Delhi Solar Policy 2022- A Model For All MegaCities?

The draft Delhi State Solar Policy is finally out for public comments, with a deadline of February 3 for responses. At the outset, the policy sets some ambitious goals for itself.  A total of 6000 MW of installed solar capacity which shall include 750 MW of rooftop solar within the State and 5250 MW of utility scale solar from outside the State. This would ensure that 25% of the annual electricity demand of Delhi shall be met through solar energy.  The city state, which has also one of the highest EV additions in the country now, certainly has a very strong case and need for a higher share of renewable energy.

To achieve these lofty goals, the draft makes the case for much that is old, and some new initiatives too. Readers will see new terms like Group Net Metering, Virtual Power Plants, P2P trading, Community Solar and even a Hybrid RESCO model in this policy document, a welcome sign on the face of it.

Tackling Key Challanges: Rooftops For Rooftop Solar

Rooftop solar, where the city has managed just over 200 MW after years of trying, comes in for special mention. The policy cites issues such as limited availability of capital for consumers, constrained roof space for deployment of RTS systems, limited awareness and complicated process of net metering application for underperformance. To tackle it a broad range of new options are proposed.

It starts with options for consumers who simply do not have rooftops. Here, the Delhi Solar policy proposes Group Net Metering. This is for consumers with multiple buildings and service connections, constrained roof space in one property or electricity service connection can benefit from any excess solar energy generated on any other property (one or more), provided these connections are in the same DISCOM territory. DISCOMs shall facilitate this via Group Net Metering (GNM).

A second option of Community Solar. Under Community Solar, consumers who do not have a suitable roof for installing a solar system (e.g. residential consumers who live in apartments, consumers with small or shaded rooftops) will be able to benefit from solar energy through the facility of ‘Community Solar’. In Community Solar, individual consumers can be beneficial owners of a part of a larger solar
system.

Going beyond this, the document envisages the start of Peer to Peer Trading (P2P) of solar energy. Here, consumers who are planning to or have already adopted solar will have the opportunity to sell their excess electricity generation from their rooftops in real time via a P2P energy trading platform. The platform will serve as an online marketplace and will enable the buying and selling of rooftop solar PV energy between two or more grid-connected parties in the same DISCOM area. Incidentally, this is a model that has already been tried and accepted well in Bangladesh, where solar startup Solshare has led the way.

Capital Constraints

The RESCO model, where consumers effectively pay for the electricity generated on their premises from equipment installed and financed by the developer is given a fresh push in the new policy. Besides a one time registration with the discoms, developers  will not have to get empanelled anywhere under the proposed policy. Apart from net metering benefits, MNRE capital subsidy for Group housing societies/residential consumers and Delhi’s Generation Based Incentives (GBI) shall be available for all eligible consumers who adopt RESCO model.

It has also proposed mandating IPGCL to aggregate demand and issue a centralized tender under both the CAPEX and RESCO model, preferably through RESCO for all Delhi govt. buildings and properties over 500 sq.m.

And then there is the proposed Hybrid Resco Model. This model aims to combine the net-metering agreement between the consumer and DISCOM with a PPA agreement between a RESCO developer and the DISCOM. The model has significant benefits for consumers, as they can adopt RTS without any upfront cost, receive net-metering benefits under one bill from DISCOM, and also slide to a lower tariff slab. This model is also beneficial for developers as they sign a PPA with the DISCOM with assured off-take and payment security.

Under this model, the RESCO developer gets paid directly by the DISCOM via the PPA. The DISCOM, in turn, bills the consumer for solar power consumed at the PPA rate, as part of a single unified bill for energy consumed (i.e. for solar energy consumed and for electricity imported from the grid). The PPA tariffs for hybrid RESCO shall be discovered through a competitive bid process, and shall be approved by DERC.

Besides the MNRE subsidies, the state policy adds a Capital subsidy for raised mounting structures for residential customers GNCTD will provide a subsidy for raised mounting structures at the rate of Rs 2,000 per kW upto a maximum of Rs. 10,000 per consumer. Raised structures which have a minimum ground clearance of greater than 6 feet will qualify for this subsidy. The subsidy will be passed through their first electricity bill post commissioning of the RTS system.

A state portal as envisaged in the national policy of MNRE is also planned, with a single window clearance for consumers opting for capex based plants. All discom procedures will also be standardised. Exemption from inspection of solar plants up to 500 KVA capacities from Electrical Inspector in line with Ministry of Power notification dated 16.05.2016 has also been proposed. A free solar assessment of any property within 7 days of a request is also promised to provide consumers a better understanding of solar potential.

The policy promises that GNCTD (Government of the national capital territory of Delhi) shall ensure that taxes and duties are not levied on generation from RTS, whether for self-consumption or supplied to the grid.

Besides this, once notified with changes, the policy promises to activate relevant bodies and agencies to execute the same within a period of 60 days, be it the discoms, GNCTD, or others.

View: For a state that has consistently underachieved on its targets for solar, the draft policy seems to be a strong document that seeks to cover all bases, after learning from the mistakes of the past. We believe it is a model that other mega cities like Mumbai, Bengaluru, Chennai, Hyderabad and others can learn from, as our urban centres are not just hot spots of energy consumption, but also have the economic might to move faster on solar adoption and related energy storage infrastructure. Even as India as a whole targets net zero by 2070, or 50% power from renewable sources by 2030, our cities need to seek to do much more, earlier.

To read the full draft, click here.