Delhi Plans to Spur Rooftop Solar With U.S.-Style Billing Model

Sep 03, 2014 10:34 am ET

Sept. 3 (Bloomberg) -- India’s blackout-prone capital introduced a policy for households and businesses to earn credits for solar power produced on rooftops, planning to replicate a model that sparked booms in the U.S. and Japan.

The Delhi Electricity Regulatory Commission announced rules for a new net-metering program on its website, a system that credits people for the energy they can’t consume on-site.

Those generating solar power will feed their surplus into the grid and earn credits to reduce their next electricity bill. The local distribution utility will pay them for any remaining credits at the end of each financial year.

Prime Minister Narendra Modi’s government, since taking office in May, has pledged to broaden India’s solar industry beyond large desert projects toward the kind of scattered rooftop installations that made the U.S. and Japan among the world’s biggest markets. That transition could prompt India’s government to expand the national solar target fivefold to 100 gigawatts by 2022, according to Power Minister Piyush Goyal.

“We’re looking at going far beyond the National Solar Mission’s 20,000 megawatts by 2022 -- that clearly is not Mr. Modi’s vision,” Goyal said last month. “The honorable prime minister wants to see much faster growth in the solar sector. He has personally spoken about expanding rooftop rapidly.”

Pilot Program

The Delhi policy follows a pilot program set up in Gandhinagar, the capital city of Modi’s home state of Gujarat, where residents lease their rooftops to private solar utilities and get paid 3 rupees (5 U.S. cents) for every kilowatt-hour of electricity produced. The Delhi regulator didn’t say what tariff consumers would get for surplus credits, only saying they would be paid “per the rates notified by the commission from time to time.”

While Delhi enjoys as many as 300 sunny days a year, it has little open space, according to the commission. The net-metering system helps address the space constraint by prodding businesses and homes to use rooftops to tap the city’s solar potential.

The capital could install 2 gigawatts of solar on its roofs by 2020, roughly equal to what the whole of India has built to date, according to a July 2013 report by advisory Bridge to India Energy Pvt. and Greenpeace. With power prices rising, it would be cheaper by 2018 for any residential, industrial or commercial consumer to get their electricity from solar than the grid, they said.