The Delhi government has set a target to achieve 1,000 MW of solar power capacity by 2020 and 2,000 MW by 2025. To this end, it announced a solar power policy in 2016, outlining the regulations, mandates, incentives and tax breaks for the growth of rooftop solar power projects in the capital.
Delhi enjoys high solar irradiation with 250-300 days of clear sun in a year, which makes it favourable for solar power generation. However, due to land constraints, the growth of ground-mounted solar power has been restricted in the city. Thus, to harness the city’s solar potential, rooftop solar is being significantly promoted. With about 3 million households and 1.2 million commercial, industrial and other consumers, Delhi has more than 700 square km of built-up area that can be used for the installation of rooftop photovoltaic (PV) systems. In terms of power demand, the per capita energy consumption in Delhi in 2014-15 was 1,800 kWh with the peak power demand of almost 6 GW, varying by 2 GW over a single day during the summer. The difference between the peak high and peak low power demand also varies in Delhi, which is high in summers and low in winters. This peak demand curve broadly matches the generation curve of solar power systems, making solar a preferable alternative source of energy for Delhi if stored and distributed well.
Regulations and policies
The Delhi rooftop policy announced in June 2016 defines the path for efficient and economical installation of solar systems in Delhi. The policy supports all models of ownership and maintenance of solar rooftop plants including the self-owned (capex) model, and the third-party owned model or the renewable energy service company (RESCO) model. Under the capex model, the consumer makes the initial investment for the installation of the plant. Meanwhile, in the case of the RESCO model, the consumer does not pay anything upfront and signs a power purchase agreement (PPA) with the developer at a mutually agreed price to facilitate installation. In addition, a defined net metering policy is under implementation across the city. The policy has been introduced under two heads – group metering and virtual metering.
To encourage the adoption of solar rooftop on premises that cannot consume all the energy generated locally, the policy requires the discoms to provide group net metering facilities to consumers. The surplus energy generated in a building is exported from the solar rooftop plant to the grid, and can be supplied to any other electricity service connection, provided these connections are in the same discom territory. The purpose of this provision is to help maximise the utilisation of rooftop space for solar energy generation for consumers with multiple buildings and service connections.
The virtual metering facility is for consumers who do not have a suitable roof for installing a solar system. Under virtual net metering, consumers can be a part of a collectively owned solar PV system. The power produced from such a system is fed into the grid through an energy meter. The exported energy as recorded by the meter is credited pro rata to the electricity bill of each participating consumer on the basis of their ownership.
The regulation also specifically mandates the deployment of solar rooftop plants with net metering on all existing, upcoming and proposed buildings of government organisations as well as government-owned/aided buildings. These buildings must have a minimum shadowfree area of 50 square metres for solar plant installation. The deployment of solar plants on all state government properties will be carried out within the operative period of this policy. The government departments that fail to meet the timeline will be required to submit a written explanation.
In addition, with net metering, the policy aims to make solar rooftop installation easier for residential and commercial users. In line with this, the state has removed the obligation for users to seek permission from municipal corporations or urban development bodies to install solar plants on buildings. In fact, the government has introduced a generation-based incentive (GBI) of Rs 2 per unit for domestic households installing solar rooftops on a first come, first served basis for three years starting from January 2016. The minimum generation from a solar power plant to be eligible for GBI is 1,000 kWh. Moreover, the height of the module structure carrying solar panels is not counted towards the total height of the building as permitted by building by-laws, except near airports where building regulations issued by the Airports Authority of India are in place.
Other benefits of rooftop solar include exemption from electricity tax on solar generation whether used for self-consumption or supplied to the grid. In other words, tax is only applicable to the net consumption charges billed by the discom at the applicable rate. Also, there are no open access charges levied during the operative period of the policy if the solar electricity is generated and consumed within the state. There are also no wheeling and banking charges for solar plants commissioned during the operative period. All solar power systems in Delhi have to be treated like “must-run” power plants and will not be subjected to merit order rating/merit order despatch principles.
The Delhi Electricity Regulatory Commission (DERC) has also decided to withdraw any cross-subsidy charges and surcharge for solar plants commissioned during the operative period of the policy. In addition, solar appliances such as inverters and energy meters purchased for the installation of solar plants in Delhi are exempt from value added tax.
According to the policy, the generating entity can retain the proceeds from the carbon credits, if any, after obtaining approval from the Clean Development Mechanism Authority.
The installation of rooftop solar power plants in an overpopulated city like Delhi is not an easy task as most people live in houses with shared rooftops and determining rooftop rights becomes difficult. They are not able to come to an agreement on the installation- ownership- and investment-related issues of a solar plant.
A key drawback of solar plant installations is the falling energy generation prices. The discoms are not keen on signing new PPAs with generators due to the falling prices of solar power generation and the losses they are incurring in existing agreements.
Grid instability and variability of solar are other challenges for the adoption of rooftop solar. Different quantum of energy is being fed into the grid and there is a mismatch in the energy demand and supply, which disrupts the stability of the grid. Moreover, sunlight is available only during the day and thus, proper collection and storage of surplus energy generated during peak irradiation and proper transmission at evenings has been a major cause for concern for the authorities. A proper scheduling and forecasting policy for solar energy in Delhi to avoid the various daily and seasonal variations is yet to be announced.
Lastly, the regulatory gap due to the lack of proper implementation of policies needs to be bridged to achieve the specified targets.
Delhi has the potential to become a leading solar rooftop power generator in India. According to Bridge to India estimates, the city has a rooftop solar potential of 2.5 GW, of which 26 per cent is in the public sector, 25 per cent in the commercial/ industrial sector and 49 per cent in the domestic sector. In order to achieve the set targets, both the government as well as consumers need to appreciate, implement and execute the relevant policies.
Based on a presentation by Abhishek Moza, Deputy Secretary, Delhi Electricuty Regulation Commission