The growing interest in green energy solutions has led to increased awareness of solar rooftop panels in Indian households. However, despite the ambitious goal of installing solar panels in over 10 million households under the Pradhan Mantri Suryodaya Yojana, announced on January 22 by Prime Minister Narendra Modi, the country's progress on this front has not stellar, with only 700,000-800,000 households currently powered by solar energy.
"Since 2016, the rooftop solar (RTS) capacity in India has grown to 2.7 GW. The Ministry of New and Renewable Energy (MNRE) rolled out Rooftop Solar Programme Phase-II in 2019 with an aim to achieve 40 GW of rooftop solar. With the launch of Pradhan Mantri Suryodaya Yojana (PMSY), we expect an accelerated adoption of solar energy. Having said that, the RTS adoption hasn’t gained the desired momentum due to two reasons – lack of awareness among people and unavailability of easy RTS finance. However, we are hopeful that with government support, the RTS demand and adoption will increase," said Vikas Agarwal, Co-Founder and Chief Business Officer of Credit Fair, which is a consumer lending fintech start-up that offers personal loans to set up RTS at an interest rate of 8-10%. Credit Fair also offers no cost EMIs.
"We have contributed to installing panels in more than 2,000 households till date. Currently around 7-8 lakhs households have the solar. And as per the GOI and PM Modi's vision we are determined in contributing 1 million of residential rooftop solar across the country in next 5 years," added Agarwal.
Photovoltaic panels, commonly known as rooftop solar panels, are installed on the roofs of buildings and connected to the main power supply unit. This installation reduces reliance on grid-connected electricity, leading to cost savings for consumers. In a solar rooftop system, the expenses involved are the initial capital investment and maintenance costs.
The government has set a target of 40 GW annual solar power generation for the next 5 years to reach a 500 GW non-fossil fuel capacity target by 2030. However, with only 2.2 GW installed in homes, about 70% of the targeted 40 GW remains unfulfilled, tweeted Mallikarjun Kharge, President of the Indian National Congress on Tuesday.
Break-even Cost
How much does it cost to set up a solar rooftop? The cost can range from Rs 2.20 lakh to Rs 3.5 lakh for an average household requiring a 3KW - 5KW installation. Interestingly, this cost can be managed through manageable EMIs of around Rs 4000 -5000 per month, equivalent to electricity bills, reducing the financial burden on consumers. With easy financing through Credit Fair, the consumer can pay an easy EMI of only Rs4,000-Rs5,000 per month. We try to maintain EMI equal to electricity bills, so there is no additional burden of EMI on the consumer," said Agarwal of Credit Fair.
Source: Navitas Solar
Navitas Solar stated in one of its Linkedin post that the average electricity consumption per month for a 3kW solar plant is 360 Units or kWh. Whereas installing a 3kW Solar Plant would require approximately 300 sq ft shadow-free space. Hence, total yearly savings from a 3kW solar plant would be Rs 30,240. A 3kW solar system generally costs around Rs 1,22,979 without subsidy. However, for a residential rooftop, a 40% subsidy is provided by the government. Therefore, with the subsidy, the same system will cost around Rs 73,787. Various other factors such as increasing grid electricity tariff rates, availability of financial incentives, net metering, and ease of installation with EPC also affect the calculation of the payback period. However, generally, the payback period for the solar system is 2-3 years.
Source: Navitas Solar
The whole process is made more financially sound via the concept of Net Metering, where any surplus energy generated by the solar panels is redirected back into the grid, earning users credits to offset future utility bills. This substantially reduces overall electricity bills by balancing what is contributed and consumed. To ease the installation cost, the government also offers subsidies. Homeowners and housing societies can receive Rs. 9,000 to Rs. 18,000 per kW for installing rooftop solar systems up to 10kW under the Rooftop Solar Program Phase – Ⅱ.
Rooftop Solar System Capacity | Applicable Subsidy (₹) | |
Up to 3kW | 18,000/kW | |
Above 3kW and up to 10kW | 9,000/kW* | |
Above 10kW | 1,17,000** | |
Note: *Rs.18,000/kW for the first 3 kW and Rs.9,000/kW for the rest of the capacity up to 10kW. | ||
"Digital lenders are also facilitating the installation process by partnering with local installers and ensuring quick, easy loan disbursal. For instance, Credit Fair has helped finance over 2300 rooftops so far, proving the initiative's success. These programs have also had a significant environmental impact, curtailing 13,000+ tons of carbon emissions - equivalent to planting over 500,000 trees. Furthermore, they have saved around Rs. 12 crore in yearly electricity costs, highlighting their economic benefits," said Agarwal.
