Gujarat A Bright Spot In India's Slow-Moving Residential Rooftop Story

The western state of Gujarat accounts for nearly two-thirds of residential rooftop solar installations in India, even as the country's pace of adoption continues to lag.

As of FY22, India had just 2 gigawatt of residential rooftop solar installations across the country, according to an analysis by JMK Research and IEEFA India. Gujarat had the lion's share with 61% of the installed capacity.

Rooftop solar's massive potential in India—that has an average of 300 sunny days—has remained unfulfilled due to a myriad of issues. The country had less than 12 GW of rooftop installations as of March 2022, much lower than the 40 GW target it had set for itself by 2022-end. Residential installations are even a smaller fraction of that at 17%.

BQ Prime had earlier reported how low consumer awareness and policy flip flops have hampered the pace of adoption. Neither government subsidies, nor rebates by city and state administrations have helped. The high upfront cost of installing panels and lack of financing options has also kept consumers away.

What Gujarat Did Different

Gujarat, however, stands apart. The state's SURYA scheme has increased adoption and helped the state add 1.1 GW capacity in just 18 months. According to JMK and IEEFA, they used a four-pronged strategy to make that happen.

First was to ensure adequate supply by building a large base of empaneled vendors and contractors. Those seeking a subsidy could get installations done from these selected vendors.

The state government also ran massive awareness campaign and disseminated information through SMS, radio spots, banner advertisements, flyers, social media and door-to-door programmes.

It created a single unified portal for rooftop solar that allowed users a one-stop shop for every process of installation from registration to availing subsidies. The state ensured timely disbursal of subsidies, the report said.

"Aggregating demand through strong public outreach initiatives has significantly contributed to Gujarat’s success in residential solar development," the report said. "The proactive participation of state government agencies, especially the discoms, enhanced the market's demand and supply aspects."

The state also benefitted from the second phase of the Ministry of New and Renewable Energy's grid-connected rooftop solar programme. About 63% of the allocated capacity under the programme has been earmarked for Gujarat. Of these, the state has already installed 60%.

Countrywide Adoption To Improve

JMK Research said growth of residential rooftop solar is expected to accelerate in the near term due to a policy push and resurgence in demand. By FY23, it expects India to have 3.2 GW of installed capacity. States like Gujarat, Maharashtra and Haryana are among those that are likely to drive the growth.

In June, the World Bank approved a $165-million credit line exclusively for India's residential solar segment. It could directly finance 450 MW of solar systems by incentivising power distributors to engage directly with residential consumers and build capacity. This will help make rooftop solar more affordable for end consumers, the report said.

"The key drivers of the demand side of the market, apart from government subsidies, are the brightening prospect of savings on electricity costs and heightened consumer awareness," the report said.

"To augment the demand of the residential market in the future, it will be critical to promote the communication of relevant and simplified information through digital media."