Scaling Rooftop Solar: Powering India’s Renewable Energy Transition with Households and DISCOMs

Given the low rate of deployment of rooftop solar in the residential sector in India, it has become imperative to develop innovative business and financial interventions to accelerate its adoption among households.

Bringing the utilities to the forefront and incentivising them to take the lead would go a long way in improving the situation. In this context, the Council on Energy, Environment and Water (CEEW) in partnership with the Delhi electricity distribution company (discom), BSES Yamuna Power Limited (BYPL), has developed three innovative utility-led business models that can accelerate the deployment of rooftop solar systems in the residential sector.

DISCOM-led business models

1. Utility-led community solar model
Community solar is ideal for consumers who wish to benefit from solar power but do not have access to suitable roof spaces, like households within high-rise and multistory buildings. Through this model, a group of consumers could either own the solar photovoltaic (PV) systemjointly or buy the solar electricity from community solar PV plants at a predetermined tariff. Individual consumers can subscribe to a share of the system by one of the two subscription options – upfront payment or subscription fee.

2. On-bill financing model
The on-bill financing model allows individual consumers with roof ownership to install rooftop solar systems while not having to pay a huge upfront amount. This is made possible by offering the capital cost as a loan which the consumers would repay through their monthly electricity bill. The average savings achieved through reduced grid electricity consumption or a part of the savings would then be used to make the monthly loan repayment. The repayment collection on the bill with a threat of disconnection on non-payment, reduces the risk of loan default.

3. Solar partners model
Solar partners model mimics the reverse auction model deployed for utility-scale large solar plants. DISCOMs play the role of a demand and supply aggregator. At the supply end, DISCOM aggregate rooftop owners in their license area, tender the capacity through reverse auction and sign power purchase agreements (PPAs) with developers who would install systems on the aggregated rooftop space. Solar electricity from these rooftop solar plants would be made available to residential consumers through electricity exchange platform. This model allows tenants as well as flat owners (without roof access) to avail solar electricity by paying an annual subscription fee.