In a bid to promote sustainable energy practices, Prime Minister Narendra Modi unveiled the ambitious Pradhan Mantri Suryodaya Yojana, aiming to install solar panels in over 10 million households. However, the progress has been modest, with only 700,000-800,000 households currently powered by solar energy in the country.
The Ministry of New and Renewable Energy (MNRE) launched Rooftop Solar Programme Phase-II in 2019, targeting 40 GW of rooftop solar capacity. Despite these initiatives, the adoption faces challenges such as lack of awareness and financing difficulties.
Vikas Agarwal, Co-Founder and Chief Business Officer of Credit Fair, a consumer lending fintech start-up, expressed optimism about increased adoption with government support. Credit Fair offers personal loans for rooftop solar installation at an interest rate of 8-10%, contributing to installing panels in more than 2,000 households to date.
Photovoltaic Panels and Cost Breakdown:
Rooftop solar panels, also known as photovoltaic panels, can be installed on building roofs, reducing reliance on grid-connected electricity. The expenses involve initial capital investment and maintenance costs. The government aims for 40 GW annual solar power generation in the next 5 years, contributing to a 500 GW non-fossil fuel capacity target by 2030. However, with only 2.2 GW installed, about 70% of the targeted capacity remains unfulfilled.
Break-even Cost and Subsidies:
The cost of setting up a solar rooftop ranges from Rs 2.20 lakh to Rs 3.5 lakh for an average household requiring a 3KW – 5KW installation. Manageable EMIs of around Rs 4,000 – 5,000 per month, equivalent to electricity bills, can ease the financial burden on consumers. Credit Fair offers easy financing, allowing consumers to pay EMIs equal to their electricity bills.
Navitas Solar states that a 3kW solar system generally costs around Rs 1,22,979 without subsidy. With a 40% government subsidy, the cost reduces to approximately Rs 73,787. Factors like increasing grid electricity tariff rates, financial incentives, net metering, and ease of installation affect the payback period, which is generally 2-3 years.
Rooftop Solar System Capacity and Applicable Subsidies:
- Up to 3kW: Rs 18,000/kW
- Above 3kW and up to 10kW: Rs 9,000/kW*
- Above 10kW: Rs 1,17,000**
*Rs 18,000/kW for the first 3 kW and Rs 9,000/kW for the rest of the capacity up to 10kW. **The subsidy amount is fixed for rooftop solar systems above 10kW capacity.
Environmental Impact and Success Stories:
Digital lenders like Credit Fair facilitate the installation process by partnering with local installers, ensuring quick loan disbursal. Credit Fair has financed over 2300 rooftops, curtailed 13,000+ tons of carbon emissions, and saved around Rs. 12 crore in yearly electricity costs, highlighting the initiative’s environmental and economic benefits.
