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Subsidies alone won’t fix India’s sluggish rooftop solar adoption

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Raghav Mahobe

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Raghav Mahobe

18 reads

While the Indian government’s new scheme to boost rooftop solar adoption focuses on lowering the upfront costs for households, experts say DISCOM participation and better financing will be key to ensuring the scheme succeeds where its predecessors failed.

February 21, 2024

10 MINS READ

Key Takeaways

  • The central government’s new rooftop solar scheme aims to facilitate installation of solar systems across 10 million households 
  • With Rs 75,000 crore earmarked for it, the scheme offers both a subsidy boost as well as 300 units of free electricity a month to encourage mass adoption of solar
  • This will go some way to speeding up India’s sluggish rooftop solar adoption, which has struggled to take off due to high upfront costs
  • While increased subsidies will lower the entry barrier, experts say improved financing options and getting DISCOMs on board are crucial for the scheme’s success

On February 13, Indian Prime Minister Narendra Modi announced the launch of a rooftop solar scheme that aims to power 10 million households across India.

Rooftop solar systems are essentially small-scale systems meant to provide electricity for individual houses and commercial or industrial buildings for their own use, effectively reducing or nullifying their electricity bills. Typically in the range of 1 kW to 10 kW for households, these can be connected to the power grid and supply any excess electricity generated back to the grid.

The new scheme, PM Surya Ghar: Muft Bijli Yojana, is hardly the government’s first stab at promoting rooftop solar installations in the country. In fact, the government is hoping that it will be third time lucky as it attempts to revitalise a nationwide grid-connected rooftop solar programme that was launched in 2014. The initial aim was to install 20 GW of capacity by 2022, a target that was revised to 40 GW by March 2026.

Despite this, India is yet to meet the original target of 20 GW. The latest scheme by the government, which has some Rs 75,000 crore in funding behind it, comes as India’s cumulative rooftop solar capacity still stands at a paltry 11 GW, with the targeted 2026 deadline now just over two years away.

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