Solar Rooftop’s Installer’s  Meet ( 25-07-2015)

The government has announced massive plans to expand solar rooftop in India from 400 MW currently to 40,000 MW by 2022 , a 100 fold increase. However do we have a strong, uniform and coherent industrial voice to provide the right guidance and impetus to the government and the industry as a whole? Do we have a unified platform to bring together the prominent stakeholders to discuss ways and means to turn this massive opportunity into a booming reality?

The answer is sadly NO! It is this need that Solar Mango endeavored to address by bringing together about 25 system integrators from 6 to 7 cities with operations ranging from small to large scale onto one platform, for India’s first rooftop solar installers meet.

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The idea was to discuss, deliberate and  ascertain what are if not all but atleast some of the answers to the following questions:

• What are the most critical challenges the Industry is facing today?
• What are work arounds needed to address these challenges-both at a government and industry level?
• What are the potential innovations and opportunities this sector has to offer for budding and established players in this nascent market?

This blogpost will bring together the industry insights and views gathered during the meet and will serve as the initial steps towards building a sound momentum to take this goal of 40,000 MW to fruition.

Also check out: EAI Consulting for Solar Energy – Solar PV & Solar Thermal

 Critical challenges the Industry faces today:

• Unreliable policies especially subsidies and net metering is hurting the market and influencing consumer behavior. Consumers most often ask the System Integrator to factor in the subsidy into the overall cost and with the inconsistency in receiving subsidy on time, this becomes extremely challenging for smaller players.
• New players entering into the market with a hope to capture some portion of the pie are affecting the quality and hence the overall perception of the industry. Improper installations, poor quality of inverters and lack of reliable after sales service has created far more liabilities than assets for the industry.
• With no set benchmarks ,proven best practices, standards and processes, the industry is yet to see the maturity levels that other industries such as wind and thermal have achieved.
• Certain pockets of the government especially field level personnel such as Assistant Engineers (AE) are poorly trained on important aspects of solar rooftop such as net metering thus making it difficult for system integrators and customers to efficiently and smoothly complete projects.
• Battery backed systems pose great threats in its current form with frequent maintenance issues and hence should be implemented for projects where grid connectivity is absent or unreliable.
• TANGEDCO has shown reluctance to supporting growth of solar for fear of loss of revenue. This has led to delays in critical elements such as procurement of net meters.

Potential steps towards addressing the challenges the industry faces

• Implementation of  a uniform policy of subsidy and net-metering for rooftop solar across all states will reduce confusion and increase investor confidence. Within this, Net Metering for industries should be taken up as high priority as without Net Metering, these entities stand to waste significant amounts of power during weekends
• To tackle issues of sub-standard quality of products and unreasonable pricing, a powerful body such as a Solar Association of Rootop Installers is necessary to maintain checks and balances on price and quality to protect all stakeholders.
• Energy as a service ( Renewable Energy Service Company-RESCO) is going to play a prominent role in financing solar rooftop services. However clear and firm guidelines on how LT customers will be able to sell electricity to the grid is needed for this model to succeed.

• Financial models such as BOO or BOOT though a great solution to the financing bottleneck, will be successful if there are:
  • Clear net metering policies in place
  • A credible certification mechanism to ensure credit worthiness of the consumer, perhaps credit rating from professional agencies for smaller businesses
  • Longer tenure loans

• Common Service Centres (CRC’s) that will cater to providing system installation, repair and maintenance services for a group of installers. This will help improve serviceability and also bring down overheads for companies.
• The government has removed capital subsidies for industrial and commercial sectors and maintained a subsidy cap of 15%( Rs 11,250 on a bench mark cost) for residential and institutional customers. Though a good move considering that subsidies were hurting solar companies, a transparent online adhar-card linked mechanism of payment to the beneficiary is very important to avoid delays.
• The government should consider providing depreciation benefit to residential customers and include a provision for removal of VAT on the solar installation. This will help increase the business case for solar tremendously.
• 10 banks have come forward to fund and support solar rooftop projects in the country. The secretary of MNRE has pledged that they will push banks if they fail to oblige on their commitments.
• A major concern for banks if the due-diligence for solar rooftop plants. One potential solution is to find ways to build a strong second-hand solar market so that banks have some exit route incase the customer defaults.
• Several installers quoted huge electricity bill savings ( Bill reduction from Rs 3500 to just Rs 20 for one such customer as expressed by a installer) upon installation of rooftop solar PV. What is needed is more aggressive awareness and campaigning amongst the funders and end customers to bring these success stories and also address common concerns to build credibility about this sector.

Opportunities in the Solar Rooftop Sector:

• Single or Partnership Owned Firms present a good opportunity due to quicker decision making and almost no hierarchical structures. Empirical evidence from prominent installers confirm this fact.
• The banking sector, especially private sector banks with large number of rural branches with uninterrupted energy requirements are a good sector especially because if adopted by one, it can quickly scale to the remaining. Same is the case for other similar sectors with a chain of outlets.
• Attractive value adds in the form of increased aesthetics and utility will make solar a desirable and sexy product to buy. This is still a fairly blue-ocean market that could propel the sector especially for higher net worth clients.

Also check out: EAI Consulting for Solar Energy – Solar PV & Solar Thermal

Key Takeaways:

• A uniform, clear and coherent policy exclusively for rooftop solar especially in regards to net-metering and subsidy will remove several bottlenecks and make doing business easier.
• Proper awareness and knowledge building amongst the following three most important entities is crucial to the success of rooftop solar:
  • Government entities such as SNA’s, field personnel etc
  • Funding Agencies such as banks and NBFC’s
  • End Consumers such as industries, hotels, builders and residential owners
• To bring together both of the above points to fruition and also ensure smooth functioning of this nascent growing market, an Association of Solar Rooftop Installers is vital. This will serve as a powerful body to regulate and provide necessary support to the various stakeholders of this industry.

These are the key points that came out of this highly productive and successful meet. We are anxious to hear your comments and suggestions on this blogpost. Following this, we  hope to translate it into in a whitepaper by the end of August,2015 to be submitted as a powerful decision making tool to MNRE.

UPDATE 10 AUG 2015

We had circulated the above details to all attendees, and they had got back with more suggestions / feedback. They follow:

Suggestions and Comments by delegates of the Rooftop Solar Installer’s Meet:

1. “On the standardization of the policies, I would like to propose that we add “Developing a national standard guideline for Rooftop Solar PV to the grid, vis-a-vis, technical requirements, interconnection regulations, limits (if any) on feeder capacity limitations along with technical justifications, and financial compensation for net exports to the grid.”

2.”On the subsidy front, I would like to suggest that subsidy be converted to income tax deductions for all private taxpayers installing RTSPV. The tax deductions should be akin to the AD benefits that can be availed by profit making entities and should come with the facility to accumulate losses until complete recovery. ”

3.”On the financing font, suggest that we include requiring banks/financial institutions to establish “Automatic Qualification Criteria” for existing customers for whom, upon application for financing, the banks will commit to automatically finance the RTSPV. The banks can determine apriori the risk level appetite for setting the bar for customers under AQC.”

4. “Is it possible to have a one-stop database of reliable vendors for ‘solar components equipments’ to be shared in this forum? Also  is it possible to have a  list of solar integrators interested in EAI  activities?”

5. “Like we proposed Customer Service Centres, we may also propose District Level Councils with all the Solar Operators in the District being members who can meet, discuss and take up the matters with the District officials with regards to quality of power, permissions, quality issues of roof top systems etc. This has added advantage because the District Level officials esp. Collector can be met and redressal obtained.
It is also possible that the Collector if enthusiastic would help in organising things which enable the Solar industry to grow.”

Will be glad to get any other suggestions. Can be sent to narsi [at] eai [dot] in

Rooftop solar installation companies that had attended this meet

List of attendees

Also check out: EAI Consulting for Solar Energy – Solar PV & Solar Thermal