Solar firms see sunrise on residential rooftop

Even before the government has come out with policies and regulations to give rooftop solar a big push, major solar companies are looking to tap opportunity in the residential rooftop solar kit segment to grab a big chunk of the market.

Currently, the total installed capacity in rooftop solar segment – commercial, industrial, institutional and residential – is just 2 gigawatt (GW), way below government's goal of 40 GW by 2022.

Trina Solar, a Chinese company and the second largest solar photovoltaic (PV) producers in the world, has already begun peddling its branded residential solar rooftop kits in the configuration of 3 kilowatt-single phase inverter, 5 kW-three phase inverter and 10 kW- three-phase inverter.

The company, which has already shipped over 3 GW of solar modules into India, has held back around $1-billion of its investment for setting up a solar module, cells, ingots and wafer manufacturing plant due to uncertainties relating to government policies. However, it has sniffed huge potential in the residential rooftop solar, which has lower risks and swifter return on investment (RoI).

Gaurav Mathur, director sales, Trina Solar India, told DNA Money that he expects the residential rooftop solar to be 50% of the total market going forward and his company was trying to get the first mover advantage.

"Utility and rooftop market will be 50:50. That is the reason we are preparing ourselves for a residential rooftop solar market with our brand Trinahome," he said

Adarsh Das, co-founder and CEO of SunSource Energy, which has built 120-130 commercial and institutional rooftop installations across 20-22 states in India of 50-60 megawatts (MW), is also gearing up to usurp the huge potential in the residential rooftop solar systems.

He, however, said he was watching the grid parity before he makes a foray into this segment. "We are geared up for it (residential rooftop solar) but I believe the economic viability is still some time away," said Das.

Das feels that with Trina's scale and experience in Chinese market it would easily be able to offer competitive products and after-sale service.

"I wouldn't be surprised if these people were able to sell 30,000-50,000 kits a year. It would not be an unachievable number in today's market," he said.

Interestingly, Indian energy firm Su-kam, which is operating in this space, is grappling with financial troubles. Another major brand in rooftop solar installation is Luminous.

This segment is largely dominated by unorganised operators, which has resulted in poor installations and shoddy after-sale services.

Mathur said Trina is trying to address this gap in the residential rooftop segment by training and certifying its installers.

"We have certified 100 installers now. We have seen that the players who are unorganised are not doing a very good job on the installation. We already have 50 installers in the south and 50 installers in the north," he said.

The Chinese company is currently importing the entire kit from China, but in another 3-6 months would switch to assembling it in India due to 7.5% customs duty on some of the components and tariff and non-tariff barriers on them, which has made the kit expensive.

"Solar modules will be imported but we are in the process of approving and shortlisting vendors and suppliers in the domestic market for rest of the parts (inverters, cable, grid box, structure, etc)," he said.

Recently, Gopal Krishan Gupta, joint secretary, solar, Ministry of New and Renewable Energy, assured that the government would soon come with a single-window clearance system for rooftop solar projects, which have lagged due to government apathy.

The government official also talked of a 30% subsidy on purchase of solar power components so that such projects could become viable.

Das was pessimistic about these promises saying that the "level of forward thinking that was required on the part of the government" for pushing rooftop installations in the country was just not there.

"We don't expect it (forward thinking/vision) will exist until the elections are done," he lamented.

As per the global clean energy consulting firm, India doubled its new large-scale and rooftop solar capacity to 9,629 MW in 2017 from 4,313 MW installed in 2016. This took India's total installed capacity to 19.6 GW as of December 2017. About 90% of it was from large-scale solar installations at 8,634 MW while the remaining 10% came from rooftop solar at 995 MW.

Mercom has projected solar installations to fall by 22% in the current calendar year to 7.5 GW due to "a host of challenges".

"The lower forecast reflects a smaller pipeline of projects scheduled for commissioning in 2018. Auction activity was not very robust in 2017 and though there was a surge in activity at the end of the year, most of the projects that were tendered are not likely to be commissioned until 2019, a factor that is reflected in our five-year forecast," said a research report of the international clean energy advisory firm.

...& ANALYSIS

• 2 GW - Total installation capacity in rooftop solar segment
   
• 40 GW - Govt's goal of installing solar capacity by 2022
   
• 9,629 MW - India doubled its new large-scale and rooftop solar capacity in 2017 from 4,313 MW in 2016
   
• 19.6 GW - India's total installed capacity as of December 2017
   
• 22% - Expected fall in solar installations to fall in the current calendar year to 7.5 GW
   
• 30% - Talks of subsidy on purchase of solar power components to make such projects viable
   
• The government may soon come with a single-window clearance system for rooftop solar projects