3 solar takeaways from 2018 CEEW REdialogue

This year’s CEEW REdialogue 2018, held in New Dehli on 28 and 29 June, focused on market creation and trends. The event saw the release of independent studies on scaling rooftop solar; discussed clean energy investment; and addressed renewable energy curtailment, and risks in renewable energy markets in emerging economies.

The dialogue offered a platform for engaged deliberations on the role of different stakeholders in advancing renewable energy deployment, balancing both domestic priorities and international mitigation ambitions and commitments. It brought together several national and international stakeholders from the renewable energy community to deliberate on the drivers and challenges facing the sector, both in India and globally.

Key speakers included: Montek Singh Ahluwalia, Former Deputy Chairman, Planning Commission; Upendra Tripathy, Interim Director-General, International Solar Alliance (ISA); Praveen Kumar, Additional Secretary, Ministry of New and Renewable Energy (MNRE); Pankaj Batra, Member, Planning, Central Electricity Authority (CEA); and Paolo Frankl, Head, Renewable Energy Division, International Energy Agency (IEA); among others.

pv magazine spoke to three key figures at the event, to get their take on various solar issues affecting the Indian market.

1. Solar performance in India

Discussing the performance of India’s solar sector over the past year, Arunabha Ghosh, founder-CEO of the Council on Energy, Environment and Water (CEEW), said:

“A year ago, there was a lot of enthusiasm as tariffs for both wind and solar fell to historical lows. In the intermittent 12 months, there has been a little bit of slowdown as rates have been contracted out. At the same time, there have been positive developments as well.

“For the first time, renewable energy investments have exceeded investments in thermal power. There is a new push towards electric vehicles, etc., which will open up the market opportunity for rooftop solar PV projects. So there is some slowdown and reasons for caution, but some encouraging signs too.”

2. The deferral of solar auctions

Explaining the reasons for the deferral of solar auctions, Kanika Chawla, Senior Programme Lead at the CEEW told pv magazine:

“Most of the central government tenders have been oversubscribed, several times. The central government tender (like from SECI and NTPC) activity has slowed down, but when these tenders are floated there is a lot of interest. However, for state government tenders it has been a little bit hit-or-miss.

“The reason is: Unlike central government, states are not able to receive low bids. That’s because state-level DISCOMs don’t offer the same credit-worthiness as offtakers. As a lot of states have not been able to get the price they want, they cancel the bidding, postpone it or reschedule it. That’s really upsetting for solar PV developers as they have done a lot of preparation and have spoken to investors.”

3. Poor uptake of rooftop

Hero Future Energies CEO, Sunil Jain went to to talk about why there has been such a poor uptake of rooftop solar PV:

“It’s not always that what the centre proposes, states dispose. In the meantime, power market growth suddenly went down as system efficiencies improved and demand came down because GDP growth was driven more by services sector, rather than manufacturing. In order to control their losses, states started reacting as all commercial and industrial (C&I) and even high-end consumers are high paying. States didn’t allow rooftop segment to flourish. They started putting up hindrances. While policies were in place, these were not allowed to be implemented.

Further, government’s subsidy scheme was designed in such a manner that the probability of risk was very high. Therefore people were very cautious in moving forward. A case in point is SECI’s two 500 MW schemes, which really have not picked up. Even though people took the orders, signed Power Purchase Agreements (PPAs), etc, actual on-ground implementation is only 30 per cent.

“The other part of the story is from consumers’ side. Consumers are seeing that solar tariffs are falling continuously. When they hear the tariffs of 2.4-2.5 INR, they start believing that they will also get that tariff, which is not true. Tariff continues to be 4.5 INR or so as rooftop solar power generation is lower, cost is higher and scale is smaller. When this happens, people decide to wait until prices fall further.

“As the programme delayed, the government has started focusing only on subsidy part and left C&I segment to fend on its own. A case in point is Maharashtra government refusing to give net metering connectivity to 1 MW rooftop power plant in the state. Thus large-scale rooftop solar projects come to a standstill.

“Another point that developers thought of a risk was falling tariff. If today I install a solar system on somebody’s rooftop at 4.5 INR tariff, there is no sanctity of the signed PPA that the consumer will honour it as some other developer may come tomorrow and offer to put a system on the consumer’s rooftop at a tariff of 3 INR  only.

“We suggest the Indian government to devise a model PPA for rooftops that is valid throughout the country and has the backing of Ministry of New and Renewable Energy (MNRE) as a PPA.

“In residential rooftop segment, the growth of solar depends on the demography of the country.  In India, roofs of middle-income houses are very small and don’t have sloping design. In Germany, sloping roofs make it easier to install PV panels and don’t obstruct sunlight.  Also, Germany has a policy of feed-in tariff, which is like an income scheme for consumers. There, you could finance your rooftop solar system with EMI paid from the income you earn from selling power.

“In India, no banker is willing to finance rooftop. Ideally, it should be an asset financing case like you buy a car or house and your EMI should be designed to pay from the savings accrued so that paying for the rooftop system is not a burden on the consumer.”