National portal for rooftop solar
Reimagining the solar subsidy programme of india
1. What is the most effective tool for the successful implementation Of decentralized solar in India?
2. How can India fastrack its pace to achieve the 40GW rooftop solar target by March 2026?
3. Is solar rooftop popular enough among Indian households?
and the list of questions continues…
To solve for these and help scale rooftop solar among residential customers, the government of India has taken a historic step by reimagining the entire Solar Subsidy Program.
“Hon’ble Prime Minister, Shri Narendra Modi, on July 30th, 2022, launched the new and simplified programme for rooftop solar phase II under which a National Solar Portal has been created through which any Indian consumer can apply for solar net metering and subsidy.”
In the words of our Prime Minister, “Bijli Bachaana, Desh Sajaana!”.Let’s look at how we can save electricity for a decorated future of our country.
A brief overview of why we need this policy at all.
To popularize rooftop solar amongst homeowners and achieve the set target, residential consumers are offered financial assistance in the form of subsidies for which the state electricity utilities/DISCOMs had been appointed as implementation agencies. Under the grid-connected Rooftop Solar Subsidy Programme, residential consumers were eligible to avail a capital subsidy of 20/40% for system sizes up to 10kW. The subsidy was disbursed via state DISCOMs/state nodal agencies through periodic empanelment tenders where rate discovery was also done. Final price of the system was determined by reverse L1 rate bidding.
However, there were several implementation challenges owing to which many consumers have not been able to take advantage of the subsidy scheme. A summary of the key challenges that led to slower growth in the residential solar segment despite the very attractive capital subsidy scheme is given below:
Subsidy disbursement capped at the price of the system discovered through solar rooftop tenders/MNRE benchmark rates (whichever is lower): Solar rooftop tenders led to the discovery of extremely low selling prices for the rooftop solar systems due to various reasons.
One such reason was the capping of rooftop solar system rates by the rates determined by MNRE as benchmark rates for various system sizes. The rates determined by MNRE did not represent the current system costs as these were fixed for around a year while the costs of materials in a system kept increasing in the same period.
Thus, vendors quoted very low selling prices and indulged in malpractices such as invoicing customers separately outside the tender rates. All the above also led to high occurrences of poor-quality systems getting installed and many projects not being completed to the awarded capacity.
Lack of Consumer Choice: As with other “consumer products”, residential rooftops should also be offered with an array of features for the customer to choose from. For example – string inverter versus microinverter, the height of the system, the rooftop can be designed as a Pergola to make the terrace space useful and aesthetic, waterproofing of the rooftop system so that the space can even be used in rain, use of Solar Tiles, etc.
To solve the above problems, National Solar Portal has come as a game-changer for the residential sector. Let’s look at the “How” of it…
Let’s first look at the details of the policy:
Under the national simplified subsidy scheme, subsidy amounts have been fixed by the government as per the following slabs which are standard across all states and UTs of India.
The CFA/subsidy will be released after clearance by the inspecting authority (DISCOM) on the successful commissioning and installation of the metering system as per the specified procedure.
The CFA/subsidy would be calculated based on the total solar module capacity/ solar inverter capacity/ capacity approved by DISCOM, whichever is lower.
DISCOMs need not invite tenders, discover rates, and impanel vendors. In addition to this, the vendors need not wait for the release of subsidy from the Ministry, rather they can get the full amount from the consumer as the consumer will be getting subsidy directly into his bank account.
A revolutionary step for the solar industry and its stakeholders…
The scheme is a Direct Benefit Transfer (DBT) scheme wherein consumers will get the subsidy credited to their bank account within 30 days after installation and commissioning of their rooftop solar system.
Some of the benefits of this scheme include hassle-free online applications, freedom for consumers to choose any solar company that is empaneled in their DISCOM under the DBT scheme, tracking the progress of applications on the national solar portal in real-time, direct disbursement of subsidy to consumer’s account within 30 days of installation and commissioning of the solar system, provision of 5 years of after-sales and maintenance services to their consumers by the solar company, etc.
Special focus by the government to protect the interests of the consumers. A vendor will have to get registered at the DISCOM and maintain the rooftop solar system for at least 5 years.
The new scheme offers enhanced choices for the customers with the removal of the ceiling rate for the selling price. Customers can now customize their rooftop solar solutions and opt for better-quality components.
Here are the subsidy calculation parameters:
|System Capacity||Subsidy Available|
|Up to 3 kW||₹ 14,588/kW|
|Above 3 kW and up to 10 kW||₹14,588/kW for the first 3kW; thereafter, ₹7294/kW|
|Above 10 kW||₹94,822 fixed|
*All information provided including financial data (like pricing, return on investment), etc., is for the purpose of broad understanding and is not precise. Please consult your authorized financial advisor for financial advice. Fenice Energy does not intend to provide financial advice and undertakes no liability for the same.
There are 3 main eligibility criteria for getting subsidy:
- You can get a subsidy for your solar system by using India-made panels approved by MNRE
- It is only available for On-grid solar system and Hybrid solar systems
- If you’re a homeowner, you can enjoy a subsidy for up to 10 kW residential solar projects.
Therefore, the total estimated cost for the solar systems including subsidy will be:
|Estimated Cost (₹)
|Applicable Subsidy (₹)||Estimated Cost (₹)
*Note: Tax is not added in the above calculation
Ministry of New and Renewable Energy (MNRE) sends the subsidy straight to your bank account within 30 days of your local electricity distribution company (DISCOM) inspection. No more waiting or complicated processes. Enjoy the benefits of clean energy hassle-free.
*All information provided including financial data (like pricing, return on investment), etc., is for the purpose of broad understanding and is not precise. Please consult your authorized financial advisor for financial advice. Fenice Energy does not intend to provide financial advise and undertakes no liability for the same.
Simplification of getting empanelment and working under subsidy schemes for the solar companies:
- Any solar company can now pay Rs. 2.5 Lac Bank Guarantee to get registered in a DISCOM. With this, the company gets eligible to install subsidized rooftop solar systems for consumers in that DISCOM under the National Subsidy Scheme.
- Vendors will also get access to provide their information and rates on the National Portal so that any consumer willing to install rooftop solar can contact them and get the rooftop solar installed through mutually agreed rates.
A glorious moment for the Indian Solar Industry for achieving a public policy tool that will:
- Accelerate market driven growth for the solar industry.
- Improve consumer choice.
Ensure better quality and performance of the solar systems installed.
It is, thus, the Aladdin’s magic lamp for the solar industry- with more solar companies willing to get empaneled, states will be able to meet their allocation targets and consumers will get better and enhanced choices.