How Solar Energy is Transforming Urban Sustainability

Solar power is expected to be the main driving force in shifting India’s reliance from fossil fuels to renewable sources of energy. The recent (October 2024) milestone of achieving 200 GW installed renewable capacity demonstrates India’s commitment in establishing a green and long-term sustainable energy source. As of November 2024, the total installed solar capacity in India was 92 GW, out of which 77% was ground mounted solar, followed by Rooftop Solar (RTS) at 16%.

Solar energy has been adding the most to new renewable capacity installations in the Indian power sector for the last 8 fiscal periods and is expected to continue to be the biggest contributor in achieving India’s target of 500 GW renewable capacity by 2030. Currently, solar power is the cheapest source of energy in the market today. However, one of the biggest obstacles in installing large quantities of solar capacity is the 3.5 acres/MW requirement for ground mounted solar generation. This makes generating solar energy on a large scale in or near urban areas next to impossible.

RTS offers a very pragmatic solution to this problem. RTS not only uses one of the most-idle spaces in the urban landscape but rather also reduces dependency on the grid (RTS is decentralised). The RTS industry in India consists of residential, commercial & industrial (C&I) and government segments. As of March 2024, RTS installed capacity was ~ 12GW with C&I accounting for almost 60%. However, the residential segment is expected to be the fastest growing segment in the future. 

According to a new report by the Council on Energy, Environment and Water (CEEW), more than 250 million Indian households can potentially install 637 GW of solar energy capacity on their rooftops. Successful deployment of only a third of this capacity could satisfy the electricity demand for each and every household in India.

In the recent past, there has been a very lukewarm adoption of RTS in the residential sector. This was primarily due to high initial investment, unavailability of easy financing, lack of basic knowledge about the maintenance of solar systems and inadequacy of the subsidy amounts for small to medium households (monthly consumption less than 300 units), which make up ~80% households in India.

However, all of this changed after a comprehensive overhaul of the GOI’s subsidy structure in February 2024 under the ‘Pradhan Mantri Surya Ghar Yojana’, with a total budgeted outlay of INR 750 Bn to be deployed till March 2027. The increase in GOI’s subsidy coupled with the drop in module prices and easier availability of financing for RTS installations have springboarded the adoption by the residential sector. As of October 2024, 400k units have been installed under this scheme. Residential RTS capacity has increased over 50% since the announcement of the scheme with ~1.8 GW new capacity installed between March and Oct 2024 (3.2 GW existing capacity). There was also a revision in the target for RTS capacity in India from 4GW in March 2022 to 30 GW by March 2027, which will lead to addition of 8-10 GW per year in RTS capacity. 

Owing to the immense potential even in the urban areas, solar power in India, if augmented with RTS and BESS (Battery Energy Storage Systems), has virtually no limits to the scale at which it can replace the non-renewable sources of energy.