1

WORKSHOP SUMMARY REPORT

WWF-INDIA & SOLAR ENERGY CORPORATION OF INDIA (SECI)

Knowledge Partner: BRIDGE TO INDIA

2

Background

A workshop on “Business Perspectives on Rooftop Solar PV Market in India” was jointly organized by WWF-India and Solar Energy Corporation of India (SECI) on 29 June 2016 at WWF-India, New Delhi. Bridge to India was the Knowledge Partner for the workshop. A range of key stakeholders participated in the workshop including, renewable energy developers, utilities, financial institutions, bilateral organisations, think-tanks, consultancy firms, and commercial and residential consumers of solar rooftop.

The objective of the workshop was to facilitate a multi-stakeholder discussion to understand the perspective of private sector players on the current ecosystem of rooftop solar PV market, business models in place, and identify key challenges and possible solutions. It also aimed to contemplate/explore possible interventions to jumpstart the rooftop solar market through innovative finance mechanisms and consumer awareness.

Inaugural Session

Dr. T.S. Panwar, Director – Climate Change & Energy, WWF-India welcomed the workshop participants and opened the discussions with an introduction to the renewable energy scenario in particular, the rooftop segment. Dr Panwar encapsulated the learning from the rooftop solar workshop held last year on solar rooftop organised by WWF-India titled, “Building momentum for a clean energy revolution”. The earlier workshop had delved into a broader ecosystem of rooftop solar market and brought forward discussions on policy and technical aspects, financial vehicles and role of CSOs in creating a solar based market – the key take away being that in order to meet the ambitious target of 40GW of rooftop solar, there is an urgent need to tap the residential sector as well through enhanced role of the business sector and innovative financial mechanisms. The present workshop was a follow-up to that and aimed at deliberating on the business aspects in greater detail.

Dr. Ashvini Kumar, Managing Director, SECI, in his remarks, emphasised that India’s ambitious renewable energy targets can be achieved or even surpassed since the country is on the right track in terms of exploring the existing potential for renewables. With respect to solar rooftop, he mentioned that there is a potential of 42,000MW in institutions such as schools, colleges and hospitals alone. The best efforts are being made by the government to monitor, identify the gaps and aggressively follow up on the achievement of targets. For instance, UDAY scheme for improving financial health of DISCOMs and strict enforcement of RPO compliance through recent amendment in National Tariff Policy have been undertaken. 27 states and a few UTs have net-metering policies, though not all of these are at an implementation stage. There is need to work out the profile of solar RPOs. He also said that the market is not a problem rather delivery is an issue, and emphasised on the need to enhance capacities and capabilities. Mr Kumar also highlighted the requirement of finance for the success of the RESCO model. He expressed confidence that the rooftop sector is making the right headway. He lauded WWF-India’s efforts to promote renewable energy applications through its interventions and called it a natural ally. He concluded his remarks by saying that SECI would be happy to take forward recommendations emerging from the workshop.

L: Dr Ashvini Kumar, SECI;R: Dr T.S. Panwar, WWF-India

3

Session 1: Business Case for the Commercial and Industrial Rooftop Solar Segment in India

Moderator: Mr. Rakesh Kumar, Director (PS), Solar Energy Corporation of India (SECI)

Panelists: Mr. Kiran Kumar Alla, Head - Central Engg Services, BSES Rajdhani Power; Mr. Pawan Kumar Agrawal, President, Corporate Finance, YES Bank; Mr Amit Kumar, General Manager, TATA Power Solar; Mr. Arjun Guha, Energy Sector Specialist, KfW India Office; Mr. Jasmeet Khurana, Associate Director-Consulting, Bridge to India.

The first session on “Business Case for the Commercial and Industrial Rooftop Solar Segment in India” started with an overview of the rooftop solar segment in India by Mr Jasmeet Khurana. This was followed by a panel discussion on the policies, barriers and initiatives in the commercial and industrial rooftop solar segment in India. According to Bridge to India analysis, India can be expected to add 15GW rooftop solar by 2022 as per current trends and policies in place. The need to expedite net metering came out prominently during the discussions. Improved implementation, attracting third party investors and lenders, and greater consumer awareness were identified as key issues that need to be addressed. Mr Amit Kumar highlighted that rooftop solutions need to reach even those areas that do not have grid connectivity, and hence the issue of storage requires greater attention. He also raised concerns regarding the availability of spares in due course due to rapidly changing technology and the need for easy access to domestic finance. Indian companies are presently acting only as aggregators. Mr Kiran Kumar Alla listed the various pros and cons of rooftop solar from a DISCOM perspective. He informed that solar rooftop has become attractive for the commercial & industrial segment, which is evident from the fact that category tariff parity has been achieved. He said that there is adequate push from the government and the vendor ecosystem is also coming in place gradually. The domestic users are also coming forward, but it is important to make funding available to consumers for greater uptake. He mentioned that various FAQs and the requisite forms for net metering have been listed on their website for use by consumers.

Mr Pawan Kumar Agrawal emphasized the need to simplify net metering policy. He said that the money available was presently not going to the available pipeline of projects and banks are wary of financing projects since they are not sure of the technical problems that they may face. Mr Arjun Guha informed the gathering about KfW’s line of credit signed with IREDA in October 2015. So far, 2-3 projects have been supported through SIDBI innovation fund on a working capital basis at a rate of 13-16 per cent. Mr Guha also suggested formation of an industry association for the rooftop sector to ensure greater coherence and push for an agenda for higher uptake. He was of the opinion that net metering is the key for bankability. From the audience, Mr. Y.K. Jain of National Solar Energy Federation of India (NSEFI) talked about the challenges faced by residential net metering linked consumers such as non-regularisation of electricity bills and, O & M and labour costs for cleaning being higher than envisaged.

The panel agreed on the importance of improved net metering implementation including expediting the processing of net metering application as well as removing restrictions on the system size, thus providing more flexibility to customers. In addition, DISCOMs should be seen as stakeholders and measures must be taken for building their capacity in order to equip them to meet the complex challenges and risks.

From L to R: Mr Rakesh Kumar, SECI; Mr Amit Kumar, TATA Power Solar; Mr. Kiran Kumar Alla, BSES Rajdhani Power; Mr. Pawan Kumar Agrawal, YES Bank;

Mr. Arjun Guha, KfW; Mr. Jasmeet Khurana, Bridge to India

4

Session 2: Creating Momentum for the Residential Rooftop Solar in India

Moderator: Mr. Santosh Kamath, Partner, KPMG

Panelists: Mr. Hemant Bhatnagar, Senior Advisor, GIZ India; Mr. Sugata Mukherjee, Head of Group (Solar & New Businesses), Tata Power Delhi Distribution Limited (TPDDL); Mr. Akhilesh Magal, Head Solar Advisor, Gujarat Energy Research and Management Institute (GERMI) The second session on “Creating Momentum for the Residential Rooftop Solar in India” started with an overview presentation by Mr. Santosh Kamath on the barriers, opportunities and best practices in the residential solar rooftop segment in India. This was followed by a panel discussion on upscaling rooftop solar solutions in this segment. Mr Kamath informed that soft costs (customer acquisition, installation, labour costs, etc.) constitute over 30 per cent of the overall rooftop system costs for small scale applications (<50kW). He further said that in order to make an economic case for a utility to support utility driven solar rooftop model, the focus should be on reducing the soft costs. According to KPMG analysis, economic cost differential between solar rooftop power and grid power is about INR 0.97/kWh. Enabling finance to support rooftop solar would lead to higher adoption. Tapping into long tenure housing finance and home improvement loans, and third party ownership/leasing were proposed as possible models that could be explored. In addition, there could also be innovative models where the utility itself acts as the aggregator.

Mr Sugata Mukherjee laid thrust on the need for consumer awareness saying that partial knowledge is also a hindrance. He said that it is beneficial to promote solar rooftop to residential customers, as that would reduce the cross-subsidy burden on the state governments. Also, performance of the solar projects needs to be monitored. Mr Bhatnagar listed the efforts undertaken by GIZ in rooftop arena. Mr. Akhilesh Magal said that the utility has to be a partner for rooftop solar to be a success, and therefore it is important to create means to incentivize DISCOMs. He also suggested that the entire approval process for net metering applications should be made online to accelerate the process as well as provide better access to information. Subsidy disbursement could also be online and directly into the bank accounts of beneficiaries, similar to the LPG subsidy process.

Way Forward Dr T.S. Panwar said that the key points emerging from the two panel discussions have provided a number of suggestions for the way forward. He further added that though there are a number of issues that need to be resolved, however, the rooftop sector is gradually picking up and has the potential to become a “people’s movement”. The implementation of net metering is crucial to the success of solar rooftop. As a way forward, it is important to collate the best practices and bring the knowledge to the public domain as well as look for opportunities for collaboration between organisations in this domain so as to build on the synergies that exist. He pointed out that CSOs have an important role to in creating awareness and bridging information gaps, thus providing impetus to the uptake of rooftop solar solutions.

From L to R:Mr. Mr. Hemant Bhatnagar, GIZ India; Mr. Sugata Mukherjee, TPDDL; Mr Santosh Kamath, KPMG; Mr. Akhilesh Magal, GERMI

5

Key Takeaways

There is a need for immediate implementation of Net Metering policies at the state & UT level. The various stakeholders (including government and regulatory bodies, DISCOMs, project developers) should make efforts for streamlining of implementation procedures to ensure greater uptake of rooftop solar solutions.

In order to expedite grid-connected solar rooftop projects, net metering application process should be simplified and made online. Further, online project monitoring of the systems (by DISCOMs) is crucial to gather information regarding system performance.

Need for facilitating innovative finance mechanisms such as long tenure housing finance and home improvement loans, and third party ownership/leasing to support rooftop solar would lead to higher adoption.

There is also a need to promote new business models such as OPEX and lease. This will help attract professional capital to the sector. Policies and regulations need to be formulated so that interests of such new business models are also considered.

For the success of rooftop solar, DISCOMs should be seen as a partner. Therefore, there is need for interventions to incentivize DISCOMs and build their capacities as well in order to equip them to meet the complex challenges and risks. Lessons can be learned from the National LED Program (Ujala), whereby the DISCOMs partnership is a key to the success of the program. A similar thrust can be explored for rooftop solar PV systems.

Need to collect best practices and bring the knowledge to the public domain so as to increase stakeholder awareness, especially for consumers. Besides the government bodies and the DISCOMs, CSOs can play a crucial role in knowledge sharing and awareness generation.

6

Time Name of the Session Speaker/Representatives 9:30 - 10:00 am Registration Inaugural Session 10:00 - 10:10 am Welcome and Introductory Remarks

WWF- India

10:10 - 10:30 am Remarks by Solar Energy Corporation of India

Dr. Ashvini Kumar, Managing Director, SECI

10:30 - 10:45am Tea/Coffee Break & Networking

Session I: Business Case for the Commercial and Industrial Rooftop Solar Segment in India 10:45 - 11:00am Sector Overview Presentation

Mr. Jasmeet Khurana, Associate Director - Consulting, Bridge to India

11:00 am– 12:00 pm Panel Discussion on Aspects of Commercial and Industrial Rooftop Solar Segment (policies, barriers and initiatives)

Moderator : Sh. Rakesh Kumar, Director (PS), SECI Panelists: Mr. Kiran Kumar Alla, Head - Central Engg Services, BSES Rajdhani Power; Pawan Kumar Agrawal, President, Corporate Finance, YES Bank; Mr Amit Kumar, General Manager, TATA Power Solar; Mr. Arjun Guha, Energy Sector Specialist, KfW India Office; Mr. Jasmeet Khurana, Associate Director - Consulting, Bridge to India (Questions and Discussion)

Session II: Creating Momentum for theResidential Rooftop Solar in India 12:00 - 12:15 pm Overview presentation on residential rooftop market in India (barriers,

opportunities and best practices) Mr. Santosh Kamath, Partner, KPMG

12:15 – 01:15 pm Panel Discussion on Upscaling Rooftop Solar Solution in Residential Segment

Moderator : Mr. Santosh Kamath, Partner, KPMG Panelists: Mr. Hemant Bhatnagar, Senior Advisor, GIZ India; Mr. Sugata Mukherjee, Head of Group (Solar & New Businesses), Tata Power Delhi Distribution Limited (TPDDL); Mr. Akhilesh Magal, Head Solar Advisor, Gujarat Energy Research and Management Institute (Questions and Discussion)

Closing Session 01:15- 01:25 pm Way Forward and Closing Remarks Sh. Rakesh Kumar, SECI& Dr. T S Panwar, WWF-

India 01:25- 01:30 pm Vote of Thanks WWF- India 01:30 pm onwards Lunch

WORKSHOP AGENDA

BUSINESS PERSPECTIVES ON ROOFTOP SOLAR PV MARKET IN INDIA

Date: Wednesday, 29 June 2016 |Venue: WWF-India

Knowledge Partner: BRIDGE TO INDIA