Energetica India Magazine January-February 2021

SOLAR POWER systems, there is a massive change in the way the grid operates. Consumers who are only importers of power have now become suppliers as well. More- over, with the increased use of time-of day tariffs and technology consumers can be more reactive to pricing pat- terns with appropriate adjustments in their consumption patterns. The use of blockchain and peer to peer trading there is a real possibility for consumers with solar PV systems to trade amongst themselves. Business Models for C&I Installations The Indian rooftop solar market com- prises of two business models – Capex & Opex. From a power consumers point of view Capex is a self-financing mod - el while Opex is a third-party financing model. By the end of 2019 Opex ac- counted for nearly a third of all cumu- lative rooftop solar installations in India. Opex Model Under the Opex model, a renewable energy service company (Resco) funds, builds and maintains a rooftop or onsite solar power plant. While the end-con- sumer pays for the power generated under a long-term power purchase agreement (PPA) at an agreed tariff for a fixed period which is typically 15-20 years. The use of Opex has increased since the last few years and is preferred model for entities who do not wish to in- vest in the operations part of managing the plant. PPA tariff for projects installed under Opex model have been on a con- stant decline with falling module prices & advancement in module output effi - ciencies. Defer or Capex Model Capex model covers more that half of the C&I rooftop installations in the coun- try. It is the first model to be used in roof - top solar installations. Under the capex model the client makes the initial in- vestment and owns the installation. The investment made on the installation by the client is recovered through electric- ity generated by the plant over a period of 3-5 years. O&M costs are incurred by the consumer. Another emerging model is the deferred capex model where a consumer pays down payment for the installation and EMI’s spanning 3-7 years. Challenges Uncertainty in policies Policy changes have been one big reason hampering the growth of solar rooftop installations in India. DISCOMS view roof-top solar as a viable threat to the monopoly they hold in the market. Roof-top solar reduces the billing gen- erated by high-paying consumers to the DISCOM’s, hence they do not wish to lose out on these consumers. Similarly, the government introduced net metering for rooftop projects on loads upto 5KW. Net metering is a vital policy where con- sumers can sell their excess generated power from solar rooftop with their DIS- COMS. Net metering caps of rooftop solar projects should be increased for the segment to grow. The current net metering cap is restricting the growth of solar rooftop. Removal of caps on net metering will encourage more commer- cial units to adopt solar rooftop. Bank lending for solar rooftop projects The government needs to push lending into the roof-top solar sector. Current- ly, the banks do not offer rooftop solar specific loans. These loans are only of - fered when the property on which the solar rooftop is proposed to be offered as collateral. We need a dedicated fa- cility setup through one of our existing central government PSU lenders which will enable rooftop projects to be used as collaterals and that alone to finance such projects. 47 energetica INDIA- Jan-Feb_2021