Big turn for solar rooftop project investors | 22 August 2016

Consumers who are not entitled to the AAP government’s 50% subsidy on power bills may benefit in the long run by investing in solar rooftop projects. About 15% of Delhi’s consumers don’t get the subsidy as they consume more than 400 units per month.

According to Delhi Citizen’s Handbook 2016, released recently, the biggest consumers of power will benefit the most economically from investing in solar rooftop systems as they have the shortest payback period.

The payback period of investment is 12 years for 400-unit systems,11 years for 600-unit ones and nine years for 1,200-unit systems, the report pointed out. The per-unit cost of solar power is Rs 2.98, Rs 2.79 and Rs 2.75 for these three categories compared to the current discom rates of Rs 4.98, Rs 5.75 and Rs 6.79 per unit.

The Delhi government’s solar policy, approved by the cabinet earlier this year, offers a generation-based incentive (GBI) of Rs 2 per unit to households generating more than 1,000kWh power per year.

But GBIs, the report said, have minimal impact because the cost of procuring solar panels and other equipment is high. “Given that households will take around nine to 12 years to recover the installation costs, an initial monetary push through bigger incentive is desirable,” it recommended.

Since households with highest power consumption have the best economic case to invest in solar rooftop systems, households with lower power consumption should the main target group for the GBI incentive, the report suggested.

It also recommended that resident welfare associations (RWAs) could assist in pooling money to buy solar panels for a colony. This can marginally reduce the per-unit cost incurred by households and ease the burden of the large initial investment. The report also found that the financing method—whether the household pays the entire project cost or takes a loan for 60% of the expenditure has no impact on the payback period.

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