Rooftop solar: You can save Rs 18,000 annually through this scheme

Through rooftop solarisation, one crore households will obtain up to 300 units free electricity every month,

Not just firms, but residents too can benefit from the interim Budget announcement for “solarisation” of rooftops of one crore households.

Through rooftop solarisation, one crore households will obtain up to 300 units of free electricity every month, Finance Minister Nirmala Sitharaman announced during her budget speech on Thursday.

This initiative, introduced by Prime Minister Narendra Modi in January, focuses on the installation of rooftop solar panels. The scheme will also aid charging of electric vehicles; entrepreneurship opportunities for a large number of vendors for supply and installation and employment opportunities for the youth with technical skills in manufacturing, installation, and maintenance.

As Business Standard explained earlier , rooftop solar on households entails installing a maximum capacity of 10 kilowatt.

A rough industry calculation shows close to 300 units can be generated through systems of this size, helping consumers to have free electricity and saving a similar bill amount on grid-connected electricity. If generated more than consumption, the solar power can be fed into a grid and a household can earn the same from a power distribution company (discom).

 

"The plan for supporting solar rooftops in one crore households augurs well for developers and module manufacturers as it will bump up rooftop demand. It will also be attractive for households, given the potential to save electricity cost of Rs 15,000-18,000 per annum per household. That said, the quantum and mechanism of disbursements and timelines around the support will determine the pace of progress of the scheme and will bear watching," said Ankit Hakhu, Director, CRISIL Ratings.

"The implementation of this plan is expected to lead to household savings ranging from Rs 15,000 to Rs 18,000. Sitharaman highlighted in her budget speech that not only will residential consumers benefit from the initiative, but distribution companies (discoms) will also profit by selling excess electricity.To qualify for subsidies under the existing regulations, residential customers are required to install rooftop solar plants from suppliers registered with the local distribution utility. Government policies and commitments to renewable energy play a crucial role in influencing investor sentiment and stock prices in the solar and energy sector. Positive budget announcements, such as those supporting renewable energy initiatives, providing subsidies, or creating a favorable environment for the growth of solar and energy companies, can instill confidence among investors and contribute to an upswing in stock prices," said Sunil Nyati Managing Director of Swastika Investmart.

The central government has a National Rooftop Scheme which provides financial assistance of 40 per cent of the capital cost of a solar rooftop project. 

The Ministry of New and Renewable Energy selects the projects based on submissions made by discoms, wherein private contractors/vendors selected by the discoms build the said project. 

Data from Central Electricity Authority data shows that India has a solar energy-installed generation capacity of over 73 GW.

Similarly, the data showed that wind energy capacity in India stood around 45 GW while large hydro (over 25 MW capacity each) is 47 GW.

President Droupadi Murmu on Wednesday said in her joint address to the Members of Parliament that in 10 years, non-fossil fuel-based energy capacity has increased from 81 GW to 188 GW.

"Rooftop solar has the potential to meet residential electricity demand in numerous states, liberating Indian homes from fossil fuel dependency. The Inflation Reduction Act in the USA has accelerated adoption of rooftop solar by extending a 30% tax credit for residential solar and battery installations. Implementing a comparable Indian government initiative could be instrumental in fostering a sustainable energy future through the widespread utilization of solar energy," said  Pooja Chatterjee, Partner, King Stubb & Kasiva, Advocates and Attorneys.