Webinar Insights: “Emerging Rooftop Solar market trends in India”

Between April 2020 and February 2021, India added about 1.8 GW of Grid-connected Rooftop Solar capacity[1]. As per MNRE, the cumulative installed capacity, as of Feb-2021, is just 4.32 GW. Clearly, the country still has a long road ahead to reach its national Rooftop Solar target of 40 GW by 2022. Confronted by numerous challenges, the BTM (Behind-the-Meter) Solar market, however, continues to cut through the headwinds as it adopts new and innovative solutions across multiple facets of the industry.

With the intent to understand the ongoing as well as anticipated developments in this sector, JMK Research organized a webinar on “Emerging Rooftop Solar market trends in India” on May 7, 2021. The eminent panellists for this session were:

  • Mr. James Hou, Head of Sales – India & SEA, Goodwe
  • Ms. Ritu Lal, VP, Amplus
  • Mr. Shriprakash Rai, Senior Director & Head- C&I Business, AMP Energy
  • Mr. Karan Chadha, Head-Sales & Project Development (Pan-India), Fourth Partner
  • Mr. Abhinav Goyal, Energy Consultant, World Bank

Mr. James Hou noted that the penetration of RTS (Rooftop Solar) market in the C&I (Commercial & Industrial) segment would continue on account of rising grid power prices for the respective consumers and declining cost of solar power. Mr. Hou commented that in 2020, the RTS market was not as adversely affected by the covid-induced disruption as the utility-scale solar market, also adding that on a Y-o-Y basis, substantial growth of the former is not expected in 2021. In terms of technical requirement, with the market becoming more price-sensitive, it is noted that the demand for DC Y branch connector is growing which helps to reduce customer investment on DC cables. Further, on the cost-savings subject, increasing number of RTS clients in India have shown interest towards AFCI (Arc-fault Circuit Interrupter) feature which warns and interrupts potential fire accidents at solar PV plants.

Ms. Ritu Lal conveyed her thoughts regarding the impact of covid pandemic on the RTS market by stating that just as how the 1st covid wave challenged the operations of the market, the 2nd wave has been doing it, but with a graver impact. However, it was later pointed out that the market would undergo a definite rebound in the coming months due to the much anticipated growth in demand. Being highly optimistic about the market’s short-term prospects, Ms. Lal relayed current client-side preferences centred on expediting the process of proposed RTS projects. She observed that the market’s high sensitiveness towards price (amplified further by covid-induced disruption) is the critical factor which is driving the C&I clients, even amidst the pandemic, to go for the cost optimization route involving solar power generation. In the residential segment, there lies a significant potential which, if utilized, could lead to the segment occupying 10-15% share in the overall RTS market.

Mr. Karan Chadha asserted that the premise of RTS of optimizing electricity cost while meeting the corresponding sustainability goal is still fundamentally strong and will continue to be so in the future. It was highlighted that the growth of RTS, especially in the C&I segment has been, more or less, ‘flat’ in the last few years due to different policy intervention headwinds. Speaking on the recent as well as potential tailwinds for the industry, Mr. Chadha mentioned that there are three trends that need to be considered: 1) Increasing relevance of sustainability and ESG parameters amongst organizations, 2) Technological advancements in terms of PV modules, integration of battery storage system and RTS, 3) A middle ground approach likely to be taken up by discoms i.e. permitting net metering facility for RTS users but by charging the latter with a certain extra cost. He also opined that an additional 25-30% decline in battery price would result in cost of solar+battery system to be at parity with utility tariff.          

Mr. Shriprakash Rai concurred with the viewpoints of the speakers before him as he expressed that despite the pandemic hit, the market would continue to grow as adoption of RTS system makes economic sense to the C&I segment. This still holds/ will hold true, as he stated, with the price increase of various raw materials (e.g.: polysilicon) and with introduction of the anticipated custom duties next year. The consequent rise in tariff is expected to be about Rs. 0.30-0.50 per kWh. Pivoting to the technology aspect of the market, Mr. Rai noted that the trend of using mono-PERC, Bi-facial modules have emerged in RTS plants. In regard to BTM ground-mounted PV systems, the application of trackers has been trending lately, especially in systems with capacity of 3-4 MW. He further seconded the opinion that integration of battery with RTS plant is one of the key upcoming trend to be looked out for. Other potential developments that is predicted to become industry standards in the near future are remote module-level monitoring and robotic cleaning (especially for BTM systems with MW-scale size). Mr. Rai also mentioned that post Dec-2020, the tariffs for a 4-5 MW on-site solar project with a PPA tenure of 25 years is in the range of Rs. 3.6-3.8 per unit. However, due to the rise in input costs of modules and MMS lately, the tariffs, now, lie between Rs. 3.9-4 per unit. Additionally, he described the 4 different mediums through which organizations can achieve 100% RE procurement. They are: 1) On-site solar power generation 2) Intra-state Open Access 3) Inter-State Open Access 4) VPPA (Virtual PPA).

Mr. Abhinav Goyal highlighted that about 75% of the loan, with respect to the World Bank’s credit line to SBI for financing GC-RSPV (Grid-Connected Rooftop Solar PV) projects, has been disbursed so far. In the 1st half of FY2021, the disbursements were impeded owing to covid-19 pandemic and post this period, the pace of the same began to increase. Mr. Goyal added that currently, the residential and MSME segments are specific focus segments as they hold huge potential to spur the growth of RTS industry. To unlock this potential, concessional credit line and a credit guarantee instrument with the Ministry of Micro, Small and Medium Enterprises are being worked upon. A guarantee would enable multiple lending institutions to lend for RTS projects, particularly in MSME segment, by taking in some of the credit risks.

Click here for webinar recording.

[1] MNRE, Programme/Scheme wise Physical Progress in 2020-21