How Demand Aggregation Rooftop Solar Helped in Expediting India’s Rooftop Solar Installation?

Rooftop solar projects in India have not encountered a high growth rate as compared to ground-mounted solar projects. Aggregate rooftop solar installations in the year 2019 were 5.440 GW along with a cumulative installed solar capacity of 35.7 GW. Rooftop solar has been maintained at ~10% share of overall solar capacity. This is much lower than other key markets such as the US, Germany, China, Spain, and Australia.

demand aggregation rooftop solar

What Are the Challenges?

The average development of rooftop solar installations in India has been a concern for policy makers. There are various reasons for modest uptake of grid-connected rooftop solar in India such as:

  • Installation approach adopted by individuals
  • Absence of asset securitization
  • Non-bankable PPA
  • High transaction costs for the developers etc.

How to Overcome Obstacles?

One way to overcome the challenge can be demand aggregation. Aggregating the demand can accelerate the uptake in geography. Secondly, marketing, lead generation, and transaction costs which form an important part of the total cost of the developers can also be decreased by demand aggregation rooftop solar. States can choose the aggregation route for expediting the installation of rooftop solar systems in the state. 

Under this approach, the aggregated demand in a particular area is bid-out to the developers, hence, decreasing the total transaction costs of the developers due to aggregation and economies of scale. Interest from various developers is taken into consideration for the aggregated demand and the demand is then allocated to the most qualified bidder. The asset is securitized by developing the draft model PPA format post consultations with all the stakeholders involved, including the lenders.

Outcome

  • Demand aggregation model has shown some positive outcomes which is evident from following:
  • Substantial reduction in transaction cost for developers
  • Discovery of competitive bidding rates
  • Large developer turn around and market participation
  • Creation of a ready pool of consented consumers
  • Potential assessment and creation of centralized repository of data of sites and seamless execution of multiple residential rooftop solar tender.
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