India is one of the fastest-growing markets for solar energy in the world. The country has set an ambitious target of installing 100 GW of solar capacity by 2022, out of which 40 GW is expected to come from rooftop solar projects. However, the rooftop solar sector faces many challenges, such as high upfront costs, lack of awareness, regulatory hurdles, and limited roof space. To overcome these barriers, the government has introduced a new policy framework that allows consumers to share solar power with each other and the grid. This is known as the shared solar model, and it has the potential to revolutionize the rooftop solar industry in India.
What is Shared Solar?
Shared solar is a concept that enables multiple consumers to benefit from a single solar installation, either on their own premises or at a common location. The consumers can either own a part of the solar system, or pay a fixed tariff for the electricity they consume from it. The excess power generated by the solar system can be fed back to the grid, and the consumers can receive credits or payments for it.
There are different types of shared solar models, such as community solar, virtual net metering, peer-to-peer trading, and solar cooperatives. Each model has its own advantages and disadvantages, depending on the local context and regulations. However, the common benefits of shared solar are:
- It reduces the initial cost and risk of installing solar panels for individual consumers, as they can share the expenses and maintenance with others.
- It increases the access and affordability of solar power for low-income and rural consumers, who may not have suitable roofs or enough funds to invest in solar systems.
- It optimizes the utilization and efficiency of solar power, as it can be distributed among multiple consumers according to their demand and supply patterns.
- It enhances the grid stability and reliability, as it reduces the dependence on fossil fuels and provides a decentralized and diversified source of power.
- It promotes social and environmental benefits, as it creates a sense of community and ownership among the consumers, and reduces the greenhouse gas emissions and pollution from conventional power sources.
How are Shared Solar Bills Helping?
The government of India has recently passed two bills that aim to facilitate and promote the shared solar model in the country. These are the Electricity (Amendment) Bill, 2024 and the Renewable Energy (Facilitation and Promotion) Bill, 2024. These bills have introduced several provisions that can boost the shared solar sector, such as:
- Defining the roles and responsibilities of various stakeholders, such as the central and state governments, the regulators, the distribution companies, the consumers, and the developers.
- Establishing a national renewable energy policy and a national renewable energy fund, to provide a clear vision and financial support for the renewable energy sector.
- Creating a framework for net metering and feed-in tariff, to enable the consumers to sell their surplus solar power to the grid and receive compensation for it.
- Allowing the consumers to choose their electricity supplier and switch between them, to create a competitive and transparent market for electricity.
- Encouraging the formation and participation of renewable energy cooperatives, to enable the consumers to collectively own and operate solar systems.
- Providing incentives and subsidies for the installation and operation of shared solar systems, to reduce the cost and increase the attractiveness of solar power.
What are the Challenges and Opportunities?
The shared solar model is still in its nascent stage in India, and faces many challenges, such as:
- Lack of awareness and trust among the consumers, who may not be familiar with the concept and benefits of shared solar, or may have doubts about the quality and reliability of the service.
- Lack of standardization and coordination among the states, who may have different policies and regulations for shared solar, creating confusion and inconsistency for the consumers and developers.
- Lack of infrastructure and technology, such as smart meters, blockchain, and artificial intelligence, that can enable the efficient and secure management and monitoring of shared solar systems.
- Lack of financing and investment, as the shared solar sector may not be attractive enough for the banks and investors, due to the perceived risks and uncertainties involved.
However, these challenges also present opportunities for innovation and collaboration, such as:
- Developing and implementing effective awareness and education campaigns, to inform and persuade the consumers about the advantages and feasibility of shared solar.
- Harmonizing and streamlining the policies and regulations across the states, to create a uniform and conducive environment for shared solar.
- Adopting and integrating the latest technologies, such as smart meters, blockchain, and artificial intelligence, to enhance the performance and transparency of shared solar systems.
- Exploring and leveraging various financing and investment options, such as crowdfunding, green bonds, and impact investing, to mobilize the funds and resources for shared solar.
Shared solar is a promising and innovative model that can accelerate the growth and adoption of rooftop solar in India. The government has taken a positive step by passing the shared solar bills, which can provide a legal and institutional framework for the sector. However, there is still a long way to go, and the success of shared solar will depend on the cooperation and participation of all the stakeholders, including the consumers, the developers, the regulators, and the financiers. Shared solar can not only benefit the individual consumers, but also the society and the environment, by creating a clean, green, and resilient energy system for India.
