The decline in the cost of solar systems and subsidies from the governments make solar systems affordable
The adoption of residential solar systems is picking up in India and with greater awareness and tremendous growth potential. To get a first-hand experience, Mercom spoke to several consumers who have installed rooftop solar systems at their homes. Here is what they had to share about the capital investment, savings on power bills, and environmental benefits of installing a solar system at home.
System cost and subsidy
The average capacity of rooftop systems installed at homes ranges between 1 kW and 10 kW depending on the capacity allowed by distribution companies and ideal roof space availability. The system cost to install a 1 kW rooftop solar system can range between ₹45,000 (~$612) and ₹85,000 (~$1,156).
Ramniklal Patanvariya, a resident of Rajkot in Gujarat, said it cost him around ₹1,39,000 (~$1,908) to install a 3 kW rooftop solar system. “However, I received around ₹55,604 (~$764) or 40% of the project cost as a subsidy that made the system affordable.”
The Ministry of New and Renewable Energy (MNRE) provides subsidies for residential rooftop solar systems. Rooftop solar systems up to 3 kW will qualify for a subsidy of 40%. Systems above 3 kW and up to 10 kW get a subsidy of 40% for the first 3 kW and 20% for the remaining capacity, and for systems above 10 kW, it is 40% for the first 3kW and 20% for the remaining 7 kW.
Achal Jain, a resident of Gurugram in Haryana, said, “I set up a 5 kW system three years back with an upfront cost of around ₹350,000 (~$4,804), and received approximately ₹120,000 (~$1,647) or around one-third of the total cost in subsidy. However, I did not receive any subsidy to increase the capacity of the system up to 15 kW, which cost me around ₹500,000 (~$6,865).”
Jitendra Dhami, Chairman of Savan Status, a residential society in Rajkot, Gujarat, said, “We recently installed an 85 kW rooftop solar system to cut power cost of common amenities and contribute to saving the environment. “The system cost us around ₹3.3 million (~$45,312), but we got a subsidy of over ₹700,000 (~$9,611) from the government that reduced the overall cost of the system to nearly ₹2.5 million (~$34,327).”
For group housing societies and residential welfare associations, the MNRE subsidy is limited to 20% for installing the rooftop solar system for the supply of power to common facilities. The capacity eligible for subsidy is limited to 10 kW per house, with no more than 500 kW, inclusive of rooftop solar systems already installed on the individual houses.
Recently, Gujarat announced its new ‘Gujarat Solar Power Policy 2021’ with incentives for residential, commercial, and industrial rooftop solar developers. Maharashtra government also set the target to install 2 GW of rooftop solar projects by 2025 in its new renewable policy.
Savings on power bills
Patanvariya said, “I used to pay around ₹1,500 (~$20.58) for electricity bill as electricity tariff is around ₹6.5/unit. After installing a 3 kW solar system, I am earning around ₹800 (~$10.98) monthly by generating clean energy instead of paying power bills.”
According to Jain, there are significant monetary benefits of installing a rooftop solar system on homes. He said, “I used to save around ₹6,000 (~$82.37) monthly on my electricity bills with a 5 kW rooftop solar system. Recently, I installed an additional 10 kW capacity to reduce my power bill from ₹18,000 (~$247) per month to zero.”
Dhami also echoed similar views. He said, “The 85 kW solar system neutralizes monthly power bills for common amenities of society, which is usually in the ₹115,000 (~$1,578) to ₹127,000 (~$1,742) range. And it generates additional 9,000 units of clean energy monthly.”
Savings or income earned from any rooftop projects purely depends on the consumer’s contracted load and the rules of the state power distribution companies. The billing mechanisms vary across distribution companies, and the scenario of offsetting or savings with the monthly bill is the common benefit of installing rooftop solar systems.
Climate change is affecting every individual around the world. Consumers can contribute to cut the negative impacts of climate change by installing rooftop solar systems on their homes.
Dhami said, “We can contribute to saving the environment by using natural energy sources like solar to generate clean energy as the government is also focusing on maximizing the use of solar energy. This will help reduce the use of coal-fired power and pollution.”
Patanvariya commented, ‘we can help save the environment by generating clean energy through natural resources like solar without polluting the world.”
Endorsing Patanvariya’s thoughts, Jain said, “we have to reduce fossil-fuel use that pollute the environment and shift towards clean energy resources.”
Consumers we talked to were clearly aware of the monetary benefits and the environmental good they do by going solar.
Mercom has written a series of articles on residential rooftop solar that provides vital information about system cost, savings on electricity, and system financing.
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