PM Surya Ghar scheme: Balance consumer equity with discom stability

However, it raises a important question: tin the strategy guarantee viability for some the beneficiaries and organisation companies (discoms)? With the existent level of rooftop star installations astatine astir 11 GW, a challenging travel lies ahead. Also, it isn’t conscionable important to see the aggregate deployment complaint arsenic a marker of success, but besides the contented of equity.

A cardinal diagnostic of the Surya Ghar Yojana is the accrued superior subsidy for smaller capacities (up to 3 kW), maxing retired astatine ₹78,000. The intent and messaging of the scheme’s ‘300 escaped units’ is clear. The authorities aims to code vigor equity, with the dual benefits of boosting household incomes and promoting vigor security. The targeting of these circumstantial consumers is besides a strategical determination from the position of discoms. These households typically autumn successful the little tariff slab and are often cross-subsidized by higher-paying commercialized and concern (C&I) consumers.

The mentation and intent are clear. However, it remains to beryllium seen whether the enhanced superior subsidy volition sufficiently pull the intended beneficiaries. Major hurdles see constricted rooftop abstraction among these consumers and the information that they already person subsidized oregon adjacent escaped powerfulness successful immoderate states, thereby limiting their information to marque the superior expenditure, adjacent with subsidies and government-supported loans.

Having built elaborate models connected stakeholders, incentives and costs arsenic good arsenic benefits, our archetypal findings bespeak that determination is simply a notable disparity successful the payback play for antithetic consumers, depending connected their rooftop star size and yearly energy consumption. For instance, a user with a 1kW highest capableness strategy consuming astir 1,000kilowatt-hours (kWh) energy annually would request astir 10 years to recoup the investment. 

In contrast, an 8kW rooftop star consumer—ostensibly a richer person—consuming astir 6,000kWh annually would spot a payback successful conscionable six years. The payback play could beryllium adjacent longer for systems smaller than 1kW, which are communal successful low-income households. This is due to the fact that larger (and apt richer) consumers person higher tariff slabs, and frankincense a greater worth for the generated star power.

Who installs rooftop star is an important adaptable for those connected the different side, the discoms, due to the fact that it has large fiscal implications. Because user tariffs are mostly progressive (lower tariff slabs for little measurement consumers), the discoms would not similar their “paying customers" successful higher slabs to determination distant oregon devour little electricity.

The different situation for the discoms related to the mode rooftop star is presently metered and billed. It’s astir intolerable for user request to precisely lucifer the output from the rooftop solar. If the rooftop star under-generates compared to demand, the discom becomes the supplier. But precise often, successful the mediate of the day, the rooftop star volition over-generate and this excess is fed into the discom’s network. How we relationship for this vigor is important.

Most residential star engages “net metering", which means that the excess vigor exported by consumers to the grid is offset by their non-solar time-period consumption, lowering the monthly billed measurement of energy. This lowers the full consumption, and it besides lowers the tariff slab of depletion for the consumer, further lowering discom revenues. 

There is yet different outgo upon the discom owed to time-of-day differences successful powerfulness costs. In the mediate of the day, star parks tin supply cheaper powerfulness and truthful the worth of the star powerfulness from the rooftop star is debased to the discom. In contrast, erstwhile they proviso powerfulness backmost mostly successful the evening, they indispensable procure costly highest power. This cannot sustain.

Digging into financials adjacent deeper, utilizing granular information crossed 11 large states, our studies uncover that a sizeable information of the fixed costs for each user categories—residential, commercialized and industrial—is recovered done vigor charges. This outgo betterment distortion successful tariffs means that residential consumers wage disproportionally little for fixed charges, which are lone 13% of the full measure (excluding energy duty). However, the fixed cost's stock successful the mean outgo of proviso amounts to 53% of the full cost. This outgo betterment is astatine hazard with rooftop solar, which lowers the vigor offtake but keeps the infrastructure costs the aforesaid for the discom.

In conclusion, the scalability of the Surya Ghar Yojana is contingent connected respective important factors, including due terms signalling, businesslike grid absorption for handling section issues, and well-structured curtailment policies. Storage tin assistance but is presently precise expensive. In the agelong run, tin superior subsidies for rooftop star beryllium utilized to offset tariff subsidies for consumers? Right now, they get both. 

Neglecting specified aspects could perchance effect successful bottlenecks hindering the initiative's effectual absorption and scaling. Ultimately, achieving occurrence successful the Surya Ghar Yojana requires a delicate equilibrium betwixt ensuring fiscal equity for consumers and maintaining the fiscal stableness of discoms.

These are the authors’ idiosyncratic views.

Niteesh Shanbog, Sharath Rao and Rahul Tongia are, respectively, a probe analyst, chap and elder chap astatine the Centre for Social and Economic Progress (CSEP).

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Published: 10 May 2024, 03:30 PM IST