By Shreyas Gowda, Senior Vice President, Oorjan Cleantech
With one of the most ambitious green energy missions, India is targeting up to 500 GW of non-fossil fuel capacity by 2030. Decarbonising the country’s electric power sector is seeing sped-up movements. The apparent centrepiece of these efforts has been rooftop solar and utility-scale projects, but another highly promising and vital segment not been zeroed in-are open access solar installations. This model, allowing large electricity consumers to purchase energy directly from solar power producers without going through conventional distribution companies (discoms), could potentially transform India’s energy transition. However, it is not used much because of policy bottlenecks, inconsistent regulations, and scant public awareness. It is precisely the kind of attention that this segment must get in India’s renewable roadmap.
Open access solar presents a win-win scenario. It offers an economically affordable and eventually sustainable option to the grid electricity that is now generally expensive and carbon-intensive, for large commercial and industrial customers. For solar developers, it guarantees consistent demand. It also helps in providing long-term contracts, essential for the financial sustainability of solar developers. In addition to that, it is open access, which may become a significant contributor at the national level in lessening the carbon footprint of high-energy-consuming sectors without much public capital investment. Notwithstanding these attractive characteristics, open access for solar remains a niche play, embraced only in some states called progressive and by a very few large enterprises.
The reasons are multifactorial. The foremost, however, is that regulatory inconsistency across states has been a great discouragement. Whereas some states like Karnataka and Tamil Nadu welcomed open access with fairly liberal policy choices, some have placed severe surcharges, banking limits, and procedural hurdles that completely neutralise the gains in going solar. Usually, open access becomes economically unviable, especially for small and medium enterprises, because of cross-subsidy surcharges and additional surcharges along with very high wheeling charges. The lack of a uniform national framework continues to create anxiety for both developers and buyers alike.
Moreover, a very crucial factor is indifference from state discoms. Open access displaces the foundation of the traditional electricity distribution model, which implies that the entire axis of revenue flows proposed is so disturbed that it breaks down because it was created to presume that all consumers would use local utilities. Therefore, when some consumers, particularly the high-paying commercial consumers, who usually subsidise the residential and agricultural tariffs, leave the system, the revenue flows seem to be locked up. The result is that very often there are delayed approvals and opaque processes besides flipping back on policies which would discourage potential investors and consumers. Such practices are allowed to continue by people in authority due to the absence of clear mandates and accountability systems from central authorities.
Further, there has been less awareness of open access solar among mid-sized businesses and industrial clusters, as well as some state-level policymakers. Most potential consumers are ignorant about the operational and financial benefits or scared of the perceived complication of navigating through the regulatory framework. Capacity-building initiatives and knowledge dissemination will be instrumental in unlocking demand and promoting equitable access throughout the country.
The government has recently taken praiseworthy steps like the Green Open Access Rules, which were introduced in 2022. Lowered eligibility thresholds and mandated simplified processes have been implemented so that these reforms have attempted to make the ecosystem more inclusive. However, the application of these rules has not been uniform across the states, thus making their potential largely unrealised. Also, enforcement mechanisms remain dangerously weak.
Several measures are needed to elevate open-access solar to worthy status in the renewable energy strategy of India. These include creating a robust national policy framework that will harmonise regulations, incentives to support open access through compensation mechanisms by the discoms, and a competitive marketplace for such green power. Digitalisation and transparency also prove very important- streamlined portals, real-time tracking of applications, and clear timelines would boost investor and consumer confidence.
This must be India’s inclusive, diverse, and forward-looking journey to sustainable energy in the future. Open access solar will hasten this journey by empowering consumers, promoting private investments, and offloading the burden on public infrastructure. Thus, as the country pursues its climate commitments and lays down economic plans, it would be failing to seize the opportunity if all of them choose not to move toward this promise of open access. This game-changer was silent in the narrative; it is now getting the due attention it rightly deserves.
