One of India's renewable energy generation plans is to generate 40 GW of rooftop solar power by 2022, a goal that seems out of reach given the country's current installed base. On top of this, while rooftop solar combined with energy storage can bring more clean electricity to homes, the investment is beyond the reach of the average Indian household.
To achieve the 40 GW generation target, the installed capacity of the rooftop segment will have to double every year, but this too will be difficult to achieve. The high upfront cost of solar energy is the main obstacle for the vast majority of customers, and while there are a large number of financial instruments to support the development of solar plants, this is not available to rooftop solar customers, with most homeowners and MSMEs having to rely on their own funds to set up a solar system.
Furthermore, in states with higher per capita incomes and higher grid tariffs, consumers can afford to purchase rooftop solar on their own, whereas in states with lower per capita incomes and lower grid tariffs, consumers do not have the financial means to do so, and the lower tariffs do not require additional electricity generation, so the installation of rooftop solar can be heavily dependent on government subsidies. In India, however, grid tariffs vary considerably between states. For example, the price of electricity in Maharashtra can be twice as high as in Sikkim. This in turn leads to different measures being taken for solar energy in each state.
All these factors lead to 70% of potential customers delaying or not installing rooftop solar power.
How big is the rooftop solar + storage market in India?
The rooftop solar + storage market is currently in its infancy in India. This is mainly because most parts of the country now have few or no power cuts and therefore have a low reliance on energy storage (this is very similar to the situation in China). In addition, energy storage could double the cost of a rooftop solar system, making this option less attractive from an economic point of view.
However, as solar power capacity increases year on year, there is a mismatch between supply or generation and demand. Solar power is generated from 8am to 5pm, while energy consumption is all day long and in many cases may also peak at night. Energy storage at both utility and individual scales is therefore critical in balancing the gap between supply and demand. Addressing existing energy storage needs will require us to transition to lithium-based or more advanced forms of energy storage and to work with local manufacturing to meet future demand.
In the future, community solar may be an emerging market where communities can use rooftop solar and storage to independently manage their energy supply and demand, an approach that can make renewable energy available to a large proportion of the population. However, it is worth noting that with the privatisation of land in India, where 70% of land is privately owned, it is particularly important that the government takes the right incentives to promote the deployment of solar and storage within communities.