India has set an ambitious rooftop solar photovoltaic target of 40 GW by 2021-22. However, with only approximately 6.8 GW installed till date, it looks increasingly difficult to reach the target in less than a year. One of the primary deterrents is the reluctance of distribution companies (discoms) to promote the rooftop solar segment. The finances of most discoms are in a beleaguered state. This is due to free power for agriculture, unmitigated aggregate technical and commercial losses, and failing cross-subsidy regimes. They fear further revenue erosion if high-paying commercial and industrial (C&I) consumers adopt rooftop solar. Moreover, grid stability is cited as a concern when it comes to large-scale rooftop solar penetration. Intermittent and fluctuating generation from such plants might cause harmonics and voltage/frequency imbalances in the grid.
This article addresses the above concerns and examines the potential of discom-based rooftop solar business models in the Indian context.
