The Government of India has set ambitious targets to drive the shift towards renewable energy. With regards to solar energy, the 100 GW target by 2022 consists of 60 GW of utility scale and 40 GW of rooftop solar. Hitherto, proactive measures by the government through its various arms such as National Thermal Power Corporation Limited (NTPC) and Solar Energy Corporation of India (SECI) has made it possible to get closer to the utility-scale target. On the other hand, the rooftop photovoltaics (RTPV) sector has seen slower progress despite heavy subsidies and incentives to consumers. Since the industrial and residential sectors cover more than half of total electricity consumption nationwide and have considerable roof area, these low hanging fruits can be targeted to meet the targets.
The RTPV sector is facing many challenges such as affordability among weaker economic segments, high customer acquisition costs due to the distributed nature of the business, lack of awareness and know-how of what benefits RTPV systems can bring to consumers and the unavailability of Renewable Energy Service Company(RESCO) model in some states. The need of the hour is to find ways in boosting rooftop solar sector installations. One possible way, which this article focuses on is through demand aggregation (DA). Demand aggregation is the process of bringing together several potential RTPV consumers, preferably geographically co-located and then presenting this as a single group of customers to an installer or an investor.
Several pilots by The Energy and Resources Institute (TERI) and World Resources Institute – India (WRI India) have proved that by aggregating demand, the problems of customer acquisition cost and lack of awareness could be solved,3. This can be done by targeting industrial unions and housing societies, all avenues where people of similar energy requirements and roof types can be brought together. These aforementioned pilots have shown initial promise. According to the WRI India, 40% of total customers who were involved in that project were motivated because of the financial benefits and the remaining 60% were inclined due to the technical guidance by these technical experts.
There is an urgent need for both, the central and state governments, to provide the necessary policy support for demand aggregators. This can work similar to the online retail aggregators, but with greater on-ground engagement. Certain business models should be allowed to make the concept effective. These strategies can be driven from both ends, wherein governments, end consumers or third party aggregators such as Gujarat Energy Research and Management Institute (GERMI), TERI and WRI India can initiate the process of aggregating demand. Incorporating demand aggregation models with the existing RTPV programs in the states also could be an added advantage to increase the visibility and credibility. Figure 1 shows some of the broad strategies to promote the DA concept.
Figure 1: Broad Strategies for Demand Aggregation
Community solar also can be considered as a demand aggregation tool, which is referred to as a solar installation that is collectively owned by more than one individual and the units generated by that system are offset in their respective accounts according to their stake in the system.
DA can potentially help installers increase scale and reduce customer acquisition costs. This eventually benefits the customers by installing RTPV systems with lower cost. To engage in such community driven projects, it is very likely that these motivated consumers will also bring others on board. This is the need of the hour for the RTPV sector in India to move closer to meet the target of 40 GW, if not for fulfilling it.
Author: Prathit Dave
Prathit Dave is a Junior Research Fellow in the advisory group at GERMI. He is currently working on various renewable energy projects. His core competencies include advisory support, strategic planning and implementation support in adopting renewable energy projects.