plan has only received approval recently, and will have to wait till 1 Jan 2020 to get theeffective status, it stands as a guideline for other states in the US and other countries that areworking towards solarisation, e.g India. Let us look at the internal workings of the plan and assess itseffect to try and figure out what India can take from it.
The plan and the Support
The plan is to focus on most single-family homes as well as multi-family residential buildings of threestories or less, including condos and apartment complexes. In the same breath, we need to highlightthat California’s renewable portfolio standard, which requires power companies to have 50 percentof total energy sources from renewable energy such as solar, has helped in bringing this plan intoreality. Also, California has mandated making new buildings solar compatible, supporting this plan.
While this will add an extra approximately $9,000 in upfront residential construction costs, the planhas received support of solar trade and homebuilder associations as well as several large utilities inCalifornia. The reason behind this is the calculation of $16,251 savings that can be made in energysavings over a 30-year period, by installing solar on the roof. Also the authorities trust that as thecost of solar systems for homes have dropped considerably (more than 70%) in last 4-5 years, peoplewould be eager to take advantage of this new initiative by installing solar on their roofs.
California mandating compliance credits for the installation of battery storage technology with thenew solar compatible buildings will surely act in support of this initiative.
With expectations considering these initiatives — and highlighting that renewables accounted for 27% of total generationlast year — it is easy to identify that California’s mandate to generate half of state’s electricity from renewable sources by 2030 can be achieved. This initiative is expected to cut emissions by 1.4million metric tons over three years. Although this is a small fraction of what US generates everyyear, it can be identified as a progressive step towards change.
How India is progressing
If we compare Indian states with the US, we will see that despite subsidies, initiatives andGovernment support, states in India like Maharashtra (with 237 Mw), Tamil Nadu (with 191 Mw), Rajasthan (129 Mw),Karnataka (125 Mw) and Gujarat (103 MW) which have the highest installed rooftop solar capacity in thecountry, are far from reaching the development milestones of California. And although statistics showthat rooftop potential of the country stands up to 124,000 MW, India added only 864 MW ofrooftop solar capacity in 2017 and the total capacity stands at around 2.2 GW.
The reason behind this delay in rooftop solar growth includes delays in policy enforcement, lack ofclarity in policies, lack of flexible financing, and lack of awareness etc.Due to these issues, cities like Mumbai, Chennai, and even Delhi, which had shown promise asbecoming a favourable environment for rooftop solar growth, have failed to produce results. Delhihas an estimated solar potential of 1.25 GW, while the city’s official target is 1 GW by 2020 and 2GW by 2025, surprisingly, the city has installed only 95 MW of solar rooftop capacity. And about 3MW of that capacity is from residential installations.
Similarly, Tamil Nadu, which has Rs 20,000 subsidy in store for domestic consumers, has also beenunsuccessful in making progress. Disallowing ‘net metering’ (Tamil Nadu) and imposing a cap on thecapacity allowed for net metering (other states in India) stand as the reasons behind halted growth inrooftop solar in India. Net-metering policies that put an upper ceiling of 1 MW on rooftop solarprojects can be considered as a restriction against growth of Rooftop solar sector in India. Forexample, if the cap is 1 MW, only 1 MW capacity will be connected to the net-metering facility of arooftop solar plant. This means that if the plant is of multi-megawatt capacity, it will lose out on thebenefits of net metering out of 1 MW.
What India can learn from California
The initiative in California taken towards solarisation will definitely raise awareness and maximizesolar energy usage within the grid, making it mainstream energy faster. And since India has the sameideals to provide power for all, the country needs to invest money and take initiatives that arefocused towards growth and change in the long run. For example, we can highlight that rooftop solarstill has not surpassed the cost effectiveness of the subsidised power supplied by the electricitydistribution companies (discoms), reason being lack of commissioning, and lack of green energysupplied in the grid.Also, by focusing on processes like competitive bidding, India is losing out on new plant
developments that are low capacity (generally within KW capacity). The policies, incentives,subsidies, must be properly enforced to allow increasing investor confidence and awareness.
Surveys and polls show significant public interest in accepting solar. However, lack of awareness ofschemes, policies, details on the benefits of solar energy, has been the hurdle in the path ofspontaneous rooftop solar adoption. Although there are 300 million homes in India, only a meagrepercentage of that number has capable roof to hold solar panels successfully. Mandates to installsolar on Government buildings needs to be extended in residential and commercial buildings.
It is important to understand that California succeeded in becoming a progressive green state by raisingawareness, providing subsidies, bringing policies and enforcing mandates. India needs to follow thesame footsteps. Bringing in nodal agencies to spread awareness and involve common man can workwonders easily.
India needs to focus on more fund generation, offering financial support before commissioning theplant, better net-metering implementation and enforcement, raising awareness, and supportingdomestic manufacturing to control the cost and quality of the solar components, just like US did andallowed California to achieve this recent feat.
DISCLAIMER: The views expressed are solely of the author and ETEnergyworld.com does not necessarily subscribe to it. ETEnergyworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.
About Gyanesh Chaudhary
Gyanesh Chaudhary is the Managing Director & CEO of Vikram Solar. He is also a member of the CII and Federation of India Export Organisation (FIEO). Chaudhary is a Business Graduate from University of Wales and holds a Diploma in Marketing and International Trade from University of Boston and in International Business from Harvard Business School, USA.
Source: energy.economictimes.indiatimes
