BRIDGE TO INDIA hosted a webinar on 3 November 2020 to discuss recent developments in India’s residential rooftop solar market. The webinar was sponsored by Tata Power and supported by Indo-German Energy Forum.
There were six participants in the webinar:
- Tata Power: Mr. Ravinder Singh, Chief – Solar Rooftop Business
- Oakridge Energy: Mr. Shravan Sampath, CEO
- Enphase Energy: Mr. Harsha Venkatesh Director
- State Bank of India (SBI): Mr. KP Baiju, Deputy General Manager
- Bajaj Finserv: Mr. Suyog Malviya, National Lead – Business Development
- Kerala Electricity Board: Mr. Madhulal J, Senior Project Manager
Annual installation of residential rooftop systems has declined from 199 MW in FY 2017 to 93 MW in FY 2020 despite attractive central/ state government subsidy schemes and falling equipment costs. Most panellists agreed that slow progress in residential rooftop solar can be attributed primarily to lack of consumer awareness, limited rooftop space and lack of financing options. Mr. Singh from Tata Power mentioned that consumer enquiries have increased substantially over the last six months due to increased power consumption in residential segment, but conversion rate is still poor. To address health-related concerns of consumers, the companies are looking at options for remote site surveys and standard designs for reduced installation time.
Recent tenders have received bids as low as INR 34,000 (USD 453)/ kW making such systems highly affordable and financially attractive. The downside of such low prices is risk of poor-quality installations by small, local players resulting in consumer dissonance. There was consensus amongst panellists that lack of appropriate quality standards is a major risk for the market. Mr. Madhulal from KSEB clarified that their tenders include sufficient provisions to ensure rigid quality standards and compliance with performance requirements. Another challenge in these tenders relates to mandatory use of domestic modules for availing subsidies – limited supply and high prices of domestic modules have impeded growth and prevented use of more efficient, higher wattage modules.
Mr. Sampath from Oakridge Energy mentioned that their integrated financing and technical solution has been received well in the market. The panellists noted that while PSU banks offer attractive interest rates, their approval process takes a long time and is very complex. NBFCs, on the other hand, offer quick turnaround times but their higher interest rates are unattractive to consumers as rooftop solar is not an impulse purchase. There is huge need for innovative financing products meeting unique requirements of this market. SBI acknowledged that financing rooftop solar is a challenge for the bank due to small ticket size of loans. The bank is keen to consider financing aggregated portfolios. The bank is in discussion with World Bank for a credit line of about USD 200 million dedicated to residential rooftop solar market. Meanwhile, Bajaj Finserv mentioned that they do not have standard products for this market but are keen to partner with large installers for a bundled offering.
Mr. Madhulal highlighted KSEB have shortlisted 42,000 consumers for installation of 200 MW capacity, of which 46.5 MW has been allocated to installers. The state has another 150 MW tender in pipeline.
Mr. Venkatesh from Enphase Energy emphasised significant safety and reliability benefits of microinverters for household consumers. He stated that while consumers are attracted by low EPC prices quoted by inexperienced ‘fly-by-night’ installers, they are willing to pay a premium for higher quality products as seen in other part of the world.
Overall, there is great optimism about prospects of the residential rooftop solar market. 833 MW of subsidy has already been sanctioned by MNRE. As COVID-related constraints ease and more financing solutions become available, the market should grow rapidly in the coming years.