Launching the solar rooftop scheme – that’s the first major decision Prime Minister Narendra Modi, took after returning from the consecration ceremony at Ayodhya. The announcement came via X (formerly Twitter), with the aim to install solar rooftops on 1 crore houses.
In this article, let’s delve into the current state of solar rooftop installation in India, understand what this development means for investors, and identify the companies slated to benefit from it! Let’s begin!
What’s Happening?
On January 22nd, the Prime Minister directed officials from the Ministry of Power and Renewable Energy to initiate a campaign encouraging widespread installation of solar rooftops among residential consumers. The ambitious scheme aims to have over 1 crore households in the country install solar rooftops.
The PM emphasised that the scheme would reduce electricity bills for the poor and the middle-income sections, making India self-sufficient in its energy needs. It also aims to increase the share of clean energy, reducing dependence on thermal energy. Additionally, consumers can monetise their excess electricity output.
This initiative gains significance as India’s energy demand is expected to rise sharply in the next 30 years, according to the International Energy Agency (IEA). The government aims to increase rooftop solar installed capacity to 40 GW by March 2026.
In the Interim Budget for FY25, announced on February 01, Finance Minister Nirmala Sitharaman announced that 1 crore households would receive 300 units of electricity per month free of cost.
What’s the Current State of Solar Rooftop Installation in India?
The scheme was launched due to the slow momentum in solar rooftop installations. As of May 2023, only 5.87 GW of rooftop solar projects were installed, less than 15% of the targeted 40 GW by the end of 2022. Lack of proper training and knowledge has contributed to slower adoption.
According to the Ministry of New & Renewable Energy, the current grid-connected solar rooftop capacity stands at 11.08 GW out of the total capacity of 72.31 GW.
Which Companies are Slated to Benefit?
Under its energy transition plans, the government expects solar power to contribute 292 GW out of the 500 GW of installed renewable capacity by 2030. Companies in the solar energy value chain, such as KPI Green Energy Limited, NTPC, NHPC, NLC India, Asahi India Glass, Borosil Renewables, Websol Energy, Adani Enterprises Limited, Swelect Energy, Insolation Energy, Solex Energy, and others, are poised to benefit.
What’s in it for Investors?
The solar energy ecosystem offers abundant opportunities for investors. However, it’s crucial to understand company fundamentals, including order books, operating margins, and liquidity positions. Investors should stay informed about domestic policies affecting the solar energy ecosystem.
Potential savings from the government’s free solar electricity and surplus sales to power distribution companies could range from Rs 15,000-18,000 for individuals. Additionally, the scheme encourages the use of solar power for charging electric vehicles.
For this scheme to bear fruits, people need to be convinced of potential long-term savings despite initial installation costs. Electricity distribution companies need to expedite grid-connected solar power to enable consumers to sell excess electricity to the grid and earn money. Significant on-ground changes are necessary for the scheme’s success!
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
