Of Potholed Roads and Inefficient Rooftop Solar Plants

Of Potholed Roads and Inefficient Rooftop Solar Plants

9th February 2018 Blogs 0

Indian roads are some of the worst you can find in the world. Most of the automotive companies have a special “Indian package” for suspension which includes a raised and beefed up suspension. The reasons for such a state may be many, but one of them is the way road contracts are implemented in India. The contracts are tendered out centrally by Govt departments and Authorities and handed over to the company/ contractor who does it cheapest. In such a scenario, quality is the first casualty.

Till now, in case of rooftop solar plants, the government gave the customer the freedom to select a solution provider as per his/ her budget. The customer obviously went in for the best quality components withing his/ her budget. This also permitted a large number of small companies providing solar rooftop solutions offering the right quality at the right price. The market was thriving for all types of companies, large and small and the customer was spoilt for choice. Subsidy was provided to residential and institutional customers like schools, hospitals, non-government organisations etc.

The Govt of India has now come up with a draft policy for implementation of rooftop solar systems, which will lead to the same scenario as the roads. If this policy is approved an implemented, all roof top solar power plants would be installed through the Power Distribution Companies (DisComs); energy utility companies for people not from India. Most of the DisComs are majority owned by state governments and have a culture similar to a government department. Now, as per the new policy the process for installing a rooftop solar power plant in India would be as follows: –

  • A consumer will apply to the DisCom for installation of a rooftop solar system.
  • The DisCom will assess the site and decide the plant capacity that can be installed.
  • Once approved, the DisCom will direct one of its empaneled installers to install the power plant at a price determined by the DisCom.
  • The subsidy amount, which will now limited to only residential users will be disbursed by the government to the installer through the DisCom.
  • The DisCom will select/ empanel installers through a competitive tendering process where in the company bidding the least price/ Wp will be empaneled.
  • In case of privately owned DisComs, they would either empanel their sister concerns working in the solar sector or get into strategic alliances with other large solar power companies.
  • The DisComs would set an annual target and would be compensated through an incentive for the targets met.

So what would be the outcome of this policy?

  • Anyone, who wants to remain in rooftop solar business will have to be empanelled with the DisCom.
  • Even an industrial or commercial user or government department who is not eligible for subsidy cannot engage an independent installer as all installations are routed through the DisComs.
  • As the process is through competitive bidding, and bidders with least quoted price/ Wp would be selected, all the tenders would be cornered by the bigger players with deep pockets.
  • New and smaller companies would be reduced to sub-contractors to the larger companies and independent installers will perish.
  • As the selection is through least bid, companies will start cutting costs and using cheap and poor/ low quality products which may just pass the MNRE scrutiny.

In the end, the consumer will be the loser as he/ she will land up with inefficient and inoperative defective rooftop solar plants in addition to the potholed roads.

The views expressed are personal views of the writer.