Demand Aggregation for Rooftop Solar: Importance and Its Benefits

 The Government of India has set an ambitious target of 100 GW solar energy by 2022 - 60 GW of utility-scale solar installations and 40 GW of distributed rooftop photovoltaic (RTPV) installations. While the utility solar segment in India has seen rapid growth with a capacity addition totaling 32 GW (as of Mar 31, 2020), the rooftop segment has seen the addition of just 2.5 GW in the same period.

The aggressive subsidization has played a significant role in improving the installations of RTPV systems across the country. Despite this, the target of 40 GW is almost certainly likely to be missed. The reasons behind the slow growth of rooftop solar segments are affordability, lack of standardized products, lack of consumer awareness, and financing. To speed up the installations of RTPV systems among the residential, commercial, and industrial segments, all these challenges need to be addressed. Several solutions have been proposed to overcome these obstacles & one such method is demand aggregation rooftop solar.

What is Demand Aggregation?

Demand aggregation is the process of bringing together several potential geographically co-located RTPV consumers. The aggregated demand is often given as a single project to an installer or an investor giving the installers the advantage of economies of scale.

demand aggregation rooftop solar

It is not just for the advantage of price reduction due to volumes, but also to enhance consumer ownership, ensures consumers have a say in the quality of the systems, and finally bring about a collective effort in educating the consumer about the technology and its maintenance.

Why Demand Aggregation is Important?

Demand aggregation can significantly expedite India’s deployment of RTPV systems. These systems are spread across a wide number of roofs, each with its topology and unique characters. The fragmented nature of the market makes mass adoption a challenge. While financial benefits accruing from reduced electricity costs are certainly an attractive proposition, one needs to go beyond economic reasons to start building consumer awareness. Reaching several consumers in one go can significantly reduce the time spent in gaining consumers by any EPC company.

Advantage of Demand Aggregation

  • Accelerates customer education - For consumers, demand aggregation can help accelerate the process of getting familiarized with the technology and navigating through its myriad choices. Further, DA helps consumers fully understand the benefit that RTPV systems can offer. Also, understanding maintenance and troubleshooting issues can significantly improve customer satisfaction and reduce the downtime of systems.
  • Accelerates Adoption Rates - From a policymaker and an implementation agency's point of view, demand aggregation can significantly expedite the progress towards the solar goals. Due to the proximity of consumers, it is expected that the project execution period will be shorter. 
  • Could Improve Quality - When DA is performed by someone who understands solar PV technology, they who take residential rooftop solar tender could potentially improve the quality of the system being installed. 
Reduced Cost - DA can harness the powers of economies of scale to significantly lower costs.  
Location: India

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