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How Import Duty on Solar Panels Affects Their Prices and Quality in India

Posted on by Bhavesh Rathod
Import Duty on Solar Panels
06
Dec

The solar energy industry in India has been experiencing tremendous growth, driven by the nation’s commitment to renewable energy. However, the introduction of import duties on solar panels has generated debate regarding its impact on prices and quality. As India pushes towards achieving its ambitious renewable energy targets, understanding how import duties affect the solar industry is crucial for stakeholders. This blog will explore the impact of import duty on solar panels prices and quality in India and how this policy can shape the future of the country’s solar energy landscape.

Introduction to Solar Import Duties in India

Solar energy has a long history in India, dating back thousands of years. The sun has always been revered in Indian culture and mythology as a powerful life-giving force. Ancient Indian architecture incorporated passive solar design, orienting buildings and streets to make optimal use of sunlight and shade. But how does import duty affect solar energy in India today? This is the question that we will explore in this article. We will look at the current and proposed import duty on solar panels, the solar price in India, and the solar industry in India. We will also examine the impact of import duty on the growth and competitiveness of solar energy in India.

In more recent times, experiments with solar technology began in the late 19th century under British rule. In 1895, the Tata Power Company set up India’s first experimental photovoltaic plant. Through the 20th century, solar research advanced in fits and starts. The 1970s oil crisis prompted greater interest in renewable energy sources like solar.

In the 1980s, India established a solar energy programme under the Ministry of Non-Conventional Energy Sources. This spurred the creation of the National Solar Energy Federation in 1980. During the 1990s and 2000s, India stepped up efforts to adopt solar technology, from solar water heating systems for homes to grid-connected solar farms.

The real solar revolution in India took off after 2010. Plummeting prices for solar panels globally made solar power cost competitive. Supportive government policies incentivized the rapid scaling of solar energy. Major investments flowed into India’s solar industry from both domestic and foreign companies. This set the stage for impressive growth in installed solar capacity over the past decade.

Overview of the Import Duty Structure

The import duty on solar panels in India currently consists of the following elements:

  • Basic Customs Duty (BCD): A significant part of the total import duty imposed on solar modules. The BCD on solar cells is set at 25%, while for solar modules, it is set at 40%.
  • Goods and Services Tax (GST): In addition to BCD, solar panels and related components are subject to a GST rate of 5%. This further contributes to the total cost of importing solar panels.

This combination of import duty on solar panels and taxes has led to increased prices, directly impacting the overall cost of solar projects.

Solar Growth Mission of India

The Indian government launched the National Solar Mission in 2010 with the goal of establishing India as a global leader in solar energy. The mission aims to install 100 gigawatts (GW) of grid-connected solar power capacity in India by 2022.

The target of 100 GW by 2022 is in line with India’s commitment in its Intended Nationally Determined Contributions (INDCs) to the Paris Agreement, where India pledged that 40% of its installed electricity capacity would be from non-fossil fuel sources by 2030. The Solar Mission is a major part of achieving this clean energy target.

The 100 GW solar target consists of 40 GW rooftop solar and 60 GW large and medium-scale grid-connected solar power projects. The ambitious capacity addition is aimed at reducing dependence on fossil fuels like coal and petroleum to meet the country’s rapidly increasing electricity demand. It will also support India’s aim to reduce the emissions intensity of its GDP by 33-35 percent from 2005 levels by 2030.

Overall, the Solar Mission signifies India’s commitment to meeting its rising energy needs through renewable sources and transitioning to a low-carbon economy. The success of the mission will be key for India to meet its climate goals and establish its position as a global solar power leader.

  • In the Union Budget 2024-25, The Centrally Sponsored Scheme for Solar Power (Grid) has been allocated INR 10,000 Cr, an increase of 110% from INR 4,757 Cr allocated in the Union Budget 2023-25. 
  • PM-Surya Ghar Muft Bijli Yojana, launched in February 2024 with an outlay of INR 75,000 Cr, has been allocated INR 6,250 Cr.

Current Import Duty on Solar Panels

India currently imposes a 15% safeguard import duty on solar panels and modules imported from China and Malaysia. This safeguard duty was imposed in July 2018 to protect the domestic solar manufacturing industry from a surge in imports.

The safeguard duty was initially imposed for 1 year and has been extended multiple times since then. The current 15% duty is effective until July 2022.

The safeguard duty only applies to imports from China and Malaysia, which account for the bulk of module imports to India. Other countries exporting modules to India do not face this duty currently.

The 15% safeguard duty is levied on the total import value of cells and modules. It increases the cost of imported solar equipment and was intended to create a more level playing field for Indian manufacturers.

However, even with the safeguard duty in place, solar developers in India continue to largely source their modules from China due to lower costs. Domestic manufacturing has not yet been able to match the scale and pricing prevalent in China.Impact of Import Duty on Solar Panel Prices

The introduction of import duty on solar panels on solar panels has led to an increase in the cost of solar energy projects. Since a significant portion of solar panels in India were previously imported from countries like China, which offer competitive prices, the imposition of BCD has made these imports more expensive.

a. Rising Costs for Developers

Solar developers in India are now faced with higher upfront costs due to the increased prices of imported panels. These higher costs are often passed on to consumers, affecting the affordability of solar energy solutions. The cost of solar installations has risen by approximately 20-30% since the imposition of the import duty on solar panels, which has slowed down the growth rate of new solar projects.

b. Effects on Solar Power Purchase Agreements (PPAs)

The increased cost of solar projects has impacted Power Purchase Agreements (PPAs) between developers and power distribution companies. Developers are now demanding higher tariffs to account for the increased cost of solar panels, which has led to renegotiations of existing PPAs and delays in the signing of new agreements.

c. Affordability for Consumers

As solar developers face increased costs, consumers also experience a surge in prices for solar installations. This makes adopting solar energy less affordable for individual consumers, businesses, and industries, thereby potentially slowing the transition to renewable energy.

Impact on Solar Panel Quality

While the imposition of import duty on solar panels aims to boost domestic solar manufacturing, it raises questions about the quality of domestically produced solar panels compared to imported ones. Many developers and consumers have relied on imported panels due to their proven quality, efficiency, and reliability.

a. Quality Concerns with Domestic Manufacturing

The domestic solar manufacturing industry in India is still in its nascent stages, and concerns have been raised about whether domestic manufacturers can produce panels that meet international quality standards. Imported panels, particularly from countries like China, are known for their high efficiency and durability, which are essential for long-term solar energy projects.

b. Technological Advancements and R&D

Imported solar panels often come with the latest technological advancements, making them more efficient in converting sunlight into electricity. Domestic manufacturers may take time to match these advancements, leading to concerns that solar energy projects using domestically manufactured panels might not be as efficient or long-lasting as those using imported panels.

c. Testing and Certification Standards

While the government is encouraging domestic production, it is crucial to establish robust testing and certification standards to ensure the quality of domestically produced solar panels. Without stringent quality checks, there is a risk that lower-quality panels might enter the market, which could affect the long-term performance and reliability of solar energy systems.

Boosting Domestic Solar Manufacturing

The government’s introduction of import duty on solar panels is part of a broader strategy to promote domestic solar manufacturing under the ‘Atmanirbhar Bharat’ (self-reliant India) initiative. Several incentives have been put in place to support domestic manufacturers, including:

  • Production-Linked Incentives (PLI): The PLI scheme offers financial incentives to solar manufacturers to scale up production and improve efficiency.
  • Special Economic Zones (SEZs): Solar manufacturers are encouraged to set up production units in SEZs, which offer tax benefits and other incentives.
  • Research and Development (R&D) Support: The government is providing support for R&D initiatives aimed at improving the quality and efficiency of domestically produced solar panels.

Despite these incentives, challenges remain for domestic manufacturers, particularly in terms of achieving economies of scale and competing with global solar giants.

How Import Duties Affect India’s Solar Energy Targets

India has set ambitious targets for solar energy, aiming to achieve 280 GW of installed solar capacity by 2030 as part of its National Solar Mission. However, the imposition of import duty on solar panels poses challenges to achieving these targets on time.

a. Slower Solar Capacity Expansion

The increased cost of solar projects due to import duty on solar panels has led to delays in new project installations. This slowdown in capacity expansion could make it difficult for India to meet its renewable energy targets, especially as demand for solar energy continues to grow.

b. Impact on Solar Power Prices

The rising cost of solar projects could lead to higher solar power prices for consumers, potentially making solar energy less attractive compared to conventional energy sources. This could affect the overall adoption rate of solar energy in the country.

c. Need for Long-Term Policy Clarity

To mitigate the challenges posed by import duty on solar panels, there is a need for clear long-term policy direction. Stakeholders in the solar industry require clarity on government policies related to import duties, incentives for domestic manufacturing, and support for R&D to make informed decisions and investments.

Impact on Prices

The increase in import duty on solar panels will directly impact the prices of imported solar panels and cells. Developers who rely on importing solar components will face higher costs.

Some key impacts on pricing include:

  • The 40% basic customs duty on modules and 25% on cells will make the landed cost of imports significantly more expensive. Analysts estimate this could increase costs by 18-20%.
  • For developers and EPC contractors who have to import components, their project costs will rise proportionately. This may impact bid tariffs and the ultimate price at which solar power is sold.
  • The price increase applies uniformly to all projects under development, regardless of when they were bid out or planned. There is no grandfathering based on past timelines.
  • Domestic manufacturers may not immediately have the capacity or cost efficiency to match cheaper imports. So sourcing locally may also lead to higher prices, at least in the short term.
  • Higher import costs will impact the entire supply chain, increasing the working capital requirements for developers. This too may raise financing costs indirectly.
  • While the government aims to spur domestic manufacturing eventually, the short-term impact is definitively a cost increase for solar projects reliant on imports.

Overall, the import duty changes will clearly raise the costs for developers and EPC contractors who have to import solar components. This may impact bid tariffs and tariffs for end consumers unless domestic manufacturing is simultaneously incentivized. The government hopes growing local solar manufacturing will offset the price impact over time.

Impact on Manufacturing

The increase in import duty on solar panels is expected to provide a strong incentive for domestic manufacturing of solar cells and modules in India. Here are some of the key impacts on manufacturing:

  • The higher cost of imported cells and modules will make locally produced ones more price-competitive. This should encourage domestic producers to scale up their production capacities.
  • The government aims to have an installed solar equipment manufacturing capacity of 10,000 MW per annum within the next two years under the PLI scheme. The import duty hike makes this target more viable.
  • Companies like Adani, Reliance, Tata Power, and state-owned BHEL are expected to benefit and establish new solar equipment factories. Production-linked incentives under the PLI scheme will also assist them.
  • Foreign companies may look to set up local manufacturing plants in India to serve the domestic market and maintain their market share.
  • The import duty differential of 20% between cells and modules may encourage production of cells in India to be integrated into module making.
  • More employment opportunities will arise in solar manufacturing as capacity scales up over the next few years.
  • With large-scale manufacturing, Indian companies can build expertise in the latest solar technologies and improve productivity over time.
  • In the longer run, India can become an exporter of solar cells and modules if sufficient economies of scale are achieved.

Impact on Quality

The higher import duty on solar panels on solar cells and modules could potentially lead to lower-quality solar products in India. With imported products becoming more expensive, some developers may use cheaper, low-quality components from unknown manufacturers to cut costs.

While established foreign brands are held to certain quality standards, new local producers entering the market may not have the same rigorous quality control and testing measures in place. There is a risk that the focus on rapidly scaling up local manufacturing could come at the expense of quality.

Cheap, poor quality solar modules degrade faster, have lower conversion efficiencies, and are more prone to defects. This not only impacts the performance of individual solar projects but could also damage public perception and trust in solar technology.

The government has announced quality control orders for solar modules and has emphasized the need for high quality indigenous manufacturing. However, oversight and enforcement remain a concern. Proper testing facilities, standards, and certifications need to be established to prevent subpar products from entering the market.

The PLI scheme offers incentives for highefficiency modules, which should encourage quality. But developers may still be tempted to use uncertified products to maximize profits in the absence of strict monitoring. While local manufacturing is important, quality considerations should not be overlooked in the push for self-reliance.

Alternatives for Developers

With the new tariffs making imported solar panels more expensive, developers in India have some alternatives they can consider:

Domestic Solar Panels

  • One option is to source panels from domestic manufacturers in India. The government hopes the new import duties will spur growth in local production. This could create opportunities for developers to partner with Indian companies producing solar panels.
  • There are some high quality solar panel producers already operating in India, like Waaree Energies and Adani Solar. Partnering with these companies could provide a steady supply of cost-effective solar panels.
  • New manufacturing facilities are also expected to be built in India with the support of the PLI scheme announced by the government. Over time, this could significantly expand the availability of domestic panels.

Other Renewables

  • Developers could explore supplementing solar power with other renewable sources, like wind energy. India has strong wind resources in certain states like Tamil Nadu, Gujarat, and Rajasthan.
  • Wind power generation costs have also been falling steadily, making it an economical option. Combining solar and wind can provide a well-rounded renewable energy portfolio.
  • Other technologies like biomass, small hydropower, etc. could also be considered where appropriate based on the location and application.
  • Diversifying across renewables can mitigate risk from policy changes affecting one particular energy source.

Global Context

The solar industry is growing rapidly around the world. Major solar markets include:

  • China – China is the world’s largest producer of solar panels and has heavily invested in solar manufacturing. However, China cut subsidies in 2018 which led to a slowdown in the domestic market. China still exports large numbers of solar panels globally.
  • United States – The US has over 100GW of solar capacity installed, behind only China and Europe. Tax credits and incentives have helped spur adoption. However, import tariffs on foreign panels have also impacted prices.
  • Japan – Japan has over 56GW of solar capacity and is the third largest global market. Generous feed-in tariffs helped drive early growth. The market has slowed recently due to policy shifts and saturation.
  • Germany – Germany once dominated the global solar industry but domestic growth has slowed. Germany still has over 45GW in cumulative capacity. But rate cuts and rising prices have stalled the market.
  • Australia – Australia has over 20GW of solar capacity. High electricity prices and abundant sunshine have made it an attractive market. Low module costs have enabled utility-scale and rooftop solar expansion.
  • Emerging Markets – Nations like Brazil, Mexico, Chile, Vietnam and others are seeing rapid growth from low bases. Supportive policies, lower costs and abundant resources are driving adoption. Long-term potential is significant.

Future Outlook

The Indian solar industry is projected to see massive growth in the coming years, driven by strong government support, declining costs, and increased energy demand.

  • India aims to have 100GW of solar power capacity by 2022 as part of its National Solar Mission. This target is expected to be achieved.
  • Consultancy Bridge to India predicts India will reach 130GW of solar capacity by 2024. This would make India the third largest solar market globally behind China and the United States.
  • India is expected to account for 8-10% of global solar panel demand over the next 5 years as new capacity is added.Panel manufacturers are looking to expand production to meet this demand.
  • The government aims for non-fossil sources to make up 40% of installed power capacity by 2030. Solar is expected to contribute over 25% of this target.
  • Declining solar tariffs, driven by cheaper panels and improved efficiency, will accelerate adoption across industrial, commercial and residential sectors.
  • The rooftop solar segment is projected for faster growth compared to large-scale projects, as costs become more viable for households and businesses.
  • Make in India incentives and import duty changes should boost domestic panel manufacturing and reduce reliance on imports over the long-term.
  • To sustain growth, grid integration challenges, land availability, project delays and funding access need resolution through policy reforms.
solarize bharat top solar manufacturers

Take the next step in renewable energy by joining the Solarize Bharat pledge. Imagine your business not just as an entity benefiting from solar power but as a contributor to a nationwide movement, shaping the future of energy in our incredible nation.

Stay solar-powered and environmentally inspired!

P.S.: Share this blog with fellow solar enthusiasts to spread the word about the exciting world of solar energy!

News & Press, Soleos

Everything you need to know before installing a solar rooftop system

Posted on by Bhavesh Rathod
Solar Rooftop
06
Dec

It is not necessary to be a “greenie” to recognise that coal is not the way of the future (sorry Mr. Abbott). So, if you’re reading this, chances are you’re thinking about getting solar. Which of these is a positive step? So let’s get this party started. What are the five things you should know before going solar? During the day, millions of homes and business buildings in India, both urban and rural, have rooftops that receive abundant sunshine. These are perfect for capturing and turning the sun’s energy into electricity. This can be accomplished by installing an inverter, which converts the DC power provided by the solar rooftop panels to AC power, which is required by most appliances and electronics.

Although rooftops can be utilized to generate rooftop energy, there are several aspects to consider before installing solar panels on a rooftop.

On-grid system

One of these is the on-grid system, which connects the rooftop solar system to the main grid. When the rooftop solar system is unable to provide the required electricity, this method permits power to be drawn from the grid. As a result, a well-designed rooftop system may efficiently supply power without relying on grid power, saving money that would otherwise be spent on grid power. Because any extra electricity generated can be sent into the grid and compensated by DISCOMs via ‘net metering,’ this system can create cash.

Photovoltaic (PV) systems are generally divided into two major categories: grid-connected (also known as grid-tied) systems that are interfaced to an electricity grid and stand-alone systems that are self-contained. Since the 1990s the market has shifted decisively toward PV power plants and installations on buildings connected to an electricity grid. In 2000 grid-connected PV had overtaken stand-alone systems in global market share, and in 2016 more than 98% of solar cell production was being deployed in grid-connected systems.

Off-grid system

The off-grid system is one in which the rooftop solar system is not connected to the main grid. This system is self-contained and has its own battery. The battery is charged by the solar energy generated by the rooftop solar system, which is then used to power numerous applications. When there is no grid supply or when the supply is exceedingly irregular with frequent breakdowns, this technique comes in handy

Hybrid System

The third option is a hybrid system, which combines on-grid and off-grid power sources. Although a battery is utilized in this type of system, the advantage is that after the battery has been fully charged, the extra power generated is fed into the grid, generating additional cash for the consumer.

Possibility of using rooftops to generate electricity

The nature of the roof is critical in determining the practicality of house solar rooftop systems. The following are some of the aspects to consider:

The amount of sunshine accessible throughout the year, as well as the area available on the rooftop, are essential factors in calculating the amount of power that can be generated. By capturing one hour of direct sunshine, a typical residential solar panel may create roughly 290 watts. If the sun shines for 8 hours, the solar panel can generate 2320 watts of electricity.

The rooftop’s orientation in relation to the sun is critical. The panel should be oriented towards the south. If the roof is flat, solar panels should be installed at an angle pointing south to get the most sunshine. Furthermore, high-rise buildings should not obstruct the solar panels’ exposure to sunlight.

The cost of a solar rooftop system is influenced by the type of system that is chosen. Each variety has its own set of components; therefore, prices may vary.

How much of the rooftop should be used?

The maximum power that can be generated can be calculated based on the amount of sunshine available and the amount of space available on the rooftop. Furthermore, depending on the type of system – on-grid, off-grid, or hybrid – the homeowner can choose how much area on the rooftop will be used to generate electricity.

Cost-benefit

The homeowner can conduct a cost analysis and determine the amount of electricity required to be profitable. This could encompass both the quantity of power that can be sent to the grid to produce more cash and satisfy the homeowner’s power needs.

Solar rooftop systems are becoming increasingly popular as a source of electric power since they are renewable and abundant during the day. Implementing an appropriate rooftop solar system with careful planning can result in an endless supply of electric power with low recurrent costs.

Is solar energy a good fit for your home?

This is unquestionably the most important item to understand before installing solar panels. So, how can you know if your home is solar-ready? Here’s a list of “indicators” to look for when determining whether your home is solar-ready:

Solar panels don’t perform well in the shade, thus there should be very little of it. It’s best if there’s a lot of direct sunshine. So, if your property is in the shadow of a skyscraper or was built next to a colosseum, you might want to consider moving before going solar!

How much would you save on your electricity bill if you go solar? Solar doesn’t always work out well for everyone. You should have a power bill of at least $300 every quarter and utilise at least half of your energy during daylight hours to get the most out of your solar rooftop panels. This is more of a guideline than anything else. In general, the higher your electricity expense, the more benefit solar panels will provide.

The direction of the roof isn’t important right now. It is, nonetheless, critical. You should have a large North-facing roof to get the most out of solar rooftop panels (if you live in Australia). East-West cooperation is also possible. Especially for setups with an overloaded inverter.

Which Solar Panels and Inverters Should You Purchase?

There are numerous brands of solar panels and inverters to choose from. When selecting a solar panel or inverter, keep the following guidelines in mind:

Panels of solar energy:

Choose a business that has been in operation for a long time.
Avoid panels that try to pass themselves off as European or have special qualities.
Get a few quotations and choose a reasonable price and an excellent product rather than paying top dollar.

Inverter:

If you plan on staying in the house for a long time, pay top dollar for a high-quality product.
If you’re buying for a rental property or won’t be staying long, go for a low-cost panel.

What should your contract contain?

The contract you sign should include all the financial, ownership, and performance requirements. Because these systems can contain web-enabled equipment, you should also check to see if someone is collecting data on your home’s energy production and consumption, and who has access to it.

Conclusion

Going solar rooftop is a major step. Everything changes when you become aware of how much energy you consume. Your attitude toward energy usage shifts. Not only does it make you feel good about not having to pay those dictator power corporations wads of cash every quarter, but it also makes you feel good about doing something nice for the environment.

solarize bharat top solar manufacturers

Take the next step in renewable energy by joining the Solarize Bharat pledge. Imagine your business not just as an entity benefiting from solar power but as a contributor to a nationwide movement, shaping the future of energy in our incredible nation.

Stay solar-powered and environmentally inspired!

P.S.: Share this blog with fellow solar rooftop enthusiasts to spread the word about the exciting world of solar energy!

News & Press, Soleos

How Gujarat’s New Net Metering Policy Boosts Rooftop Solar Adoption

Posted on by Bhavesh Rathod
Net Metering
05
Dec

Gujarat, one of India’s leading states in solar energy production, has introduced a new net metering policy aimed at accelerating the adoption of rooftop solar systems. This policy plays a pivotal role in shaping the state’s renewable energy landscape, making solar power more accessible and financially rewarding for both residential and commercial users. The revamped policy encourages homeowners, businesses, and industries to harness solar energy while contributing to the state’s ambitious clean energy targets.

In this article, we explore how Gujarat’s new net metering policy is boosting rooftop solar adoption and transforming the state’s energy ecosystem.

The Gujarat Electricity Regulatory Commission (GERC) has revised the Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) Regulations, 2016. According to the new Gujarat Electricity Regulatory Commission (Net Metering Rooftop Solar PV Grid Interactive Systems) (Third Amendment) Regulations, 2022, net metering will be permitted for rooftop solar systems with capacities ranging from 1 kW to 1 MW. Rooftop solar systems with capacities ranging from 10 kW to 1 MW will be eligible for gross metering.

Residential rooftop solar projects will be permitted under the new regulations, regardless of the sanctioned load. Consumers can take advantage of the program’s incentives. For captive consumers and projects set up under third-party sale within the permissible limit, there will be no capacity restrictions up to the sanctioned load demand. If a rooftop project set up under the gross metering mechanism by a residential or government consumer is located on their property, the DISCOM will purchase ownership or legal possession of the property under the Policy for Development of Small Scale Distributed Solar
Projects, 2019.

Solar project installation will be permitted up to the sanctioned load for projects established under the renewable energy certificate (REC) the mechanism for captive use or third-party sale. The capacity of solar projects built to meet renewable purchase obligation (RPO) requirements will be permitted regardless of their sanctioned load.

Understanding Net Metering

Net metering is a billing mechanism that allows solar energy users to receive credits for the electricity they generate and send back to the grid. When solar panels produce more electricity than a household or business needs, the excess power is exported to the grid, and users receive credits on their electricity bills. During periods of low solar generation, such as at night, users can draw power from the grid while offsetting the cost with the credits earned earlier.

Gujarat’s new net metering policy enhances this process, making it more attractive for individuals and businesses to invest in rooftop solar installations.

Residential and Government Projects

Rooftop solar projects installed on residential consumers’ rooftops will be permitted, regardless of the sanctioned load. A developer can also set up a solar project on the rooftop of a residential customer to generate and sell power to another consumer on the same premises under a third-party sale. In this case, the developer and consumer must enter into a lease or power sale agreement.

DISCOM must purchase power at 2.25 ($0.029)/kWh for the first five years from the project’s commissioning in the case of self-owned systems and SURYA Gujarat project consumers. Following that, they should purchase it at 75% of the simple average of the tariff discovered and contracted under GUVNL’s competitive bidding process for non-park-based solar projects in the preceding six months from the project’s commercial operation.

For projects set up for third-party sale, DISCOM must purchase the power at 75 percent of the simple average tariff discovered and contracted under GUVNL’s competitive bidding process for non-park-based solar projects in the six months preceding the project’s commercial operation.
The same must be fixed for the duration of the contract. GUVNL will declare such rates on a six-monthly basis, and they will be applicable under the agreement that Soleos will execute with the consumer. Residential consumers will not be charged any bank fees for using solar power.

Captive Project

There will be no capacity restrictions in this category. The captive consumer must make use of the energy produced by such a project. Annual documentation must be submitted to prove ownership of the captive solar-generating project and its annual energy consumption.

In the case of solar projects set up for captive use by HT or EHV consumers, energy set-off will be permitted between 7.00 and 18.00 hours on the same day. After the specified period, the surplus energy should be purchased by the respective DISCOM.

The energy set-off period for solar projects set up by LT demand-based consumers for captive use will be between 7.00 and 18.00 hours. The surplus energy not consumed by the customer during the period after set-off should be compensated by the respective DISCOMs using the surplus injection compensation (SIC) rates.

Surplus injection compensation rates for projects established by micro, small, and medium (MSM) manufacturing enterprises will be 2.25 ($0.029)/kWh for the first five years following project commissioning. They must later purchase it at 75% of the simple average tariff discovered by GUVNL for non-park-based solar projects in the six months preceding the project’s commercial operation. The tariff will be in effect for the duration of the agreement.

For projects set by non-MSMEs, the surplus injection compensation rate will be 75% of the simple average tariff discovered and contracted under GUVNL’s competitive bidding process for non-park-based solar projects in the six months preceding the project’s commercial operation. The same will apply for the duration of the agreement.

Solar energy consumed by demand-based consumers will be subject to banking charges of 1.50 ($0.019)/kWh. Banking charges of 1.10 ($0.014)/kWh will apply to MSME manufacturing units and other than demand-based consumers. Government buildings will not be levied with banking fees.

Third-Party Sale of Project

The sale of electricity to third-party consumers by the owner of a solar power project will be considered a third-party sale. Developers can also install projects on consumers’ rooftops to generate and sell power through a lease or power purchase agreement.
Energy set-off will be permitted between 7:00 and 18:00 hours of the same day for solar rooftop projects set up by HT/EHV consumers and LT demand-based consumers. After the specified period, DISCOMs should purchase any surplus energy.

DISCOMs must compensate the consumer for any excess energy not consumed during the set-off period at 75% of the simple average of the tariff discovered by GUVNL for non-park-based solar projects in the six months preceding the project’s commercial operation. The same will remain constant for the duration of the contract.

Solar energy consumed by demand-based consumers will incur banking charges of 1.50 ($0.019)/kWh. A banking charge of $1.10 ($0.014)/kWh will be applied to MSME units other than LT demand-based consumers. Government buildings will not be subject to banking fees.

Rooftop solar projects under the REC mechanism can be established in accordance with the Central Electricity Regulatory Commission’s administrative procedures for registration and accreditation (CERC).

The energy accounting for projects established under the REC mechanism should be done in 15-minute time blocks.

Surplus energy after being set off on a 15-minute time block basis should be compensated by DISCOMs at 65 percent of the simple average of the tariff discovered by GUVNL for non-park-based solar projects in the preceding six months from the project’s commercial operation in the case of projects set up for captive or third-party sale under the REC mechanism. The tariff will be in effect for the duration of the agreement.

A tariff of 65 percent of the simple average tariff for solar projects located outside of solar parks in the six months preceding the signing of the PPA will apply to DISCOMs agreeing to purchase electricity under the REC mechanism. The tariff will be in place for the duration of the agreement.

There will be no banking fees. Cross subsidy surcharges and additional surcharges, as determined by the Commission, will be applied to projects set up for third-party sale. Transmission and wheeling charges and losses will be assessed based on the project’s location and point of consumption.

Projects Set For RPO Complaince

Customers will be able to create projects to meet their RPO requirements regardless of contracted demand. Energy accounting for such projects must be done in 15-minute increments.

DISCOM will consider purchasing surplus solar energy from captive or third-party solar projects to fulfil its RPO. The DISCOM will compensate the excess energy injected into the grid at 75% of the simple average of the tariff discovered and contracted through a competitive bidding process conducted by GUVNL for non-park-based solar projects, and this compensation will be valid for the duration of the agreement. There will be no banking fees to pay.

When power wheeling or transmission for captive consumption is permitted with open access permission, the transmission charges and losses, wheeling charges, and unit losses that apply to regular open access consumers will be applied.

Cross Subsidy Surcharge And Additional Surcharge

Cross subsidy surcharges and additional surcharges will not apply to captive projects. The cross subsidy surcharge and additional surcharge will be the same for projects set up for third-party sale as they are for regular open access consumers.

GERC reiterated in February that DISCOMs procuring surplus energy from rooftop solar projects must use the state’s average power purchase cost of 4 ($0.053)/kWh as the ceiling for the fiscal years 2020–21.

Cost-benefit

The homeowner can conduct a cost analysis and determine the amount of electricity required to be profitable. This could encompass both the quantity of power that can be sent to the grid to produce more cash and satisfy the homeowner’s power needs.

Rooftop solar systems are becoming increasingly popular as a source of electric power since they are renewable and abundant during the day. Implementing an appropriate rooftop solar system with careful planning can result in an endless supply of electric power with low recurrent costs.

Is solar energy a good fit for your home?

This is unquestionably the most important item to understand before installing solar panels. So, how can you know if your home is solar-ready? Here’s a list of “indicators” to look for when determining whether your home is solar-ready:

Solar panels don’t perform well in the shade, thus there should be very little of it. It’s best if there’s a lot of direct sunshine. So, if your property is in the shadow of a skyscraper or was built next to a colosseum, you might want to consider moving before going solar!

How much would you save on your electricity bill if you go solar? Solar doesn’t always work out well for everyone. You should have a power bill of at least $300 every quarter and utilise at least half of your energy during daylight hours to get the most out of your solar panels. This is more of a guideline than anything else. In general, the higher your electricity expense, the more benefit solar panels will provide.

The direction of the roof isn’t important right now. It is, nonetheless, critical. You should have a large North-facing roof to get the most out of solar panels (if you live in Australia). East-West cooperation is also possible. Especially for setups with an overloaded inverter.

Which Solar Panels and Inverters Should You Purchase?

There are numerous brands of solar panels and inverters to choose from. When selecting a solar panel or inverter, keep the following guidelines in mind:

Panels of solar energy:

Choose a business that has been in operation for a long time.
Avoid panels that try to pass themselves off as European or have special qualities.
Get a few quotations and choose a reasonable price and an excellent product rather than paying top dollar.

Inverter:

If you plan on staying in the house for a long time, pay top dollar for a high-quality product.
If you’re buying for a rental property or won’t be staying long, go for a low-cost panel.

What should your contract contain?

The contract you sign should include all the financial, ownership, and performance requirements. Because these systems can contain web-enabled equipment, you should also check to see if someone is collecting data on your home’s energy production and consumption and who has access to it.

Key Features of Gujarat’s New Net Metering Policy

  1. Increased Capacity Limits
    • The new policy increases the upper limit for rooftop solar system capacity, allowing consumers to install larger solar systems. This is particularly beneficial for industrial and commercial users who require higher energy consumption and have more extensive rooftops available for solar installations.
  2. Simplified Procedures
    • The government has simplified the application and installation process for rooftop solar systems. By streamlining procedures, the policy removes bureaucratic hurdles, making it easier and faster for consumers to adopt solar energy.
  3. Financial Incentives and Subsidies
    • The state offers financial incentives and subsidies to reduce the upfront cost of installing rooftop solar systems. These incentives, coupled with the cost-saving benefits of net metering, make solar energy an economically viable option for many.
  4. Time-of-Day Tariffs
    • Under the new policy, Gujarat introduces time-of-day tariffs, where solar power generation during peak hours earns higher credits. This encourages users to maximize their solar energy production during high-demand periods, further increasing savings.
  5. Flexible Billing Options
    • The new net metering framework allows consumers to carry forward excess credits for an extended period, ensuring that users can benefit from their surplus solar energy across different seasons. This flexibility enhances the financial returns on rooftop solar installations.

Boosting Rooftop Solar Adoption in Gujarat

1. Cost Savings for Consumers

  • One of the primary advantages of the new net metering policy is the significant cost savings for consumers. By exporting excess electricity to the grid, users can lower their electricity bills, often reducing their energy costs by 50% or more. With the increasing affordability of solar panels and installation, rooftop solar becomes an appealing option for a broader range of consumers.

2. Increased Awareness and Accessibility

  • Gujarat’s government has initiated awareness campaigns to educate consumers about the benefits of solar energy and net metering. These efforts aim to demystify the technology and inform users of the financial advantages. Coupled with simplified procedures and better incentives, this has made rooftop solar more accessible to middle-class households and small businesses.

3. Support for Commercial and Industrial Users

  • The new policy is particularly beneficial for the commercial and industrial sectors, which have higher electricity demands. With increased capacity limits and better financial incentives, businesses can offset a more substantial portion of their energy needs with rooftop solar systems. This helps industries lower operational costs and meet sustainability goals.

4. Environmental Impact

  • Gujarat’s commitment to renewable energy is not just about economic benefits; it’s also about reducing the state’s carbon footprint. By promoting rooftop solar adoption, the state contributes to reducing greenhouse gas emissions, improving air quality, and promoting sustainable energy practices. The new policy aligns with India’s national target of achieving 450 GW of renewable energy by 2030.

5. Job Creation and Economic Growth

  • The growing demand for rooftop solar installations is expected to create jobs in the renewable energy sector, particularly in installation, maintenance, and manufacturing of solar components. This will contribute to Gujarat’s economic growth while supporting the transition to a green economy.

Conclusion

Gujarat’s new net metering policy marks a significant step toward boosting rooftop solar adoption in the state. By increasing capacity limits, simplifying processes, and offering financial incentives, the policy makes solar energy more accessible and financially attractive to consumers across residential, commercial, and industrial sectors. As more consumers embrace rooftop solar, Gujarat is poised to lead India’s renewable energy revolution, setting an example for other states to follow.

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The future of Gujarat’s energy landscape is brighter than ever, powered by the sun and driven by innovative policies that encourage sustainable development. With the right infrastructure and continued government support, rooftop solar could become a mainstream energy solution, empowering consumers and contributing to a greener, more sustainable future.

Take the next step in renewable energy by joining the Solarize Bharat pledge. Imagine your business not just as an entity benefiting from solar power but as a contributor to a nationwide movement, shaping the future of energy in our incredible nation.

Stay solar-powered and environmentally inspired!

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