Rooftop solar potential could boost India’s energy transition

A new independent report by the Council on Energy, Environment and Water (CEEW) released recently has said that over 250 million households across India have the potential to deploy 637 GW of solar energy capacity on rooftops. The CEEW report said that deploying just one-third of this total solar technical potential could support the entire electricity demand of India’s residential sector (about 310 TWh). However, the technical potential reduces to one-fifth (118 GW) after factoring in the current electricity consumption of households.

“Most residential consumers fall into low-consumption slabs and solar may not be economically feasible for them without financial support even though it is technically possible,” the report states, and highlighted by a CEEW press release. The potential reduces further to 11 GW when no capital subsidy is considered. The potential reduces further to 11 GW when no capital subsidy is considered, the payback period for rooftop solar is restricted to five years and we factor in consumers’ willingness to buy rooftop solar. However, with the Ministry of New and Renewable Energy’s capital subsidy, the potential increases to 32 GW making the solar systems feasible for more consumers. Currently, India has installed 11 GW of rooftop solar capacity, of which only 2.7 GW is in the residential sector, according to the CEEW press release.

The CEEW report, supported by Bloomberg Philanthropies, did a bottom-up analysis across 21 Indian states that cover 97% of the country’s population. It found that 60% of the residential rooftop potential is concentrated in just seven states — Uttar Pradesh, Maharashtra, West Bengal, Odisha, Rajasthan, Andhra Pradesh, and Tamil Nadu.

Titled ‘Mapping India’s Residential Rooftop Solar Potential’, the CEEW report is a result of a detailed assessment of the technical, economic, and market potential of deploying rooftop solar (RTS) in Indian households by adopting the bottom-up approach, i.e., starting at the household level. The study utilises the primary data collected in India Residential Energy Survey (IRES) of 14,850 households spanning across 21 states and 152 districts in 2020. The assessment further provides insights into the RTS potential of different states, the urban-rural split, and the potential for different system sizes.

Rooftop solar provides an opportunity for households to contribute significantly to the ongoing energy transition by substituting their electricity consumption with solar. The true economic and market potential can be captured only by considering households’ economic strength and energy footprint. India’s rooftop solar potential is spread geographically across states in contrast to other renewable technologies such as utility-scale solar and wind projects and could be critical to the energy transition ambitions of states. Moreover, rural areas show higher technical potential based on residential rooftop area (363 GW) compared to urban areas across states (274 GW), as per the report.

The CEEW report also found that residential awareness of rooftop solar systems was less than 50 per cent at the national level in FY2020. Awareness in most states was clustered between 30 and 50 per cent. When it came to willingness to install rooftop solar systems, residential consumers in Gujarat showed the highest willingness at 13 per cent, compared to the national average of 5 per cent. However, residents across states perceive rooftop solar systems to be costly investments, impacting their willingness to pay.

The issue brief of the report on the CEEW website says that according to Bridge to India’s Solar Rooftop Map (June 2023), the residential rooftop solar installed capacity in India is 2.7 GW. India has set a target of 40 GW of rooftop solar by 2022, out of which ~11 GW has been achieved as of 31.10.2023. Rooftop solar can help consumers save on their electricity bill with the use of available roof space. It also provides residential consumers access to reliable and clean electricity and an opportunity to contribute significantly to India’s energy transition. Rooftop solar also reduces T&D losses as the points of electricity generation and consumption are colocated. The payback period for rooftop solar in India will vary based on the system size, electricity generation and consumption, subsidy availed and so on. The study considers a payback period of less than 5 years to estimate the market potential. The Ministry of New and Renewable Energy (MNRE) has a grid-connected rooftop solar program. The program currently in its second phase which has been extended till 31 March 2026. According to another CEEW study released recently, solarising residential households also offers huge economic benefits to power distribution companies (discoms).