Climate change has been regarded as one of our generation’s greatest challenges. The Intergovernmental Panel on the Climate Change (IPCC) just released a report that emphasizes the need for quick action on this issue. Though in the perfect scenario, the global warming threshold of 1.5 degrees Celsius will be breached by mid-century, there is still time to steer the future direction of climate change and bring temperatures down by the end of the century.
However, this will necessitate substantial emission reductions and the achievement of net-zero targets by governments all over the world. India has emerged as the frontrunner in the fight against it. India is on track to meet the Paris Agreement’s goals and is among the few nations that are currently “2 degrees compatible.”
Commercial and industrial (C&I) clients are critical to India’s achievement of its goals, accounting for almost half of overall energy consumption. Additionally, for a variety of reasons, including economic benefits, regulatory compliance, sustainability, and energy security, businesses are actively looking to acquire renewable energy. Rooftop solar installations, Renewable Energy Certificates and Open Access (OA) are currently the only options for C&I users in India to obtain renewable energy (RECs).
In fact, according to a WWF survey, legislative and regulatory difficulties are the top hurdle for businesses when it comes to procuring renewable energy. For C&I users with high demand, Open Access has been the favored form of renewable energy procurement. However, only about 17 gigawatts (GW) of the corporate power purchase agreements (PPAs) have already been signed so far, accounting for about 5% of total C&I demand.
Similarly, the rooftop solar industry has struggled to gain traction. The viability of the rooftop solar for C&I customers is determined by net metering policies, which include capacity constraints, ease of grid connectivity, and power selling pricing. These differ significantly across the country. Furthermore, certain distribution corporations in some areas have revoked favorable policies because they are concerned about losing high-paying customers to rooftop solar.
Net metering had previously been restricted to 10 kilowatts at the national scale, with all loads beyond that being moved to gross metering. This would have been a major setback, as the anticipated gross metering compensation rates were unsustainable, and C&I customers would be unable to self-consume the units generated by their system. Thankfully, this has been reduced to 500 kW.
Nevertheless, if India is to fulfill its national rooftop solar objective of 40 GW, considerable changes in rooftop solar laws are required. Setting up an incentive program for distribution firms and gaining their buy-in might go a long path toward accelerating rooftop solar deployment.