The rooftop solar capacity in the past five years increased to 11.1 GW as of December 2023 from 1.8 GW as of March 2019. The growth was driven mainly by commercial and industrial customers. However, the capacity fell short of the 40-GW target set by the central government.
The pace of installations in the rooftop solar segment has been constrained by various implementation challenges including delays in providing approvals by the state distribution utilities, lack of adequate financing avenues, and lack of awareness among consumers. The new scheme is expected to address these implementation challenges. Moreover, consistency in net metering regulations across the key states remains important, finds ICRA.
The ‘Pradhan Mantri Suryodaya Yojana’ targets installing rooftop solar projects in one crore houses, enabling these households to generate up to 300 units per month and achieve savings in electricity costs. REC Limited has been appointed as a nodal agency for implementing this scheme across the country.
The rooftop solar projects under this scheme funded through subsidy support from the government, are expected to create a 20–25-GW demand opportunity for domestic solar module OEMs and system integrators over the next two to three years.
While the detailed guidelines for the scheme are to be notified, the states and Union Territories are expected to be divided among eight central public sector undertakings (CPSUs), which will take up the rooftop projects under the Renewable Energy Service Company (RESCO) model. The capex for these will be met through capital subsidy from the GoI and balance through debt funding tied up by the CPSUs. The investment by the CPSUs is to be recovered through the sale of surplus power generated by these rooftop projects to the discoms. However, timely implementation remains key to the scheme.
