As of August 2021, India had achieved only 14% (5.5GW) of its 2022 rooftop solar power (RTS) target capacity of 40GW. The pace of this uptake of RTS could be dramatically improved if India tapped into the buildings inventory of its more than 250 operational Special Economic Zones (SEZs).
India announced its SEZ policy in 2000 to enhance foreign investment, boost exports and create local jobs. The government of India mandated at least 51% of SEZs land to be the ‘processing area’ to house manufacturing units. Across India’s 250-plus operational SEZs today, RTS potential is estimated at more than 1GW. This is assuming 50% of the processing area is roads and sewage systems, factories are built in only 60% of the remaining land, and that only 35% of the built-up area’s roofing is suitable for RTS.
Similarly, all other types of industrial agglomerations in India may support up to 13.6GW RTS capacity. At Rs35m ($470,300) per megawatt of installed capacity, this represents a massive opportunity for foreign investments as renewable energy projects could be entirely owned and operated by non-Indian entities.
To exploit this potential, India’s Electricity Regulatory Commissions (ERCs) must remove the capacity restrictions on RTS installations like the state of Orissa did for all consumers and Maharashtra did for textile factories; and approve third-party roof leasing models. The government recently proposed to waive capacity restrictions for behind-the-meter renewable energy projects.
Within industrial parks, there is scope to aggregate the RTS potential of small businesses and exploit economies of scale. The excess power could be sold to larger companies. Presently, an RTS power developer must become a distribution utility within SEZs to attempt such aggregations. The developer must source 24/7 power, lay its own grid and serve all consumers at tariffs fixed by the relevant ERCs. Avoided transmission and distribution losses and declining RTS costs mean ERCs could remove these barriers for all industrial park developers, incentivise utilities by charging a facilitation fees on every unit of excess power traded, and keep the landed cost affordable for consumers.
Ashok Thanikonda is a researcher at the World Resources Institute, India. He could be contacted at firstname.lastname@example.org