SECI issued a new tender in February 2019 for development of 97.5 MW grid-connected rooftop solar projects. These projects will be developed on pre-identified government buildings across all 36 states and union territories under CAPEX and OPEX modes (12.5 and 85 MW respectively). This is the first rooftop solar tender issued by SECI after the not-so-successful 1,000 MW tender in December 2016.

• The basis of classification of states into different zones is not clear as the difference in tariffs between states with similar solar irradiance is steep;
• Lack of pre-feasibility study may again delay execution;
• PSU rooftop solar market has not achieved its potential due to on-site execution challenges and poor coordination between different government agencies;

States are classified into four different zones. States within the same zone will have a single ceiling tariff. Projects will be awarded through competitive auctions. Bidding will be conducted on a zonal basis instead of state-by-state.

Highest identified capacity is in Karnataka (7 MW) followed by Delhi and West Bengal (6 MW each). Average installation size is 269 kW across 362 sites. Bidders can avail capital subsidy up to INR 13,750/ kW (for zones 1-3) and INR 33,000/ kW (for zone 4) as per the latest MNRE notification.

Figure: Zonal classification of states

The basis for classification of states is not clear. States with similar solar irradiance such as Karnataka and Andhra Pradesh have been slotted into different zones.

Figure: Zone-based allocation capacity and tariffs

Source: SECI

SECI’s 1,000 MW tender failed to get desired results (only 226 MW actually allocated) because of lack of prior site assessment and poor coordination with the site owners. Commissioning was also delayed due to the long-drawn PPA signing process. We are, however, not sure if the correct lessons have been learnt. Site assessment has again been left to the bidders. Moreover, the site owners are required to bear net-metering charges, which may again delay commissioning of projects. Bid submission is also delayed due to the ongoing general election.

PSU customers account for only 15% of the total rooftop capacity. Despite the huge potential, this market has failed to take off due to execution challenges and poor coordination between different government agencies.