National Capital’s Tryst with Sun – Delhi Draft Solar Policy 2015

The Government of Delhi released its much awaited draft document of the State’s first ever solar energy policy termed as ‘Delhi Solar Energy Policy, 2015’ (refer) with lot of fanfare. As expected, the State Government has decided to promote rooftop solar keeping in mind the scarcity of large tracts of barren land and limited availability of other clean energy avenues including wind, biomass and hydro power.
The draft policy targets roof top solar as one of the key solutions for rising electricity bills and environmental problems as it urges the domestic, industrial as well as commercial consumers to join the rooftop revolution in the State. The policy targets to add 2000 MW of solar energy projects in the State by the end of FY 2025. Energy Efficiency and Renewable Energy Management Centre (EEREM) has been appointed as the State nodal agency (SNA) for policy implementation purpose (refer). Indraprastha Power Generation Company Limited (refer) has been appointed as the facilitator in collaboration with SNA. Further, an empowered committee headed by the Chief Secretary will be oversee and resolve the issues faced by various stakeholders. Some of the key features of the draft ‘Delhi Solar Energy Policy, 2015’ are:

  • Well defined targets and deadlines: Apart from providing a consolidated target of 2000 MW of solar additions by FY 2025, the draft also provides a year wise break up of capacity additions for the next 10 years starting from FY 2016 onwards; something lacking in most of the previous state level policies. Further, the document provides specific deadlines for various targets including
    • Mandatory solar installations on all government-owned rooftops within 5 years;
    • Full-fledged implementation of ‘group net metering’ and ‘virtual net metering’ for all consumers by 1st April 2017.

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Furthermore, the draft mandates the Discoms to meet 75% of their renewable purchase obligations (RPO) from energy generated within the State.

  • Various project models: The Government promises to support development of various kinds of solar projects including grid connected rooftops, 3rd party sales, projects under MNRE schemes as well as projects under REC mechanism. However, no major details have been given on ground mounted projects and the major focus remains on the solar rooftop projects due to obvious paucity of land banks.
  • Various net metering models: Another good part of the policy is that it provides consumers to explore with various net metering models including ‘group net metering’ and ‘virtual net metering’ models. Since, all the power generated under the net metering projects will be used by Discoms to meet their RPO; these innovative models can transform the rooftop market and RPO scenario in the State of Delhi.
    • Group net metering will allow consumers to generate at one rooftop and adjust excess solar energy at other electricity service connections of the consumer within the same DISCOM territory. This surely sounds promising, if billing related complexities arising of separate connections with different customer numbers can be taken care of.
    • Virtual net metering will promote community level solar projects wherein consumers will become owners of a collectively owned solar system and total energy generated will be credited to their respective bills in the ratio of their investments in the solar system. If properly executed, this can be attractive option keeping in mind changing housing pattern with the advent of apartments and high-rise systems.
  • Generation based incentives and Green Fund: A GBI of INR 2 per unit of gross energy generated (minimum of 1000 units) will be provided to domestic / residential consumers on first-come-first served basis for a limited period of 3 years from 1st Jan’16 to 31st Dec’18 to increase attractiveness by reducing payback time.

GBI capped @ 1500 units per year = INR 2 per unit x 1500 units = INR 3000 per year!! (That’s all folks)

This GBI will be disbursed by the SNA from the Green Fund in turn will utilize the Air Ambience Fund (refer) established by the State of Delhi. Capital subsidy scheme implemented by the MNRE has been marred with operational delays (refer). Hence, the State has rightly decided to replace upfront input subsidies by GBI as it promotes long term generation provided timely disbursement of GBI is followed in letter and spirit.

  • Number of promotional incentives: The draft coves all the usual exemptions, benefits and incentives including but not limited to exemption on electricity taxes & cess, VAT, entry tax, open access charges, conversion tax, wheeling charges and banking charges as well as award of ‘Must run’ status and CDM benefits. Further, the draft proposes amendments in the Building Bylaws for promoting rooftop installations. However, there is no clarity on the point of commercial tax, as the residential consumer will convert to commercial consumers if it installs a solar power plant for sale of power to the grid.

With detailed year wise targets & deadlines, innovative net metering models and various incentives, the draft version of the ‘Delhi Solar Energy Policy, 2015’ highlights all the good intentions of the Government of Delhi. However, as Brad D. Smith once said, ‘Good intentions often get muddled with very complex execution’, many good state level policies have been marred by delayed execution and lack of penal mechanisms in the past. Further, distribution utilities would play a key role in implementing the solar policy and since, promotion of rooftop projects would involve loss of Discoms consumers and I doubt Delhi Discoms would be so keen to do that under current scenario and they need to be incentivized. However, no such support mechanisms / plans have been discussed in the draft policy. Further, with the humongous fall in solar power prices in the recent bids, Discoms would be much more interested in buying solar power instead of promoting rooftop solar for meeting RPO targets. So, all in all, it would take a precise combination of deft management and strict implementation on part of the Government to present this policy as a success model for other states to follow.

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