India’s ambitious goal of attaining 100 GW of solar power by 2022 is well known globally and has garnered both interest and scepticism in liberal doses. However, a fact that doesn’t get quite as much attention is that 40 GW out of this is based on distributed energy generation i.e. solar rooftop systems. These solar rooftop systems can be set up at residential or commercial establishments or airport terminals, with capacities ranging from kilowatts to megawatts. Till October last year, the country had over 525 MW of solar rooftop systems.
A fact that has well been established is the crucial role that electricity regulators and discoms will play in the whole plan. Discoms have gained central prominence in the solar rooftop rollout plan, be it in terms of grid connectivity or net-metering arrangements. An interesting trend that has come up is that with the onset of rooftop-mounted solar systems, retail consumers are now playing the roles of both the electricity consumer and the generator.
Source: The Hindu Businessline
Worldwide, the electricity sector is undergoing fundamental changes that might impact the business models that utilities run on. This might pose a considerable threat to discoms, whose risk perception stems from the fact that if a big consumer base shifts to solar rooftop systems, it would result in significant revenue loss since discoms would have to invest into and maintain the electricity supply infrastructure even as the demand for grid electricity reduces.
In many Indian states, industrial and commercial consumers provide subsidised electricity to the agriculture and residential ones. Thus, a wide-scale adoption of solar rooftop systems could impact the financials of discoms.
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