Solar Mandatory for Bldgs in Haryana. Will it Work?

The Haryana government recently announced that it will be mandatory for all buildings on plot size of 500 square yards or more to install rooftop solar power systems by September 2015.
The order will be applicable to private bungalows, group housing societies, builder apartments, malls, offices, commercial complexes, schools, hospitals — any building, new or old, that meets the plot size criteria.

The government had offered a 30% subsidy on installation costs on “a first-come-first-served” basis. This subsidy may now be reduced to 15%, as per the latest reports, based on the announcements from MNRE.

The minimum solar power capacity to be installed is 1 kilo Watt or 5% of a building’s connected load, whichever is higher. Failure to install the solar panels by September would attract penalties between Rs 10,000 and Rs 10 lakh, officials said.

Meanwhile, the State is also working out the modalities of connecting rooftop panels with the power grid, through the net-metering system.

So what does it mean for India’s Solar Industry?

From outside, this seems to be good news for India’s solar industry; creating a new market for the industry.

Some points to be noted:
1. Does the State think that such a short term push will help develop the solar infrastructure in the State? This short deadline may also encourage fly-by-night operators. Maybe the State could have prepared a list of authorized solar vendors/epc/installers; keeping a kind of confidence to the customers.

2. 15%-30% subsidy sounds good on paper. On the ground, it will just add another paper-work and admin burden on either the end user or the installer [Either the end user will apply for subsidy themselves or the installer will take on itself the task of applying for subsidy]. Also the “first-cum-first serve” basis may only add to unethical practices.

If the end-customer has to take the responsibility of the subsidy; then it will create a new market for agents/in-between players who will assist these solar owners to get subsidy from the government.

The State can also look at direct tax incentives for solar installations.

3. Net-metering clause will also bring in other challenges. Rate at which discoms buy additional power needs to be analysed. Also to solve technical challenges, the State could have initiated net-metering demo projects on government buildings.

4. The State is looking at a target of 50MW. But pushing such targets or clauses on the end -customer makes me little uncomfortable. Yes, the policy can make it mandatory for new buildings or government buildings, but then pushing private companies/families into this suddenly can create an uncomfortable environment.

5. What steps are to be taken if there is not enough space to put the solar plant in the building? What happens when the solar plant is not feasible for that particular building?

For now, an education drive will be useful to help people understand the process of buying/installing a solar power plant.

This also shows how important is energy security for States. We may see more such push from other State Governments. But I hope it is better planned and implemented.