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Overview

The research, in collaboration with the Delhi electricity distribution company (DISCOM), BSES Yamuna (BYPL) proposes three innovative utility-led business models to overcome prevailing market challenges, accelerate deployment of rooftop solar systems in the residential sector and create a conducive environment for households, DISCOMs, and developers. With the trend of decreasing prices of solar systems, and the possible cost reduction with DISCOM involvement in aggregation and facilitation, these three business models can address market challenges and understand the domestic consumer segments.

Households owning rooftop solar systems could save up to 95 per cent on their electricity bills and households buying solar electricity from a community solar PV plant via a subscription plan could save up to 35 per cent on their electricity bill. The solar electricity tariffs have declined significantly in recent years making rooftop solar a lucrative investment for commercial and industrial consumers. However, despite a 30 per cent government subsidy, only about 400 MW of rooftop solar has been installed by households across the country.

The research proposes three business models – community solar model, on-bill financing, and solar partner model. While the community solar model provides a way for households living in apartment buildings with shared roofs or with no roof access to avail the benefits of a rooftop solar system through a shared system, the solar partner model allows even renters to subscribe to solar energy for shorter periods. Both models benefit from the availability of large roof spaces in public and private buildings, and pass on the benefit to residential consumers.

The on-bill financing model, on the other hand, targets consumers with roof access and who need access to easy financing. The combination of the three models extends the rooftop market to all residential consumer segments. The involvement of DISCOMs with well-planned rooftop programmes can eliminate the various market challenges and provide the momentum that the sector currently lacks.

Key Recommendations

Community solar model

• DISCOMS should introduce the community solar programs in strategic locations, given the high proportion of consumers who live in apartments.
• Subscription payment option along with upfront payment method would encourage more consumers to take an interest in the program as it eliminates any financial burden on them.
• Differentiated subscription tariff is necessary to make the model financially viable to all domestic consumer segments.

On-bill financing model

• DISCOMs should aggregate consumers and partner with financial institutions who can offer loans below market rates.
• The repayment collection on electricity bill would reduce the risk of defaulting and this should make it possible for the banks to offer better terms of debt.

Solar partner model

• DISCOMs should aggregate large roof spaces and tender them out to reduce the overall system installation cost which can bring down the solar tariff.
• DISCOMs can also procure systems at lower prices and install them in their office buildings as well as in other public or private buildings in their area with large roof areas.