Subsidies hold rooftop solar projects – Lack of funds and no clarity hampering adoption

With the government aggressively promoting installation of rooftop solar systems, the key factor that is driving adoption – subsidies – are running dry, subsequently hampering installations.

Several solar power companies say that subsidies promised by the government in the National Solar Policy are not coming through, and off late, even applications for subsidies aren’t being accepted, thus drastically impacting the adoption of rooftop solar systems as companies are holding back projects until subsidies are paid. 

“The last application of ours that was accepted was in February. All applications we have sent after that is awaiting clearance. We have about 1.7MW of projects awaiting clearance,” said Manu Karan, who heads the Rooftop Solar business for SunEdison.

Though costs of putting up residential solar rooftop systems are gradually coming down, it is still unviable without government support, and subsidies offered are critical to the adoption of solar power. The ministry of new and renewable energy (MNRE) has promised a subsidy of 30% on the project cost for a 1 kilowatt rooftop solar system. The channel partners– dealers authorized to set up residential solar systems — install the systems at costs net of the government subsidy – the ministry pays them the subsidy amount directly.

The subsidy was meant to be a catalyst, but is actually being a bottleneck. “MNRE orders say that unless subsidies are cleared we aren’t allowed to go ahead with installations, so we have orders under the subsidy scheme but can’t execute them,” Karan said.

Also, subsidies for projects that have been approved, haven’t reached solar companies yet. “The budget allocated is not sufficient enough and has been exhausted on projects submitted. Clients believe subsidy is still in place and force the contractors to take the burden on them,” said Guy Baeyens, managing director of Enfinity Solar Solutions.

“Our company is yet to receive over Rs 50 lakh for projects approved over the last year,” said KE Raghunath, managing director, Solkar Solar Industry. Issues are compounded in Tamil Nadu as there is no clarity on how state government subsidies will be given, he added.

The MNRE, however, says that this was a temporary blip. “We had stopped sanctions for some time. There was a routine delay. We were trying to see how to cater to demand which has doubled this year,” Tarun Kapoor, joint secretary, MNRE said. Also, the subsidy scheme elapsed with first phase of the solar mission, and the revised policy is going through approvals from ministry now. “Meanwhile, the old scheme has been extended till September 30,” he said. The ministry has, over the last four years, released close to Rs 1,280 crore as subsidies for off-grid solar applications.


Source: TOI



About Ritesh Pothan

Ritesh Pothan, is an accomplished speaker and visionary in the Solar Energy space in India. Ritesh is from an Engineering Background with a Master’s Degree in Technology and had spent more than a decade as the Infrastructure Head for a public limited company with the last 9 years dedicated to Solar and Renewable Energy. He also runs the 2 largest India focused renewable energy groups on LinkedIn - Solar - India and Renewables - India
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