Grid Connected Solar Rooftop Net-metering in AndhraPradesh and Telangana

GridTiedRooftopSolarPlant

Background

In January 2010, the Government of India launched the Jawaharlal Nehru National Solar Mission (JNNSM) as part of its National Action Plan on Climate Change (NAPCC) and set out a target to achieve 20 GW of grid-connected solar power by 2022

This target was revised to 100 GW by 2022 in late 2014. Of this, 40 GW has been targeted through grid-connected rooftop solar PV. The market potential of rooftop solar power in India has been estimated at 124 GW in a recent study by TERI1

To achieve the planned ramp-up of solar capacity from the existing 3 GW to 100 GW by 2022, many opportunities for investment have been created through a variety of schemes launched by the Government

In addition to the policy push by the Central Government, a number of State Governments have also come out with policies and regulations concerning grid-connected rooftop solar PV power. So far, 15 states have released relevant policies and 21 states have released regulations on grid-connected rooftop solar PV power

As part of this initiative Government of Andhra Pradesh has announced a policy on Net Metering for solar grid interactive rooftop and small Solar Power plants in the state vide G.O.Ms.No.22, dated 25.03.2013, which is now applicable for both AP and Telangana

Central Financial Assistance(MNRE Subsidy)

According to the latest notification by MNRE, subsidy of 30% on Benchmark Capital Cost is available for all consumers (except for Commercial & Industrial consumers), including the following consumer categories:

 Residential All types of buildings
Institutional Schools, health institutions including medical colleges & hospitals, educational institutions (both private and public), R&D institutions, etc.
Government Both Central & State Governments buildings covering all Government offices, Government PSUs, all buildings owned by Government directly or by any Government-owned societies, companies, corporations or organizations.

All Panchayati Raj buildings.

Government organizations owned systems anywhere including on private, commercial and industrial organizations will also be eligible.

Social Sector Community centers, welfare homes, old age homes, orphanages, common service centers, common workshops for artisans or craftsmen, facilities for use of community, any establishment for common use, etc.

It is to be noted that the subsidy will be admissible for the above categories even if the power connection is classified under industrial or commercial category.

Private, commercial and industrial buildings will not be covered under this subsidy unless the solar PV system is owned by a Government organization.The scheme is for projects size in between 1kWp to 500 kWp

Tax Incentives

Commercial, Private  and Industrial customers can leverage Accelerated depreciation benefit, Solar power generation projects have the option of profiting from Accelerated Depreciation benefit by the Central Government, as per Section 32 of the Income Tax Act, 1961. Companies can use this to substantially reduce tax burden in the first few years of the project, up to 100% of the project cost (80% accelerated depreciation and 20% additional depreciation)

Under Section 80-IA of the Income Tax Act, 1961 the Central Government provides a 10-year tax holiday, in which the beneficiary has the freedom to choose a 10-year continuous period in the first fifteen years of the project life to avail the tax benefit. The projects are taxed using the Minimum Alternate Tax (MAT) rate, which is significantly lower than the corporate tax rate

The Central Government has mandated concessions and exemptions on specific materials imported for manufacture of solar power generation products as well as for use in solar power generation projects

What is a Grid-Connected Rooftop Solar PV System? 

A grid-connected rooftop solar PV system refers to a solar PV system that is located on the roof of a building and is connected to the local distribution grid. It is a form of distributed power generation

The electricity generated can be stored, used directly, or fed back into grid. Solar PV is a reliable and clean source of electricity that can suit a wide range of power generation applications for residential, industrial, agricultural and commercial consumers

How do Grid Connected SPV Plants Work?

A grid-connected Solar Photo Voltaic (SPV) power plant consists of SPV array, Module Mounting Structure, Solar Grid Inverter (SGI), control and protection devices, circuit breakers, interconnection cables and switches

When the solar power generated by the grid connected solar plant is more than the load requirement, the excess power is automatically fed to the grid

For buildings with grid-connected solar PV systems, a bidirectional meter is installed which records import kWh and export kWh separately

What is Net Metering?

In grid-connected Solar Photo-Voltaic (SPV) systems, solar energy is fed into the building loads that are connected to the public electricity grid through a service connection with surplus energy being fed into the grid and shortfall being drawn from the grid

Production of surplus energy may happen when solar energy produced exceeds building load energy demand. This surplus is fed into the grid. During the night, or when during the day energy demand in the building exceeds solar energy production, energy is drawn from the grid

Net metering is the net energy between export of generated energy and import of grid energy for a billing month

Who Should Consider Solar Grid Tied Net-Metering System?

Residential and Commercial customers who are paying more than ₹1,500 in monthly electricity bills should consider installing a grid tied solar net metering system to save their electricity bills by 20% – 30%

Look at the ROI Calculator below for details

Assumptions:

Current Electricity Price: 10.50/KWH
Solar Plant Life: 25 Years
Warranty: 5 Years

Plant Size Plant Cost Subsidy/AD Plant Cost After Subsidy/AD Units Generated/Mth Savings Per Month Payback

in Months

1KW ₹89,998.00 ₹27,000.00 ₹63,000.00 150 ₹1,500.00 42
2KW ₹1,68,245.00 ₹50,473.50 ₹1,17,771.50 300 ₹3,000.00 40
3KW ₹2,35,550.00 ₹70,665.00 ₹1,64,885.00 450 ₹4,500.00 38
4KW ₹3,02,813.00 ₹90,843.90 ₹2,11,969.10 600 ₹6,000.00 36
5KW ₹3,70,014.00 ₹1,11,004.20 ₹2,59,009.80 750 ₹7,500.00 34
10KW ₹7,00,000.00 ₹2,10,000.00 ₹4,90,000.00 1500 ₹15,000.00 32

Customers can obtain loan for 70% of plant cost with a loan tenure of 5 years and 12% annual interest, remaining 30% is paid upfront and will be returned in the form of subsidy or income tax deduction

As monthly EMI is less than the amount saved in monthly electricity bills, it makes financial sense to install a grid tried rooftop solar plant with net-metering for commercial and industrial customers as they are paying close to ₹11 per kWH(unit) of electricity consumed

Click here to calculate the solar plant size based on your monthly power bill and potential monthly saving

We offer end to end solution for seting-up a rooftop grid tied solar plant, from initial feasibility to obtaining necessary NREDCAP and DISCOM approvals, obtaining financing, engineering, procurement, erecting the plant, operations and maintenance of the plant

Call us today at +91 9550004871 or email us at info@macsolartech.com for a free consultation to get the process started!

Please see links below for latest MNRE Guidelines for obtaining 30% subsidy and Net Metering Application documents

CFA_Notice_Grid_Connected_Rooftop_19112015-2

APSPDCL__APP_NETMETERING_APP

 

Procedure to get MNRE Subsidy for Off Grid Solar Systems in India

India’s Solar Potential

India has a large potential for generating solar power using un-utilized rooftop space and wastelands around buildings. Solar power generated by individual households, industrial buildings and commercial buildings can be used to fulfill the requirement of the building occupants there by consuming the power where it is generated, this reduces the large distribution losses that India currently faces today, It is estimated that we loose around 45% of generated electricity in distribution

The price of power generated from solar plants installed today is at par with grid supplied power for residential customers or lower in case of commercial customers, cost of solar power is declining while the cost of fossil fuel based electricity is increasing every day

The cost of generating solar power today is a little higher than the tariff charged by state owned distributed companies(DISCOMS) in most cases (other than commercial). With the capital subsidy, it is possible to generate power at ₹6.50 per unit (without battery backup) at ₹9.50 (with battery backup)

Solar power is cheaper than the diesel gen-set based electricity(₹21.00 per unit) even without capital subsidy, with capital subsidy it could be cheaper than the cost at which most DISCOMS are distributing power to their commercial customers.

Due to these reasons MNRE intends to popularize the use of solar energy under JNNSM Phase II

Eligibility

  • Individuals, Societies, NGOs, Private and Public sector companies, Industries every one is eligible for MNRE subsidy scheme

Subsidy Percentage

  • 30% Subsidy for off-grid solar systems up-to a maximum capacity of 500KWp

Applications
This scheme applies to following residential, commercial and industrial applications

  • Supplemental lighting
  • Industrial Heating
  • Home Lighting
  • Mini Grids

 Implementing Agencies

  • State Nodal Agencies(State Renewable Energy Development Agencies)
  • MNRE Approved Channel Partners
  • Solar Energy Corporation of India

Procedure 

  • Submit a project report with technical and financial details, operations and maintenance plan along with system monitoring and reporting details to MNRE via district head of your state nodal agency
  • MNRE evaluates your project on technical and financial points
  • After your project is approved by MNRE, Open tenders are invited by your state nodal agency and a channel partner will be selected from open bidding process
  • Channel Partner completes the installation process
  • SNA inspects your installation to ensure that only MNRE approved components are installed
  • Subsidy amount is released to channel partner directly from MNRE
  • You will be responsible for payment of 70% of the system cost, if you chose to finance your solar plant, you may work with you bank to procure financing 70% of the system cost

Practical Issues
Obtaining approvals form MNRE is a painfully slow process and it usually takes any where between 6 months to an year to get approval from MNRECreating a detailed project report(DPR) to submit to MNRE is usually a costly affair

Several so called solar constants are charging huge amounts to create those project reports

Solution
Most channel partners have dedicated pre-approved quota on an yearly basis, by working with a channel partner, you will be able bypass lengthy MNRE approval procedures and channel partner will be responsible for getting the project approved and procuring subsidy as well implementing the project as per MNRE guidelines

You should directly approach an MNRE approved channel partner with your proposal and they will be able to provide you with a free DRP with all the technical and financial information based on the solar plant capacity for your needs

You could submit that DPR to your bank to obtain financing, while channel partner works with your SNA(state nodal agency) to get your project approved by MNRE

Once project is approved by MNRE, your bank will fund the balance portion of the system cost (70%) and channel partner gets backend subsidy(30%) from MNRE

Solar Plant Capacity

Visit our Solar Plan Configurator to configure your solar plant size based on your actual usage

Important Links

We are an authorized distributor of MNRE approved channel partner and we have helped several customers to become grid independent

We take care of all the necessary paperwork and we will work with your SNA to get the necessary approvals from MNRE, We will provide all necessary paper work to your bank

Please contact us at +91 9550004871 or email us at info@macsolartech.com to get the process started

New NABARD guidelines to get Subsidy on Solar PV Systems and Solar Water Pumps for 2014

MNRE has revised its guidelines for procuring subsidy from NABARD for Solar PV systems and Solar Water Pumps in May 2014, below are few highlights from the revised guidelines

Eligibility

  • Only individuals, SHGs, NGOs and Farmer Groups are eligible under this scheme

Subsidy Percentage – Maximum available subsidy is ₹108/Wp

  • 40% Subsidy for systems up-to 300Wp
  •  30% subsidy for systems from 300Wp to 1KWp
  • 40% Subsidy for solar water pumping systems up-to 5KWp

Loan and Margin Money

  • 10% of system cost has to be paid as margin money
  • Remaining 50% cost of the system can be financed from the bank at an on-going interest rate for up-to a term of 5 years

Benchmark Costs

  • Benchmarks costs for 2014 is ₹270/Wp and Subsidy is ₹108/Wp

Procedure 

  • Submit an application to procure a loan for Solar home lighting system/Solar water pumping available from NABARD at your local bank
  • After your loan application is approved, you would have to deposit 10% of the margin money, depending on the size of your solar system/solar water pumping system
  • Your Bank Manager forwards your application to an approved Vendor/Channel Partner
  • Channel Partner completes the installation process
  • Bank Manager/Field Officer inspects your installation to ensure that only MNRE approved components are installed
  • Your application will be sent to NABARD to release the subsidy amount
  • After Subsidy amount is released from NABARD, Bank keeps the subsidy amount as a collateral towards your loan
  • If you default on the loan, you will not be eligible for subsidy amount, you will be responsible for repaying entire loan amount for your system

Practical Issues
As you are aware there are several practical issues involved in getting your loan application approved, your system installed and your subsidy application is submitted/approved and subsidy amount procured from NABARD, below are few practical issues and solutions to circumvent those issues

Local Bank
If you are living in an urban or semi-urban area, your local bank manager might not respond favorably to your request for solar loan, most urban and semi-urban banks are overloaded and they would not be interested in processing your loan application for following reasons

  • Your local bank is not aware of the procedure involved in processing your solar loan application under NABARD Scheme
  • Your local bank is not sure if they would be able to get your subsidy approved from NABARD
  • Your local bank is not interested in processing solar loans as there is a lot of paperwork involved and there is no incentive for the banks to process your loan
  • Your local bank does not have any directive from their regional or corporate office to offer solar loans
  • Your local bank does know/have any NABARD approved vendors to install these solar systems

Solution

  • Reach out to other interested parties in your area who are interested in these solar systems
  • Form a group of 10 to 15 interested parties approach your bank as a group
  • Reach out to one of the approved vendors/manufactures and let them know that you have a big group of interested individuals
  • Approved vendors will advice your local bank on the process involved and they will handle necessary paperwork

Authenticity of Vendors

There are several individuals and companies who claim to be authorised dealers and sub-dealers of NABARD approved manufacturers and you are not sure which of these individuals and companies are authentic

Solution

All NABARD approved manufactures provide a letter of approval to their authorized dealers for NABARD program, request a copy of approval letter from the individuals/companies

Warranty

NABARD program requires 25 years of warranty for Solar Panels and 5 years warranty balance of the system including solar inverter and batteries

  • Ask for warranty cards for all the components including solar panels, inverter and batteries
  • Ask these companies to provide references from their previous installations
  • Make sure that these companies have significant local presence and make sure that they are not fly-by-night companies

Solar Plant Capacity

You are not sure about solar plant capacity that you need to install to support your usage

Visit our Solar Plan Configurator to configure your solar plant size based on your actual usage

You want to become a dealer

You are interested in becoming a dealer for installing solar systems as there are no companies in your area offering these services

Solution
Most NABARD approved manufacturers have their dealer network through out the country, select a manufacturer whose dealer network is the strongest in your area, approach the local dealer and express your interest in becoming a sub-dealer, ask the dealer to provide you with necessary training on the solar products and technology

  • Build a team of electricians and get them trained on how to install and wire solar panels, inverter and battery banks
  • Rent a physical location and offer a service point and post installation support for up-to 5 years

 Important Links

MNRE approved manufacturers for NABARD subsidy scheme

Other issues

If you have any other questions/issues in getting these NABARD systems installed let us know, we will add additional sections to this article addressing those questions/issues

We have processed 1000s of applications under NABARD scheme and we work with several banks throughout out the country, if you are interested in getting a solar system installed, Please contact us at +91 9550004871 or email us at info@macsolartech.com

If your would like to become a sub-dealer, we will provide the necessary training on products/components,installations, wiring, technology, paper work and process involved and we will provide necessary documentation for you to get started, Please contact us at +91 9550004871 or email us at info@macsolartech.com