India’s Punjab Approves Solar Policy to Spur Rooftop Plants

Sep 04, 2014 7:35 am ET

Sept. 4 (Bloomberg) -- India’s Punjab state approved a policy allowing businesses and households to earn credits for solar power produced on rooftops as Prime Minister Narendra Modi seeks to accelerate installations to combat blackouts.

The state cabinet passed a net-metering policy that’s expected to drive 100 megawatts of rooftop capacity in the northwestern state, Amarpal Singh, chief executive officer of the Punjab Energy Development Agency, said today.

Net-metering is a system that credits people for energy they can’t consume on-site. Those generating solar power will feed the surplus into the grid and earn credits to reduce their next electricity bill. The local power distributor will pay them for any remaining credits at the end of October each year, said Singh on the sidelines of a conference in Noida, near Delhi.

Delhi regulators introduced a similar program this week for the nation’s blackout-prone capital as state-level policy makers spearhead an effort to replicate rooftop solar booms that have made countries like Germany and Japan among the largest photovoltaic markets in the world despite getting far less sun.

Modi’s administration has pledged to broaden India’s solar industry beyond large, utility-scale plants in the desert. Power Minister Piyush Goyal is seeking to spur smaller, more distributed solar installations by fitting everything from farm irrigation pumps and village huts to mall rooftops with photovoltaic panels.

Punjab is promoting both small rooftop projects and large farms, Singh said. The state is identifying land for a 1,000- megawatt solar project and expects to call for bids shortly, he said.

The state will also build a 200-megawatt solar plant to supply agricultural feeder lines used by farmers, Singh said. About a fifth of India’s electricity is used in agriculture to run irrigation pumps and is supplied nearly free of cost by state utilities.

Punjab intends to eliminate agricultural power subsidies by feeding all of the electricity from the solar plant to farms, Singh said. Any excess generated will be sold at market rates.